Merger in Brazil

Business law can be a complex topic for executives who are investing in property and other transactions in foreign countries. For instance, mergers and acquisitions are often accomplished across country borders.

While Brazil contract law is a challenging topic on its own, developing mergers with Brazilian businesses can be even more confounding. The Civil Code plays a role in dictating contracts and business doings for smaller, limited companies, according to the publication Corporate Compliance Insights. The Corporation Law, on the other hand, is used in terms of the reorganization of a business’s structure, shareholders’ agreements and tender offers.

Both private and public companies must follow the Corporation Law when developing merger or acquisition agreements. A Brazilian attorney can help businesses maintain regulatory compliance and point companies in the right direction regarding their merger activity in this country.

The Brazilian Securities and Exchange Commission as well as the Central Bank of Brazil are both in charge of ensuring businesses remain compliant during their financial dealings during a take-over.

Bloomberg Businessweek reported that Jorge Paulo Lemann is currently the richest man in Brazil, partially because of acquisitions and savvy business dealings. Lemann was able to gain this status after surpassing commodities tycoon Eike Batista, who had been the richest Brazilian until recently. In 2008, Lemann and his partners, Marcel Herrmann Telles and Carlos Alberto Sicupira, completed a $52 billion merger with Anheuser Busch InBev NV.

“The performance of the companies that Lemann controls has been very strong,” Chris Palmer, London-based director of global emerging markets at Henderson Global Investors Ltd, told the news source. “He’s built on the success of his companies in Brazil and partnered with global companies.”

Other business owners looking to ensure their company thrives should consult experienced lawyers from a Brazilian law firm, which helps negotiate and develop beneficial contracts concerning an international merger or acquisition.

Lawsuit against Amazon

Businesses that are working with international companies or selling their products across borders may end up in a dispute for a multitude of different reasons, including contract issues, employee miscommunications or merger development problems.

However, not all parties may want to go to court due to minor disputes. As such, a Brazilian attorney can help businesses negotiating in this country mediate their concerns through dispute resolution tactics.

Companies that avoid going to court will not spend as much time and resources focused on monetary settlements. However, not all entities are able to work out their issues through mediation proceedings.

Two such parties include the governments of Brazil and Peru, which have filed a complaint against Amazon.com preventing the company from obtaining new internet domains, according to the Global Post.

The filed claims state that, if the e-commerce firm uses the URL it intends to, then it “would prevent the use of this domain for purposes of public interest related to the protection, promotion and awareness raising on issues related to the Amazon biome.”

Nonetheless, attorneys specializing in mediation can help business owners reach an agreement and put an end to their dispute. The third party lawyer acts as a mediator and includes a timetable to structure the proceedings.

The Brazilian laws that are focused on mediation procedures include the Civil Code Introductory Law and the Code of Civil Procedure. These laws set up attorneys for dealing with international cases needing dispute resolution.

The use of arbitration in the Brazil legal system is currently on the rise, as businesses have a more confidential type of proceeding and the press cannot get a hold of the information like in a court case. Other benefits include the lack of enforcement in the final ruling, which allows both parties to remain in communication about their ultimate decisions regarding their dispute.

Brazilian Civil Code

Businesses often have to develop transactions on an international basis and creating and signing contracts are all a part of this process. In Brazil, contract law has variations from the United States. It is based on the Brazilian Civil Code and may even take the Consumers’ Code into account, which protects the a product’s end user.

Operating under a civil code instead of a common law code means that there are specific requirements and regulations written out for practically every type of contract available, including lease agreements, business relations, insurance contracts, and patents or copyright law.

Overall, most parties can enter into a contract as long as it isn’t illegal, immoral or the agreement sets forth impossible standards that either party cannot meet. Once a contract has been signed, it becomes binding for both parties to fully achieve the agreement set forth.

A major part of the Brazil contract law includes the prohibition of favoring one party in an agreement over another. In plainer terms, one person cannot gain all of the advantages while the other must overcome challenges.

When breaking contracts, the business owner or executive will technically be committing an illegal act. Another major illegal action was taken by former Brazilian officials who allegedly gave contracted work to businesses in exchange for bribes, according to The Rio Times. Some experts have been analyzing whether former President Luiz Inácio Lula da Silva will be implicated in the scandal.

“[Lula’s] image is very solid as the president who improved the lives of Brazilians,” Alberto Almeida of Instituto Análise, a political consulting firm, told the news source. “Furthermore, he appointed a successor who is doing a good job. So he is very highly rated and respected by most of the population.”

In order for U.S.-based businesses to understand the contract laws in Brazil, they should contact a Brazilian law firm with experienced attorneys who have vast knowledge on the country’s legal system.

Brazillian Intellectual Property Law

Intellectual property law can be a confusing topic for businesses that are working internationally, such as between the United States and Brazil. Business law can often cross borders, as more mergers and acquisitions are accomplished between separate countries. Companies also spend time dealing with each other and developing transactions in order to ensure their businesses are prosperous.

Patent and copyright infringement, in particular, can pose difficult questions for foreign companies working in Brazil. The Economist reported on the intellectual property laws within Brazil and how to ensure that infringements are avoided.

In the early 1800s, the country had laws that allowed authors and inventors to have exclusive property rights to their creations for a total of 14 years. By the 1950s, however, the intellectual property law began to ban manufactured imports and the patent office was able to cap royalty payments.

“Instead of believing that it is essential to protect ourselves from foreign industry, we now realise that we must protect our own intellectual property to encourage innovation,” Jorge Ávila, the president of INPI, Brazil’s patent office, told the news source. “And we want foreigners to invest here. We don’t want them to think they won’t get a fair return.”

However, intellectual property is not as troublesome as some foreign businesses may think, as Brazil’s stance on copyright, trademark and patent laws are in line with many other major trading nations.

Before investing in new products or coordinating transactions between businesses, foreign companies will need to have a greater background in Brazilian law. Brazilian lawyers – with knowledge in intellectual property law, patents, contracts and mergers or acquisitions – can help companies find solutions for the complications of business law.

Benefits of a Partnership

The two economic titans of the Americas – the United States and Brazil – share several common interests, along with many of the same structural and economic challenges. Their governments acknowledge that there is a need for mutual cooperation on a variety of global issues, and their leaders seem willing to engage with one another to make such a partnership work.

“The rapid increase in the breadth and depth of the bilateral dialogue and the Brazilian and American governments’ efforts to maintain the doors open for a more productive and consequential relationship suggest, at a minimum, that they understand they need each other, benefit from working together and risk paying a political price for not doing so,” Huffington Post contributor Paulo Sotero notes in a recent analysis of the two countries.

The reelection of President Barack Obama earlier this month ensured that the respective leaders of the United States and Brazil would remain partners for at least the next two years, until Brazilian President Dilma Rousseff runs for her own reelection in 2014.

Sotero makes the point that while American companies have operated in Brazil for years, the South American nation’s ascension into the top tier of the global economy has empowered Brazilian companies to expand their operations into the United States. As the two countries become more intertwined and overarching governmental policies encourage economic cooperation, businesses will find that their best interests may include expanding operations abroad.

But, before doing so, business leaders need to understand the nuances of Brazilian law. A Brazilian lawyer with experience in all phases of corporate law – mergers and acquisitions, contracts, intellectual property and licensing, compliance and bankruptcy – is best suited to respond to any legal difficulties.