Brazil’s New Reciprocity Law: What Global Investors Need to Know

In April 2025, Brazil approved and enacted the Economic Reciprocity Law, granting the federal government legal authority to adopt trade measures equivalent to those imposed by other countries on Brazilian exports. In July, a presidential decree officially regulated its implementation, establishing formal procedures for the adoption of countermeasures.

This legislation signals a notable shift in Brazil’s institutional posture toward global trade. For international investors, especially US-based firms, this new legal landscape calls for a more sophisticated approach to risk assessment, market entry strategy, and regulatory positioning.

A New Layer in Brazil’s Regulatory Landscape

The Reciprocity Law does not disrupt the foundations of Brazil’s investment climate, which remains supported by a predictable legal framework and stable institutions. What it does introduce is a new dimension in the regulatory risk matrix: trade geopolitics.

Companies with ties to the United States must now evaluate not only domestic economic and regulatory factors, but also the potential consequences of bilateral political decisions. Risk assessments that once focused solely on tax exposure, licensing, and sectoral regulation must now account for scenarios involving retaliatory tariffs, import restrictions, and administrative measures.

Importantly, the law’s impact will be shaped not just by the countermeasures themselves, but by how they are framed, communicated, and perceived.

Sectors That Require Closer Risk Mapping

Sectors warrant closer attention include:

• Technology and electronics
• Medical devices and pharmaceuticals
• Aerospace and defense
• Agribusiness with imported inputs
• Automotive and industrial machinery

Establishing a local presence, forming partnerships with Brazilian entities, and adopting flexible corporate structures can mitigate exposure while unlocking opportunities linked to government incentives and institutional access.

Structuring for Resilience

In volatile geopolitical contexts, the choice of market entry model becomes a strategic differentiator. Structures based solely on exports are increasingly vulnerable to trade disruptions, while local operational models offer greater insulation and market agility.

• Joint ventures with Brazilian partners, enhancing institutional legitimacy
• Local production or assembly, reducing exposure to tariffs and easing access to public tenders
• Acquisition of local assets, facilitating faster regulatory adaptation and integration into the Brazilian ecosystem

These models do more than reduce risk—they enable competitive advantage, particularly in sectors with regulatory sensitivity or government oversight.

Compliance, Governance, and Operational Predictability

Operating safely in Brazil requires a proactive, integrated compliance framework. Foreign companies should implement governance practices that align with both local and international standards, including:

• Rigorous due diligence on local partners and suppliers
• Anti-corruption policies aligned with both Brazilian law and the US Foreign Corrupt Practices Act (FCPA)
• Internal whistleblower systems and ongoing training
• Continuous monitoring of tax, labor, and regulatory obligations
• Regular audits focused on sector-specific risks and compliance gaps

These structures not only minimize legal and reputational risks—they demonstrate institutional maturity, which is increasingly relevant in Brazil’s high-compliance sectors.

ILM Group: Strategic Advisory for a Changing Landscape

In this evolving environment, local partnership is no longer a convenience—it is a necessity. ILM Group supports global companies by integrating strategic guidance, legal structuring, and institutional representation.

• Ongoing regulatory and policy monitoring
• Corporate structuring designed for governance, agility, and control
• Fiduciary representation, enabling secure and timely decision-making
• Stakeholder engagement and institutional relationship management

We serve as a bridge between Brazil’s complex institutional framework and the strategic goals of global companies seeking secure and sustainable growth in the country.

Brazil Remains a Strategic Destination—For Prepared Investors

The Reciprocity Law should not be seen as a deterrent, but as a signal that doing business in Brazil requires greater awareness, deeper preparation, and smarter structuring. The fundamentals remain unchanged: Brazil is Latin America’s largest economy, with strong demand across healthcare, infrastructure, clean energy, technology, and agribusiness.

With the right approach, Brazil remains a high-potential, resilient, and profitable destination for long-term global investors.