Brazil
Brazil occupies a larger part of South America. Apart from Ecuador, the country shares its border with all the South American nations. Brazil is majorly divided into a total of 26 states. Besides, the country upholds strong democratic principles in that voting is compulsory for everyone aged between 18 to 69 years. The country had a corrupt past where dealers in the black market used businesses to hide money. A strong anti-corruption movement called the operation car wash began as an investigation to the black market dealers like Petronas and the former Brazilian president Lula. The operation car wash has drastically evolved the political and financial systems of the country creating a conducive corruption-free business environment.
Being the world’s eighth largest economy, it is certainly the regional’s economic superpower. Its continuous rising population along with a more significant percentage of its citizens being economically active is a sure market. Also, its financial situation has continually improved over the years. The controlled inflation coupled with the reduced risk of currency devaluation are the key contributors to steady economic growth. Furthermore, the low costs of labor compared to other countries ensure an absolute advantage in production.
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The socioeconomic status of Brazil is incomparable. Only 20 percent of the citizens live in abject poverty. This, therefore, means that the quality of life and the purchasing power of most Brazilians are quite high. The majority of the populations are soccer players and supporters. Besides, the county is a hub of a variety of cultures. This diversity is an assurance of diverse preferences and tastes.
The technological environment in Brazil is vibrant with a variety of business accelerator programs like the E-commerce payment system which is an excellent platform for an active business transaction. The MGTI program was explicitly formed to unite four technology institutions. This program not only aids in business development in the country but also invests in businesses to give them a global competitive advantage.
The country has stringent labor laws and many benefits for the employees. The Consolation of Labor Laws (CLT) stores the essential employment data like the salary paid, the employer, the type of job and other unique details on the position. Its basic rules include 44 working hours per week, 30 days of paid vacation after 12 months of work and an extra one-month salary every year which is commonly known as the 13 the salary. The scheme also requires that 8 percent of the monthly employee salary is paid to the government. The Aviso Previo rule requires a 30-day prior notification before firing. Besides, the scheme requires that meals and transport are to be paid to workers. However, the disadvantage is that the labor laws are continually changing. Furthermore, Brazilians can easily sue their employers and win due to the complexity of the labor laws. Moreover, most rules of these rules are not well implemented.
The United Arab Emirates
The political stability of UAE is somehow attractive for business. The stability is due to the citizen-centered policies in the country and the level of interaction between the government and the citizens. The government has laid down strict measures to get rid of the Al Islam, a conservative Islam group whose main aim is to convert UAE into an Islamic country. The government’s decision is primarily to encourage investments. The government has managed to control strikes and riots in the Arab spring. This has resulted in a larger number of companies moving into the country. Besides, the state has a very healthy trade relationship with some neighboring countries and across the globe. For instance, it is part of the political and economic bloc called the Gulf Cooperation Council (GCC) which has become the best platform for business policies in the Gulf. However, the country is frequently involved in political conflicts with neighbors on ownership of land and oil wells.
The cost of setting up a business and the cost of operation in UAE is considerably low compared to other countries in the UAE. The market base is huge due to the high level of employment. Therefore, most people can purchase. Besides the upcoming International events like the Dubai expo in 2020 and the FIFA world cup in 2022 will attract a lot of tourists in the country and thus increase the customer base. Furthermore, the country has the highest level of FDI in the region.
A more significant number of UAE citizens are strict Muslims. The country's Islamic cultural is a crucial factor for consideration in every entrepreneurial activity. Besides, the lifestyle of most citizens is above average due to their well-paying jobs. Globalization is slowly transforming the country; there is a high influx of people from different cultures into the UAE. The regulations governing employment are friendly, and the general cost of labor is low. However, switching jobs is easy in the country due to the labor law established in 2016. Therefore, the level of labor turnover is high. Besides the government has tried to effect laws that are gradually terminating fuel and electricity subsidies but are subsidizing on UAE-based airlines thus making multinational networking very effective. Foreign firms are free to set up branches in the UAE free trade zone where they are exempted from personal taxation, import and export duties. They also enjoy the benefit of repatriation of capital and profits, housing, sponsorship and employee appointment.
The UAE is still on the verge of becoming one of the leading technology hubs in the world. The country launched a 3-D Printing technology which will transform the entire business environment by 2025 through saving time caution down on construction cost and reducing the demand for unskilled workforce. The coastal climatic condition is conducive and friendly for the business.
COMPARATIVE SUMMARY
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Brazil |
UAE |
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Political environment |
Politically stable Unpredictable political situation due to a history of political instability especially during elections Corruption is still an issue. Ranked 72nd out of 108 countries in corruption |
Flexible management with an autonomous leadership in each state Frequent political crisis Healthy trade partnerships with other countries |
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Economic environment |
A large population A high level of FDI Low labor costs No incentives for foreign corporations Overvalued currency Equal treatment of domestic and foreign companies |
Very low level of unemployment High FDI Low labor costs A lot of benefits for corporations operating within the free ride zones |
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Social factors |
A higher poverty level Unequal distribution of classes of people Most people are football lovers |
Low poverty level Low unemployment rate therefore high living standards. No cultural diversity A strict Muslim country |
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Technological factors |
Average technological infrastructure IT sector still improving |
Still evolving technologically High potential for growth |
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Environmental factors |
Stable climate throughout the year |
Hot and dry climate Coastal environment |
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legal factors |
Very strict labor laws |
Less stick labor laws |
Basing on the above analysis, both environments have their weakness and strength. Costa deals in a variety of merchandise. Its establishment in Brazil will yield a lot of reward due to the large population, the level of diversity and the distribution of the income level of the citizens. Besides, the cost of operation in Brazil is very low because they will take advantage of the low labor costs. Furthermore, the overvalued currency will ensure most imported raw materials for production from the home country will be relatively cheaper. Consequently, the company will achieve its primary goal of keeping operational costs low and passing the saving to the workers. Therefore, the most recommended business environment for expansion is in Brazil.
References
Amal, M. (2016). Foreign direct investment in Brazil: post-crisis economic development in emerging markets. Amsterdam: Academic press.
Dept, I. M. (2016). The United Arab Emirates. Washington DC: International Monetary Fund.
Young, E. &. (2015). Doing business in Brazil. Ernest & Young international business series .
