Whether you are looking to hire a skilled workforce for your business operations or want to expand in the Latin America region, hiring your own team of professionals in Brazil can be incredibly rewarding & beneficial when done right.
Whether you are looking to hire a skilled workforce for your business operations or want to expand in the Latin America region, hiring your own team of professionals in Brazil can be incredibly rewarding & beneficial when done right.
Over the years, the Brazilian workforce has grown enormously, acquiring skills currently in demand. As an international company, the Brazilian soil is blooming with talent ready to help businesses grow. However, there are certain things that global companies need to know before hiring employees in Brazil, ranging from legal requirements to understanding the country’s work culture.
Why expand in Brazil?
Aside from its convenient location, growing economy, and availability of skilled labor, Brazil has an expanding population that is more than willing to try the new range of products and services. Additionally, the favorable climatic conditions and quality of resources further add to the growth potential of the global company establishing itself in the country.
3 Key solutions to hire in Brazil
1. Partner with an EOR
A simple and effective way to hire employees in Brazil is to partner with an employer of record (EOR). An EOR is a third-party entity with the right international legal expertise to hire employees without requiring a local entity set-up. They can take care of hiring, onboarding, and compliance to ensure that your business can start operations without any hassles.
2. Create a company
Setting up a legal entity in Brazil will allow you to hire and manage business directly operations in the country on your own terms. It will allow you to cut down on employee costs if your business is planning to operate in the country for more extended periods of time.
3. Engage a contractor
Engaging international contractors allows global companies to enjoy the flexibility of hiring highly specialized talent for short-term projects. Hiring employees on contracts is incredibly beneficial, as you do not have to deal with payroll taxes and other compliance requirements.
Employment practices
Brazil has a minimum wage limit that must be paid along with mandatory employment benefits like the 13th-month pay. Workers must also work only eight hours a day or 44 hours a week. The mandatory benefits also include a vacation bonus amounting to one-third of an employee’s monthly pay, along with a transportation voucher that covers expenses for work commutes if it exceeds 6% of an employee’s monthly wages. Daycare assistance is also mandatory for any organization that has more than 30 female employees.
Aside from this, the probation period cannot be beyond 90 days. If hiring remote employees in Brazil, your business must provide the necessary equipment and cover utility charges. A pension fund (FGTS), work accident insurance (RAT), social assistance, and social security benefits must also be provided by the employer. Brazil also has laws on non-mandatory benefits like meal vouchers, private health insurance, private pensions, life insurance, and more.
Compliance risks
Despite the advantages, the Brazilian market can be tricky for new establishments due to high market entry costs, intricate tax systems, and seemingly never-ending entity establishment processes. Corruption is a massive issue in Brazil that government regulations aim at tackling. Companies must abide by the laws of the Brazilian Anti-Corruption Law. It is also necessary for businesses to stay updated about changing regulations. Errors like misclassification and incorrect payroll contributions can have costly repercussions for an organization. Failure to comply with immigration laws can also lead to fines and penalties.
Opening gateways to success in Brazil
Brazil is highly receptive to foreign direct investments (FDI). As a result, they have pre-determined policies, practices, and regulations that make it easier for foreign companies to set up. That said, it is still crucial that your business takes adequate steps to establish its presence for a hassle-free business experience.