Getting paid

Short-term finance

When exporting to Brazil normal commercial rules should be followed. You should discuss the arrangements for security of payment with the international department of your UK bank, the UK offices of Brazilian banks or UK-based banks who have offices in Brazil.

If you are a first-time exporter to Brazil, the standard method of receiving payment for your goods is by documentary Letter of Credit. The opening of the documentary Letter of Credit is based on the contract signed between the Brazilian buyer and the foreign seller.

There are no problems regarding Letters of Credit opened by Brazilian banks being accepted by foreign banks. The Brazilian bank will make payment provided that the requirements of the Letter of Credit are met. However, you should be aware that a Letter of Credit is a form of contract between two banks. A bank will make payment provided that the documents submitted to it are in strict compliance with the conditions of the Letter of Credit. This is regardless of the purchase contract. To prevent the possibility of a payment being made if the terms of the purchase contract are not met, the seller should check the Letter of Credit against the terms of the purchase contract and request amendments from the buyer if necessary.

Open Account and Bills for Collection are other payment methods commonly used between UK exporters and Brazilian importers when a trustworthy relationship between the two parties has been developed. Major exports and those requiring long-term finance will require specialist payment and financing.

Currencies/MoneyIt can be beneficial for UK companies to offer financial support (i.e. credit) to importers of capital goods into Brazil. Such support is often offered as part of a deal by German or US suppliers which they have put together with support from banks in their own countries, with interest rates far below those available from banks in Brazil. Brazilian interest rates are generally significantly higher than those in the EU. This access to favourable payment terms can make a critical difference in negotiations between foreign suppliers and Brazilian importers.

The Brazilian currency is not freely negotiable and foreign currency can only be purchased for transactions that are authorised and controlled by the Central Bank. The appropriate documentary evidence must be presented to authorised brokers for the purchase of foreign currency. Since January 1999, the Brazilian currency has been allowed to float. There are no restrictions on the remittance of profits.



Brazilians usually have the same approach as Europeans, using a standard contract and altering it to fit different circumstances, and signing the revised version would seem straightforward. However, this will again depend on the organisation, size of the company and type of business involved.

For some, to start a business relationship with a contract might be seen as overly formal, as for them a balanced relationship should begin based on trust, leaving lawyers to one side, at least until a later stage.

Brazilian importers tend to use a standard form of contract in their transactions. Foreign contracts are seldom accepted for fear of being trapped by unfamiliar contract stipulations. Adding special provisions to the standard contract form is normally acceptable.


Dispute resolution

For a contract or a copy of a document to be automatically recognised in court it usually has to be notarised. It is strongly recommended that you avoid having Brazilian courts decide any disputes between parties, as they can be slow and unfamiliar with cross-border disputes.

A good alternative now available under Brazilian law is the use of arbitration, which allows the parties to choose any person or chamber (such as the International Chamber of Commerce or the London Court of International Arbitration) to arbitrate disputes.



Pricing should be competitive and can usually be negotiated in US dollars or Brazilian Reals. Brazilian Portuguese should be used if possible and all costs should be included. Brazilian exporters usually conduct transactions at Free On Board prices, whereas importers would search to find the most cost-effective alternative.



Commercial insurance in Brazil usually covers transportation insurance, financial insurance, fire insurance and multi-risk insurance. The private sector provides credit insurance for exports of consumer goods, raw materials and other similar goods. Speak to your banker or insurance broker for more information, or contact the British Insurance Brokers’ Association for impartial advice. Its details are as follows:

British Insurance Brokers’ Association
14 Bevis Marks

Tel: +44 (0)870 950 1790
Fax: +44 (0)20 7626 9676

Private sector insurance has some limitations though, particularly for sales of capital goods, major services and construction projects that require longer credit packages or are in riskier markets.


Commercial risk insurance for capital goods and major projects

The UK Export Finance Department, UKEF (formerly Export Credits Guarantee Department, ECGD) is the UK’s official export credit agency. Its aim is to help UK exporters of capital equipment and project-related goods and services win business and complete overseas contracts with confidence.

UK Export Finance can support contracts valued as low as £25,000, and potentially up to hundreds of millions of pounds. The responsibility for providing insurance cover for consumer goods that are sold on credit terms of less than two years rests with private sector credit insurers.

UK Export Finance provides:

  • Insurance to UK exporters against non-payment by their overseas buyers

  • Guarantees for bank loans to facilitate the provision of finance to buyers of goods and services from UK companies

  • Political risk insurance to UK investors in overseas markets

UK Export Finance works closely with exporters, project sponsors, banks and buyers to put together the right package for each contract. The full range of UK Export Finance facilities is available to support exports to, and investments in, Brazil.

To help those customers relatively new to exporting, UK Export Finance has a customer service team dedicated to helping new customers through the process of credit insurance and export finance. For more detailed enquiries, please contact UKEF in Rio:

UK Export Finance in Rio:

Contact name: Marcelo Castro - Regional Director –South & Central America UK Export Finance Project Marketing Division Export Credits Guarantee Department

Address: Rua Dalcídio Jurandir, 255 – Suite 206
Island Personal Offices – CEP: 22.631-250 Barra da Tijuca – Rio de Janeiro/RJ - Brazil

Telephone: +55 (21) 3546 5335  /  Mobile: +55 (21) 96858 9535


UK Export Finance’s customer service team (UK):

Tel: +44 (0)20 7271 8010
or Website:


Source - UKTI


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