Andetur Brasil Ltda.

High rewards for private capital due to limited availability

Brazil 's financial institutions are burdened with an enormous debt burden from the past, and both the national bank and the commercial banks have only limited resources to fund investments in the country's industry.

Western banks collect cheap money via the savings deposits from the average consumer, and then make them available to the entrepreneurial world. Brazilian banks can not rely on this cheap source of money, and the rich minority has taken over the role of financing industry - and real estate - directly.

And obviously, as demand by far outstrips the available supply, the premium offered to capital investors is high.

Many projects have exits in 18 to 24 months

We, as an association, generally invest in projects that have a relatively short time horizon and like to free our investors' money up quickly, often 12 to 18 months after the initial investment. Long term capital appreciation and/or rental income may be interesting, but we have found that quick rotation of our investments usually delivers higher returns while it limits the exposure of your capital.

Low property transfer costs

Brazil only applies a 2% transfer tax on real estate property - which keeps the transaction costs among the lowest in the world.

Low taxation on value increase, and high flexibility

The Brazilian taxes are relatively low and even for speculative investors (who buy property and flip it around in the first 5 years after purchase) taxes are only 20% of the value increase.

Yet very often buyer and seller agree to declare only part of the real value in the official sales contract, which offers additional flexibility. If you keep a property for 5 years or longer, there is no tax at all on the value increase of your property!

But there are a few creative tax planning tricks that allow for exceptionally interesting operations.

• Under certain conditions, real estate professionals can buy and sell a property within the same fiscal year with little or no taxes. Using this rule, you can buy a property for, say, US$ 100,000 and sell it soon thereafter for US$ 500,000 - resulting in a clean US$ 400,000 profit that can be re-exported... Obviously, such operations require the highest confidentiality. If you are interested, please contact us for a private conversation about this matter.
• Low visibility for European / US taxes - Brazil is very happy to receive foreign investments and doesn't really care whether money coming from abroad has been taxed in its source country or not... As long as the money enters Brazil via an international (even offshore) bank account (which proves that it is not 'black money' earned in Brazil itself) they are happy with the investment. And they have no motivation to communicate this to any other countries. Obviously, there is no way for European or American authorities to find out you own property in Brazil - unless you tell them or are very sloppy with your paperwork. And if need be, you can also own Brazilian property via a local or off-shore company, for even further privacy.

Limited Social, Political and Economical risks

Brazil is a highly catholic, peaceful, democratic culture, quite unlike other South American countries.

In spite of huge social inequalities, and well-known corruption, there is almost no social violence.

For the past few years, Brazil has been wisely and successfully using western monetary and fiscal policy, and it has mastered the control of inflation and currency rate, in spite of astronomic international debts from the past.

Finally, nature is generally benign; there is no risk of hurricanes and the abundance of water (and hydro-electric plants) is an additional asset.

The Brazilian GDP hides a sizeable upper class with world-class buying power

While the Brazilian GDP is only some US$ 4000 per inhabitant, it's social inequality hides a large affluent class that has a buying power that at least rivals the European and US consumers.

In fact, wealth in Brazil is extremely badly distributed. 10% of the population owns no less than 50% of all resources, and on the other hand 50% of the population must make-do with no more than 10% of the countries resources.

If one applies these ratios to the GDP, the wealthiest 10% (some 16 million consumers, concentrated in the South: Rio , Sao Paulo , Belo Horizonte ) have a GDP per capita that is quite comparable to most of Europe or the US . And in fact, their standard of living is even higher: as the cost of living is much much lower, buys a lot more luxury than we can imagine...

Moreover, the rich keep getting richer; not surprisingly if you realize they have a labor force at their disposal whose monthly wage is just some US$ 150-200 ...

As a result, the Brazilian upper class (not forgetting the upper class of other South American countries, who love to holiday and invest in Brazil ) generates a strong a growing demand for holiday homes and investments by itself.