With a population of almost 212 million, Brazil now makes up the third-largest EB-5 market behind China and Vietnam, with the bonus of not yet having hit retrogression. Brazil’s interest in EB-5 visas can be attributed to the country’s recent economic downslide, its high crime and corruption rates, and its poor quality of education.
Wealth and Economy
Despite having the seventh-largest economy in the world only a decade ago, a recession in 2015-2016 shrank Brazil’s GDP by 8%, and the country is now facing high inflation and unemployment. Already 2,000 millionaires fled the country in 2017, continuing a trend seen over the last several years. Nevertheless, the number of Brazilian millionaires is expected to rise from the current 164,000 to 296,000 in 2022.
Political Landscape
Brazil has been rocked in recent years by major corruption scandals that even led to the impeachment of a former president. Bribery and fraud are commonplace in Brazil’s politics, tax management, and judicial system. The current president, Jair Bolsonaro, has authoritarian leanings and is an apologist for Brazil’s previous military regime. These factors provide a major incentive for wealthy Brazilians to leave the country.
Crime and Safety
Crime rates in Brazil have reached record highs, with a staggering 30.8 murders per 100,000 people in 2018. Organized crime, drug gang rivalries, and an under-resourced yet violent police force are all contributors. Fear of crime has dampened Brazil’s nightlife, with soldiers and tanks often appearing to keep the peace. Over 15,000 armored cars were sold in 2017 alone. A promise to curtail crime, loosen gun laws, and protect ordinary Brazilians was a large part of President Bolsonaro’s public appeal. A full 62% of young Brazilians surveyed said they would leave the country if they could, and many affluent Brazilians are trying to find a way out.
Environmental Conditions
One of the biggest environmental challenges for Brazil at the moment is deforestation. Brazil is home to the Amazon rainforest, the world’s largest tropical rainforest and a massive source of biodiversity and oxygen production. President Bolsonaro has already made moves to increase deforestation to facilitate higher agricultural production, worrying many environmental groups and activists. High pollution plagues large Brazilian cities such as São Paulo, and the country has a major crisis with waste management. On the other hand, the Brazilian government has been investing heavily in wind power for the last decade, and it is promoting international green building codes around the country.
Educational Quality
Brazilian schools have fallen far behind the recommended average in reading and math scores, exacerbating the current economic crisis. The country’s education system is troubled by inefficient spending, inadequate investment in teachers, and low-quality curricula. There are currently 2,600 public and private universities, and the government is making efforts to improve its vocational training. Nevertheless, many Brazilians are looking elsewhere for better academic opportunities for their offspring. There are already over 13,000 Brazilian students studying in the U.S., making it the tenth largest international student population in America.
EB-5 Project Selection Preferences
Brazilian EB-5 investors are keeping a watchful eye on the unstable political situation unfolding in their country. In order to protect their wealth before it is too late, many EB-5 investors in Brazil prefer to invest in projects that can produce quick results. Like other Latin Americans, Brazilian EB-5 investors lean towards working with regional centers and investing in smaller projects with physical results. However, with the time constraints posed by the current financial crisis in Brazil, the returns from Brazilian EB-5 investments are often secondary considerations.
Capital Flow and Other Challenges with the EB-5 Process
Because of Brazil’s strong trading ties with Florida, cities like Miami have become hotspots for Brazilian EB-5 investors interested in moving to the U.S. However, shifting money out of Brazil is costly and challenging, with bureaucratic banking known for its inefficiency. In addition, monthly transfers out of Brazil are limited to $10,000 BRL, or about $3,000 USD.
Marketing Channels for Investors
Brazil is the world’s fifth-largest country and providesa large source of potential EB-5 investors. However, the EB-5 market in Brazil is highly fragmented, with a nominal number of EB-5-specific immigration brokersfor investors to work with. As a result, most Brazilian EB-5 investors must go through smaller firms such as accountants, real estate brokers, travel agencies, and wealth managers. Many regional centers and project sponsors also hold workshops within Brazil to increase awareness of the EB-5 visa process, as well as targeting Brazilians already in the U.S. who are concerned about their immigration status in the current political climate.