Paraguay gains space as a gateway for expansion for Brazilian companies, points out Citi
Bank sees growth in the internationalization of companies in the country and cites taxes, incentives and labor as attractions in the region
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM ESTADÃO · 2 MIN
Paraguay appears as an expansion destination for Brazilian companies, according to Citi. According to Estadão, the bank identifies a movement of companies in Brazil that seek to grow beyond its borders and sees the neighboring country as an alternative to this plan.
According to Estadão, the internationalization of Brazilian companies is growing and follows a global movement, in the assessment of Gaurang Hattangdi, new head of Citi's Commercial Bank for Latin America. He states that the strategy is driven by the search for scale and in response to rising trade tariffs. For Hattangdi, internationalization is one of the best options for companies capable of expanding business. He spoke for the first time to the Brazilian press after taking office.
José Alberto Benamor, new head of Commercial Banking at Citi in Brazil, gave his first interview in the area. According to Estadão, he stated that companies realize that they can avoid some taxes and receive incentives from the government in Paraguay. Benamor also cited the country's good labor capacity as a factor considered by companies.
Citi's Commercial Banking serves companies with annual revenues between US$10 million and US$3 billion, according to Estadão. This range brings together companies that have already surpassed the small business stage and are not yet large corporations, precisely the profile that, according to the bank, usually evaluates expansion to other countries.
Benamor's argument touches on a debate dear to those who defend fiscal responsibility and lower taxes: each country's tax burden starts to weigh on the decision about where to produce and invest. This logic applies to companies of any size, but it gains weight when the company needs to choose between expanding its operations in Brazil or another country in the region.
What changes for the investor
The information collected does not provide figures on the volume of investments, deadlines or results of companies in Paraguay, so it is not possible to measure from this interview what the direct effect on the shares will be. If the trend is confirmed, listed companies that expand operations abroad may change their exchange rate exposure and tax structure, points that investors can monitor in balance sheets and earnings conference calls. This analysis is not a recommendation to buy or sell and does not predict prices.
Automatically translated from Portuguese.
