Brazil on Its Own Terms: How to Stop Downplaying Latin America’s Largest Market

Editor’s note: This Q&A was conducted with Ryan Mullen and Guillermo Wasserman of Wasserman West, an Atlanta-based law firm with a focus on Latin America and the sponsor of Global Atlanta’s Latin America Channel, as a followup to the firm’s recent piece: Brazil: The Most Rewarding Market in Latin America, For Those Who Know How to Navigate It.

Global Atlanta: What are some common misconceptions about doing business in Brazil? Americans see a morass of complexity — you see a simply different system.

Can you talk about how changing one’s view of the legal landscape in Brazil and “approaching it on its own terms” can shape a company’s willingness to engage, and chances for success, in Brazilian business?

Ryan Mullen and Guillermo Wasserman: The most common misconception is that Brazil is simply a more complex version of the American legal and business environment, when really it’s a fundamentally different system, built on different premises. U.S. companies that arrive expecting to adapt their domestic playbook often find themselves disoriented, not because the system is irrational, but because their frame of reference doesn’t fit it.

High litigation volume is another area where perception misleads. Think of it like two different sports: in one, the referee calls a foul on nearly every play; in the other, referees are rarely involved and players are expected to absorb contact and keep moving.

A fan of the second game watching the first might assume something has gone wrong, that the players can’t behave themselves, or that the referee is out of control, when the reality is the rules are simply different, and both games proceed in an orderly way once you understand them. Brazil’s litigation volume reflects a legal culture in which rights are actively asserted, filing barriers are low, and formal dispute resolution is a routine part of commercial and employment life. It is not a dysfunctional system, but a different game, and it rewards those who learn the rules.

If you approach Brazil as the United States with more paperwork, you will consistently be surprised by things that are entirely predictable. The companies that succeed there make an accurate assessment early, build legal and compliance infrastructure designed for Brazil, and treat perceived complexity as a known operating condition rather than an obstacle. Because Brazil is the largest market in Latin America, you reap the rewards of your efforts.

Global Atlanta: Brazil’s tax and labor laws seem to be the areas around which Americans carry the most anxiety. How does these differ from the U.S. systems and how do you plan in advance to avoid pitfalls?

Mullen and Wasserman: In the U.S., the IRS resolves most disputes administratively and the Tax Court handles roughly 25,000 to 35,000 new cases a year. In Brazil, the judiciary reports 80.6 million pending cases across all courts as of December 2024 (2025 data has not yet been released).

Since tax enforcement accounts for an estimated 30-40 percent of the total backlog, there are somewhere between 24 and 32 million pending tax-related cases, a volume that dwarfs the entire U.S. federal court docket by orders of magnitude. On the labor side, U.S. companies expect roughly one claim per 100 employees annually. In Brazil the realistic figure is 20 to 30 times that. The common thread is that preparation is mitigation. The risk isn’t the complexity and volume itself, but arriving without a framework for it.

Can you offer some examples of how Wasserman West has helped clients, either before or after the fact, with their Brazilian legal exposure, and what lessons these experiences bring for other firms?

Mullen and Wasserman: Real-world examples are a helpful way to illustrate how these issues actually play out in Brazil. The gap between what appears workable in theory and what functions in practice tends to emerge in specific situations like these:

1. Don’t Take “Yes” for an Answer

In Brazil, counterparties are not only sophisticated but, most importantly, collaborative and relationship-oriented. Though in many instances this dynamic is a strength, it can also create ambiguity for U.S. teams used to more straightforward communication. It is important for our clients to calibrate expectations around what an agreement by Brazilian counterparts looks like in practice.

A “yes” in a Brazilian business context can sometimes mean “we’ll try,” “we’re aligned in principle,” or “we don’t see an immediate issue,” rather than a firm operational commitment. One of the practical ways we have assisted our clients, before resources are deployed based on assumptions that haven’t been fully pressure-tested, is by “smoking out the facts” and distinguishing between actual or perceived commercial alignment and an enforceable agreement.

2. Looking Beyond the Particular Term or Clause

Due to our international experience, we are sometimes asked by other U.S.-based attorneys and professional colleagues to review purely “international” terms, such as an arbitration clause, in cross-border agreements. In one case, as often happens, the arbitration clause was well-drafted for its intended purposes. However, while reviewing the agreement as a whole, we identified that payments to our U.S. client had not accounted for applicable withholding taxes in Brazil. The profit margins on the deal were narrow enough that, once those taxes were applied, the transaction would not make financial sense. In other words, although the arbitration clause was enforceable, the economics were not viable. This is a recurring pattern we see in cross-border work: discrete provisions cannot be evaluated independently and by the time we are asked to intervene our clients have already invested significant resources.

3. Enforceability Is Not Binary

We were asked whether a particular agreement would be enforceable in Brazil. Local counsel confirmed that it would be because applicable Brazilian law permits “forum shopping” and there were minimum contacts that allowed the application of Georgia law. The more relevant issue was not whether the choice of law and venue were enforceable, but how the agreement could actually be enforced in Brazil in the event of a breach.

Several provisions that were central to the client’s risk allocation were unlikely to be enforceable as drafted, notwithstanding the fact that the selection of U.S. law and a U.S. forum were perfectly fine. Brazilian courts will generally respect contractual autonomy, but they will not enforce provisions that conflict with local public policy. Common examples of provisions that we noted cannot simply be “contracted out of” in Brazil include:

• Labor and employment rights, such as employee classification, severance, and statutory protections
• Tax treatment, such as withholding obligations, deductibility, and characterization of payments
• Consumer protection rules, particularly in the context of B2C or distribution
• Agency and distributor protections, including compensation for termination in certain relationships
• Data protection and privacy requirements, particularly under Brazil’s LGPD
• Foreign exchange and remittance regulations, affecting the movement of funds across borders
• Certain intellectual property and technology transfer rules, including registration requirements for enforceability against third parties
• Competition and antitrust considerations, especially where exclusivity or market restrictions are involved

In this case, the agreement was enforceable in the sense that Brazilian courts would accept Georgia law and venue, but, ultimately, several of the provisions that mattered most to the client would likely not have been enforced as written in Brazil.

Companies that avoid Brazil simply because of its unfamiliar legal environment are ceding ground to competitors willing to do the work.

Ryan MUllen and guillermo Wasserman

Put simply: What do companies miss out on if they ignore the Brazilian market?

The largest economy in Latin America, which, due to its substantial internal market, tends to better weather international fluctuations and crises. Companies that avoid Brazil simply because of its unfamiliar legal environment are ceding ground to competitors willing to do the work. The challenges are real, but those same challenges are barriers to entry for competitors, and companies that approach Brazil seriously can gain from accessing a significant world market.

We’ve been talking about internal Brazilian policy, but how can U.S. firms plan for geopolitical risk and ups and downs in the bilateral relationship that have led to the recent tariff rollercoaster? Do Brazilian companies have a leg up when it comes to navigating complexity?

The headlines don’t reflect the reality on the ground. The U.S.-Brazil relationship is deep and durable. More importantly, avoiding a market entirely to sidestep uncertainty is itself a risk, inasmuch as a company that opts out has realized a 100 percent loss of that opportunity.

On tariffs, although Brazil has historically maintained high import duties, that hasn’t been an impediment for companies to succeed in the market. To address the challenges of fluctuating geopolitics, tariffs and other variables (which, by the way, are part of pretty much all cross-border business), companies often resort to the same mechanisms applied for other markets, such as engaging local third parties, performing in-country production or assembly, and building local presence, among others.

Brazilian companies tend to have an advantage in navigating complexity simply because, like many other Latin American economies, they are exposed to more uncertainty and bigger market fluctuations. However, this ability is not an esoteric secret formula; it can be acquired and developed with adequate preparation and due diligence.