Economy

Report: Brazil Is Most Expensive Developing Nation For Doing Business

Report: Brazil Is Most Expensive Developing Nation For Doing Business
Mariana Barbosa

SÃO PAULO - Brazil is the most expensive developing nation for doing business and has costs similar to developed countries, according to a study by consulting firm KPMG.

"Competitive Alternatives" is a regular KPMG report that compares the structure of costs for companies in different countries and localities, taking into account taxes, labor, rent, cost of capital and other factors.

For the first time, the 2012 edition covers the BRICS (Brazil, Russia, India, China, South Africa) along with nine industrialized countries. The study compares 19 sectors, from automotive manufacturing to food processing and video games production. In all of them, Brazil is the most expensive among the developing nations.

Taking costs in the US as a basis, the research shows that, in general, doing business in Brazil is only 7% cheaper.

China, the least expensive country for doing business in the group, costs 25.8% less than the US, followed by India (25.3%) and Mexico (24.53%). More expensive than the US are Germany (0.1%), Australia (3.7%) and Japan (9.5%).

Considering only the automotive sector, Brazil is 5.4% less costly than the US, while Mexico is 13% cheaper.

In terms of taxes and duties, Brazil is 43% more expensive than the US, occupying the 11th place.

For KPMG, the fact that Brazil is “recognized as a developing nation” and has higher taxes than more mature economies is a riddle. The Brazilian scenario is even worse when factoring in tax incentives on research and development (R&D), essential to assure industry’s future competitiveness. On this list, Brazil is at the bottom.

Considering all the costs included in R&D, including qualified employees’ wages, Brazil is the 7th most expensive country in which to do business.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
Future

How Facebook's Metaverse Could Undermine Europe's Tech Industry

Mark Zuckerberg boasted that his U.S. tech giant will begin a hiring spree in Europe to build his massive "Metaverse." Touted as an opportunity for Europe, the plans could poach precious tech talent from European tech companies.

Carl-Johan Karlsson

PARIS — Facebook's decision to recruit 10,000 people across the European Union might be branded as a vote of confidence in the strength of Europe's tech industry. But some European companies, which are already struggling to fill highly-skilled roles such as software developers and data scientists, are worried that the tech giant might make it even harder to find the workers that power their businesses.


Facebook's new European staff will work as part of its so-called "metaverse," the company's ambitious plan to venture beyond its current core business of connected social apps.

Shortage of French developers

Since Facebook CEO Mark Zuckerberg announced his more maximalist vision of Facebook in July, the concept of the metaverse has quickly become a buzzword in technology and business circles. Essentially a sci-fi inspired augmented reality world, the metaverse will allow people to interact through hardware like augmented reality (AR) glasses that Zuckerberg believes will eventually be as ubiquitous as smartphones.

The ambition to build what promoters claim will be the successor to the mobile internet comes with a significant investment, including multiplying the 10% of the company's 60,000-strong workforce currently based in Europe. The move has been welcomed by some as a potential booster for the continent's tech market.

Eight out of 10 French software companies say they can't find enough workers.

"In a number of regions in Europe there are clusters of pioneering technology companies. A stronger representation of Facebook can support this trend," German business daily Handelsblatt notes.

And yet the enthusiasm isn't shared by everyone. In France, company leaders worry that Facebook's five-year recruiting plan will dilute an already limited talent pool, with eight out of 10 French software companies already having difficulties finding staff, daily Les Echos reports.

The profile of Facebook founder Mark Zuckerberg displayed on a smartphone

Cris Faga / ZUMA

Teleworking changes the math

There is currently a shortage of nearly 10,000 computer engineers in France, with developers being the most sought-after, according to a recent study by Numéum, the main employers' consortium of the country's digital sector.

Facebook has said its recruiters will target nations including Germany, France, Italy, Spain, Poland, the Netherlands and Ireland, without mentioning specific numbers in any country. But the French software sector, which has so far managed to retain 59% of its workforce, fears that its highly skilled and relatively affordable young talent will be fertile recruiting grounds — especially since the pandemic has ushered in a new era of teleworking.

Facebook's plan to build its metaverse comes at a time when the nearly $1-trillion company faces its biggest scandal in years over damning internal documents leaked by a whistleblower, as well as mounting antitrust scrutiny from lawmakers and regulators. Still, as the sincerity of Zuckerberg's quest is underscored by news that the pivot might also come with a new company name, European software companies might want to start thinking about how to keep their talent in this universe.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
THE LATEST
FOCUS
TRENDING TOPICS
MOST READ