Navigating the Tides of Change: Brazil’s Economic Transformation and the Emerging Role of Foreign Tech Investment
A Decade of Gradual Evolution (2015–2025)
Between 2015 and 2025, Brazil has undergone a steady economic and regulatory evolution. Shaped by global macroeconomic changes, political reform, and a growing focus on digital infrastructure, the country is gradually diversifying its economy—and this shift is beginning to be reflected in the profile of international companies entering the market.
After periods of volatility, the nation’s economic growth—according to the World Bank—averaged above 3% between 2022 and 2024, driven by robust domestic consumption, resilient services and agricultural sectors, and a recovering labor market. Despite structural challenges such as inflation, budget rigidity, and a weakened currency (the Real), many government reforms and the private sector momentum are creating new opportunities—especially for businesses attuned to local dynamics.
ILM Group’s Perspective: A Gradual Change in Foreign Investment Profiles
At ILM Group, a consulting and Business Process Outsourcing (BPO) firm specialized in guiding international companies into Brazil, this shift has been observed firsthand over the past ten years. While traditional industries—such as industrial manufacturing, energy, and logistics—continue to play a key role, there is a noticeable and increasing interest from players in the tech, fintech, agrotech, and digital infrastructure sectors.
“It is not a complete transformation, but a gradual diversification,” says Fabian Peters, CEO of ILM Group. “We still serve many traditional companies, but we’ve seen a growing number of clients from more agile, tech-driven sectors in recent years.”
This evolution is echoed in broader market trends. The agricultural sector, for example, remains vital to Brazil’s economy but is increasingly embracing modernization. The adoption of IoT sensors, AI-driven analytics, and precision farming techniques—highlighted by the World Bank and Equinix—is improving efficiency and yields while reducing waste. Meanwhile, Brazil’s technology sector, particularly in areas like cloud services, cybersecurity, and digital payments, has expanded significantly, supported by targeted public investment and a highly connected population.
Digital Economy and Infrastructure: New Growth Anchors
Brazil’s digital economy is becoming increasingly relevant. Government initiatives such as the E-Digital Strategy and the National AI Plan have provided frameworks for growth, backed by over USD 4 billion in investment in digital infrastructure and applied innovation.
São Paulo has solidified its role as a national tech hub, and emerging projects like Rio AI City—which seeks to transform Rio de Janeiro into a major regional data center hub—illustrate how digital infrastructure and renewable energy are becoming increasingly intertwined.
“Some of our newer clients are drawn to Brazil by the scale of the consumer market and the maturing digital infrastructure,” Peters notes. “What used to be barriers—like regulation and red tape—are becoming manageable with the right preparation.”
Agtech and Sustainability: Early Signs of a Broader Shift
Brazil’s agriculture sector remains a pillar of its economy, contributing significantly to GDP and exports. Yet it is also modernizing. According to the “Radar AgTech Brasil 2024”, the number of agtech startups has grown by 75% since 2019, supported by innovations in precision agriculture, biotechnology, and climate-resilient practices.
ILM Group has seen a gradual but rising number of international investors exploring opportunities in sustainable agriculture, bioeconomy, and green infrastructure, particularly in connection with ESG-driven objectives.
Structural Reforms: Improving the Business Environment
Recent government reforms—such as the ongoing indirect tax overhaul and regulatory updates in digital finance and stablecoins—signal Brazil’s intention to improve its business climate and attract long-term investors. Still, challenges remain: public debt is projected to reach 79.6% of GDP by 2028, and spending rigidity continues to limit policy flexibility.
For international companies, this creates both risks and opportunities. To improve the odds of success, a local partner is advisable. ILM Group helps clients navigate these regulatory shifts, offering a structured approach to market entry that integrates advisory, paralegal, accounting, and fiduciary services.
“We focus on helping our clients anticipate change,” says Peters. “Brazil is becoming more and more attractive, perhaps accelerated by macroeconomic developments in other markets like the US and China, but success still depends on getting the structure right from day one.”
A Region of Cautious Optimism
While Brazil stands out as a leader in Latin America’s digital transition, the broader region remains challenged by low investment rates, skills gaps, and uneven digital infrastructure. Still, rising digital demand and regional integration efforts—such as the EU–Mercosur agreement—could unlock new momentum.
About ILM Group
Founded in 2015, ILM Group provides international companies with the full suite of back-office services required for strategic entry into Brazil. With offices in São Paulo and three other regions, the firm supports more than 100 clients from around the world, offering services that range from legal representation and tax planning to EOR and market intelligence.
“Our mission is not just to simplify expansion,” Peters concludes. “It is to act as a partner of trust and make sure companies expand intelligently, legally, efficiently and sustainably.”