Administrative Law as the Foundation of Business Internationalization: The Case of Foreign SMEs in Brazil
By Rogério Santos do Nascimento
Attorney at Law | Specialist in Administrative Law
Many small and medium-sized foreign enterprises have turned their attention to Brazil as a strategic destination for the expansion of their businesses. The country presents a plural economy, a significant consumer market, and an abundance of natural resources. However, mere economic attractiveness is not enough. Before any internationalization initiative, it is essential to understand that, in Brazil, business success requires not only market knowledge but, above all, mastery of the legal-administrative framework that governs the relationship between the State and private parties.
In this scenario, Brazilian Administrative Law emerges not as a peripheral legal field, but as an essential tool, prior to judicialization and structuring the entire business operation. Without the proper technical preparation in this field, a foreign company may find itself entangled in bureaucratic obstacles, regulatory sanctions, or even in administrative disputes that compromise its operations.
Unlike the environment of other countries, where the interaction between companies and the public sector tends to be more objective, predictable, and less bureaucratic, Brazil maintains a tradition of state interventionism. This state presence is manifested through licenses, authorizations, concessions, continuous inspection, the performance of regulatory agencies, and strong external oversight exercised by audit courts and public prosecutors. In many cases, the Public Administration acts unilaterally, through administrative acts that produce immediate effects, requiring prompt and precise reaction from the affected company.
It is not merely a matter of understanding the applicable legislation. The real challenge lies in navigating the inner workings of the Brazilian public administration. The complex federal structure, with legislative and administrative powers fragmented among the Union, States, and Municipalities, can generate conflicting or overlapping requirements. Added to this is the existence of flawed administrative practices, such as informal demands not provided for in regulations, contradictory decisions among internal sectors of a single agency, or even the deliberate delay of certain public authorities. Such practices, although reprehensible, are part of the reality faced by both domestic and foreign entrepreneurs.
Ignoring this scenario compromises the viability of the investment. Risk analysis for entering Brazil must go beyond financial, exchange rate, or logistical indicators. It must encompass, with equal rigor, the regulatory, institutional, and administrative aspects that can silently render an operation unfeasible. Many serious and well-intentioned companies have already seen their plans collapse in the face of administrative inefficiency or arbitrariness, having to resort to the judiciary as a survival measure, when preventive action would have avoided litigation.
The legal consolidation of a foreign company in Brazilian territory necessarily involves compliance with the local administrative legal regime. It is in this context that Administrative Law acts as a true foundation. It enables the understanding of the limits and duties imposed by law, the valid forms of expression of public authority, the means of administrative and judicial challenge of unlawful decisions, and the mechanisms for participation in public tenders, concessions, or agreements.
This is not only about avoiding irregularities or liabilities. It is about building, from the outset, a solid, technically grounded, and institutionally legitimate foundation for business development. This means structuring contracts in accordance with the legal regime of administrative contracts, implementing compliance programs adapted to Brazilian anti-corruption legislation, understanding the requirements of regulatory agencies in the relevant sector, and, above all, establishing a culture of respect for local administrative norms.
A company that arrives in Brazil without this legal preparation runs the risk of walking blindly, facing obstacles that could have been foreseen and neutralized. On the other hand, the one that understands the central role of Administrative Law operates with security, predictability, and institutional responsiveness. Brazil, despite its challenges, remains one of the largest economies in the world and offers real opportunities to those companies that know how to understand and respect its legal order.
It is concluded, therefore, that business internationalization, especially in the case of small and medium-sized foreign enterprises, should not be guided solely by economic indicators. From the initial planning stage, a thorough analysis of administrative legal feasibility is essential. Brazilian Administrative Law is not merely a branch of law. It is the strategic instrument that sustains, guides, and protects the presence of foreign businesses on national soil.