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Murray News

Business with China overcomes legal differences

Equal treatment for foreign companies in Brazil attracts interest from Asian businesspeople

01/15/2024


Thiago Vallandro Flores — Foto: Divulgação

Thiago Vallandro Flores — Foto: Divulgação

Over the past 15 years, Brazilian law firms, particularly those specializing in corporate and tax matters, have witnessed a growing interest from Chinese companies seeking to engage in business within the country. Legal experts in Brazil have cultivated specialized knowledge in this domain. Thiago Vallandro Flores, a partner in the finance department at Dias Carneiro Advogados, with nearly two decades of experience working on contracts involving Chinese companies, notes that the Chinese anticipate a higher level of expertise when engaging with Brazilian lawyers.

Mr. Flores highlights cultural differences, emphasizing that the Chinese place value on closer interactions with senior professionals, and he notes variations in decision-making processes that can sometimes lead to differing expectations about deadlines.

Nick Beckett, a partner at CMS in China, observes the evolution of China’s legal system since the founding of the People’s Republic of China in 1949, stating that it has become more sophisticated and “comparable to Western systems.” Aldo de Andrade, senior lawyer at BYD do Brasil, acknowledges “undeniable differences in legal systems,” emphasizing the challenge of establishing clear communication between the legal and doctrinal systems of two economic powers.

Due to these distinct legal cultures, Mr. Andrade emphasizes the necessity of developing strategies with partner firms to elucidate Brazilian legislation guidelines, particularly concerning labor laws and the recent tax reform. Paulo M. Focaccia, a partner at FAS Advogados collaborating with CMS, underscores opportunities for bilateral business in sectors like power generation, commodities, mobility, and technology, noting the transcendence of legal differences. “We observe with some caution the day-to-day activities of newly established Chinese companies—or those planning to establish their subsidiaries here—with frequent doubts about the complex Brazilian tax system,” said Mr. Focaccia.

Lucas Tavares, a partner in the mergers and acquisitions practice at Demarest Advogados, with over two decades of experience with Chinese clients, highlights labor and tax concerns in Brazil as focal points for foreign investors. He appreciates Brazil’s lack of geographical distinction for investors from a legal perspective, a feature welcomed by the Chinese. Mr. Tavares emphasizes the predictability of Brazil’s regulatory environment as a positive factor but warns against imprudent document signings, urging Chinese companies to seek proper advice.

For Brazilian companies venturing into China, Leonardo Briganti, partner at Briganti Advogados, underscores the importance of China’s Foreign Investment Law, in effect since January 1, 2020. Mr. Briganti provides a didactic description of activities permitted, restrictive, and prohibited for foreign companies in China under this law. He highlights the issuance of Negative Lists by the National Development and Reform Commission and the Ministry of Commerce of China (MOFCOM), clarifying restrictions and rules for operating in Chinese territory.

*Por Suzana Liskauskas — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/
15 de January de 2024/by Gelcy Bueno
Tags: Business with China, overcomes legal differences
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