Understanding all the connections in the Portugal-Brazil-Angola triangle – PLMJ

The perception of Portugal as a platform to the Portuguese-speaking world derives from years of interconnection enabling it to act as a clear “bridge” for interrnational investors. Portugal has for decades maintained a clear historic, geographic and cultural position within the lusophone world, says Jorge de Brito Pereira, partner responsible for Lisbon-based PLMJ’s International Relations. “From a political and economic point of view I believe that we are only now however consolidating our role, even if this has been a political aspiration for years.”

Looking ahead he sees only further growth in the interconnection of Portugal with the expanding economies, and a dramatic rise in international trade, with Brazil, Angola and Mozambique. Although to date, there have been quite different investment traditions.

“With Brazil, Portugal saw a serious outflow of investment in the late nineties, becoming one of the top three foreign investors in the country. Numbers have decreased since 2001, but strong investments have continued in the last few years particularly focusing on real estate and tourism.”

On the contrary, the inflow of Brazilian investment into Portugal had been relatively insignificant until very recently, he says, although there is now a clear international trend among Brazilian companies towards Europe and in particular towards Portugal.

Economic relations with Angola have historically been more stable but since 2002 they have dramatically increased. “It is now the most important non-European market for the Portuguese economy and similarly to Brazil, Angolan investors have begun to arrive in Portugal – strong investments have particularly been made in the financial and telecommunications sectors.”

Again, he predicts a continued increase in such investments over the coming years. But there is also now an increased triangular flow across the Atlantic, between Angola and Brazil, utilising Portugal as a conduit. The fact that each shares a common language and history is a powerful tool for investments, says de Brito Pereira.

But Brazil, Angola and Portugal are markets in completely different stages of evolution. “Brazil is now one of the most important markets in the world, Angola is one of the most important emerging markets in sub-Saharan Africa, and Portugal is a typical South European mature market. The fact that the markets are so different however creates interesting business opportunities for everybody in the equation.”

Nonetheless, there are clear and significant differences in doing business in each country. The lessons learnt in one country cannot automatically be applied in another.

“One of the most common mistakes of foreign investment is the idea that in your destination country you can use the same ideas as at home – that may be true in very globalised economies like Western Europe, the US or Canada, but is definitively not true in other parts of the world.”

The fact that Portugal, Brazil and Angola share a common language, history, and important parts of their culture is obviously relevant but the differences in doing business in such markets are huge.

”The only way to act successfully in these markets is to understand their differences. ‘Think global and act local’ is what we have always tried to do, and promoted to our clients, preserving the differences between the markets and always working with local lawyers in each jurisdiction.

It is significant that clients are able to depend on local expertise, and to have local distinctions in legal regulation and business practices explained, but also for such differences to be contextualised at an international level – to know what is important, says de Brito Pereira.

PLMJ has operated through referral firms in Angola since 2003 and since 2004 has maintained ties with one of Brazil’s leading firms TozziniFreire. More recently it has established a formal partnership in Mozambique with MGA – Advogados e Consultores, and is looking to extend its reach and build new joint ventures in Cape Verde and São Tomé.

“Portugal is in a pivotal position to act in this new lusophone environment. What clients demand and require is a track record of international experience and knowhow of acting in very different but increasingly significant markets. It is essential that cultural and business similarities are exploited although local differences can never be ignored.”