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Brazil Increases Its Appeal to Foreign Investors

The EM20 Index, developed by PricewaterhouseCoopers, of the United Kingdom shows that Brazil has improved its position in attractiveness to foreign investment among emerging countries. The ranking takes into consideration the risk of each market and measures the relative value generated for each dollar invested.

Brazil was more attractive both for foreigners interested in investing in the service sector and for those planning to put money into industry. In 2004, Brazil was in the 20th position among the most attractive for the manufacture of products. This year the country rose to the 12th position.

According to consultancy company PricewaterhouseCoopers, the low cost is a fundamental factor for industrial investors. The country's strategic location is also taken into account, as it is close to export markets and the local tax policy. The analysis considers that half of the produce is turned to export.

The service sector in the country rose from the 15th position in attractiveness to foreigners in 2004 to the eighth position this year. In this case, investors are taking into consideration the Gross Domestic Product, as 90% of services are turned to the domestic market.

On analyzing the market risk, the PricewaterhouseCoopers analysis takes into consideration the risk premium on Brazilian bonds, and on evaluating the return, economic fundaments like the per capita Gross Domestic Product and growth rate projections.

What is more important, according to PricewaterhouseCoopers, is not the market size, but the possibility of obtaining results that compensate risk.

PricewaterhouseCoopers provides auditing, tax and share advisory as well as focusing on specific economic sectors.

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