Alessandro Barillà is the President of the Câmara Ítalo-Brasileira de Comércio e Indústria do Rio de Janeiro since 2015. He was a manager for Arthur Andersen, the Telecom Italia, and Leonardo Groups. Currently, he also is a Business Consultant and a mentor for Start-Up and Business Consultant at Rodenstock Group.

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The interview

Investorvisa.it: You used to occupy, and in some cases still do, top management positions in prominent companies. How do your previous job experiences influence your approach as President of the Chamber of Commerce?

Barillà: Working in the corporate sector, both at multinationals and smaller companies such as Start-Up, helped me develop many transferable skills. I would like to think that I am bringing over to the Chamber the pragmatism required to work with private businesses, as well as an increased awareness of what they need more. I transfer this vision to my collaborators to make the Chamber respond quickly to the requests of our associates and those of all companies, not only Italian and Brazilian ones, with which we are working.

The Chamber’s mission is to create stronger ties between the Brazilian and Italian economies. How much are you involved, both personally and as a Chamber of Commerce, with the Brazilian companies requesting your services?

Over its seventy years of activity, the Chamber became and consolidated itself as a point of reference for Brazilian institutions such as Firjan (industrial federation of the state of Rio de Janeiro) and SEBRAE (government agency for the development of SMEs) in all their dealings with Italy. We provide comprehensive assistance (organizing B2B or B2C meetings, providing logistics, securing permits, finding translators, etc.) to Brazilian companies that need to export to or import from Italy. Firjan and SEBRAE periodically analyse global commercial and business events: they always attend to Italian trade fairs and shows, such as the Salone del Mobile in Milan or Vinitaly in Verona. After identifying the most promising Italian companies, buyers usually, they employ the Chamber to take advantage of our turnkey solution, which includes all the needed logistical support and facilities and assist the investors. Once in Italy, investors will usually attend events parallel to the main fair, meeting local companies and suppliers.

Brazil is one of the largest economies in the world and the biggest one in Latin America. What is the economic outlook of the country nowadays?

Brazil is going through a very delicate phase, which partially resembles the one that Italy faced in the 90s in the aftermath of the “Mani Pulite” operation. The new government is in office for less than a year and is a sign of the renewal of the ruling class and of the logic that dominated Brazil in the last twenty years. The very capable Minister of Economy is working hard to make the country’s economy more liberal, he is abandoning protectionist measures and fostering economic competition. We are sure that Brazil will soon experience one of the biggest periods of economic expansion in its history. Companies intending to enter the Brazilian will better prepare right now, exploiting the lower exchange rates and entry costs. This auspicious situation will not last long.

Rio de Janeiro is Brazil’s second city in terms of economic relevance, and its metropolitan area has twelve million inhabitants. What characterizes the regional economic ecosystem, and what are its main strengths?

The core business of the city and the state of Rio de Janeiro is oil. The crisis faced by Petrobrás, due to the well-known corruption scandal and the oil price collapse on the international market, has strongly affected the economy of the region. This is in the past now. We are witnessing a steady development both inside and outside Brazil, and several firms in the sector began investing once again. Our Italian companies, which are associated with the Chamber, play a significant role also in the other main sectors of the city’s economy. I am talking about ENEL in the energy sector, TIM in telecommunications, Generali in the insurance industry and Bracco in the healthcare sector. Small and medium-sized enterprises are usually involved in the supply chain of the oil sector, providing components and materials to large players. Their activity is very dependent on the latter’s progress, which tends to influence all the associated industries. The Offshore Technology Conference (OTC) is starting on October 30. It is going to be aimed at businesses operating in the oil sector and will involve smaller companies focusing on supplying components for the industry. In Brazil, Italian companies, thanks to their experience and technology, are in the vanguard of this sector.

The economy of Rio de Janeiro developed a strong affinity for services, thanks to the large companies that operate in the city. Being one of the fastest-growing economies in the world, what opportunities does it offer to foreign investors and, more specifically, to Italian ones?

The service sector found fertile ground in Rio. It will surely return to its usual excellent standards during the current economic recovery. Italians companies displayed all their proficiency in consulting, as shown by the work and the latest acquisitions made in Brazil by Business Integration Partners. The service sector is to be considered as complementary to the other two, which include the agribusiness, energy and manufacturing industries. If there is an economic recovery in these sectors, services will follow, thanks to greater opportunities to provide logistics and facilities. I want to give an example of what that means. The oil sector employs many workers, so an industrial catering company will have, thanks to this increase in demand, more incentives to invest in Rio. This process opens the door to foreign investors. The easiest way to enter the Brazilian market still is the acquisition of a group, ideally Brazilian, already present in the country or an alliance with it. In this way, foreign companies will bring their capital and expertise to Brazil more easily.

Given this, what can we expect from Rio de Janeiro and its entrepreneurs in terms of their commitment to foreign markets? Can the city represent a starting point for the Brazilian economy as a whole to intensify its relations with foreign industrial and financial partners?

Rio de Janeiro has always represented the entirety of Brazil in the collective imagination. Everything that happens in the city, for better or for worse, is reported worldwide. The local government is fiercely committed to improving security and reducing the social and economic gaps existing in the city. With the support of the federal government, let us not forget that President Bolsonaro is from Rio, the city can be a driving force for the economic growth of the country. Some Carioca companies succeeded in their internationalisation efforts. The Trigo Group, which operates in the food sector and is the owner of the Spoleto brand, has expanded to other South American countries and the United States. Despite this example involving a private group operating independently, large companies, such as Petrobrás or Vale, are public or at least under state influence and an impulse to further their internationalisation will come from Brasilia. I see better opportunities for Paulist start-ups, which are more dynamic and possess more readily available capital. “Beach fashion”, as we call it in Brazil, may be ready to invest in foreign markets, as Osklen did in Italy. Even Stefanini’s IT consulting has reached our country. Unfortunately, these are isolated occurrences.

What is the current state of economic and commercial relations between Brazil and Italy? Do you think there could be room for improvement, in particular concerning the Brazilian presence in the Italian market?

Thanks to ENEL’s latest investments, Italy is today the largest foreign investor in Brazil. We are sure that many Italian companies are ready to invest because we are talking about a market comprising 210 million consumers and with unique growth potential. Brazilian companies are beginning to internationalize, in the coming years we will see local SMEs looking with more interest at the European market, and Italy and Portugal are the countries that will benefit the most thanks to their characteristics. Among these, the chief one is the link that many Brazilian with Italian or Portuguese heritage feel with either country. The Brazilian small business owner intending to invest abroad and possessing dual citizenship naturally thinks of the country of which he already owns a passport. Portugal is performing much better than Italy in this competition, communicating what are the terms for moving to the country more effectively. The incentives offered by Italy are not as known nor as effective due to a lack of communication. Such measures did not arouse the interest of the Brazilian people.

The presence of a vast Italian-Brazilian community is one of the main characteristics of the country. Has this influenced the perception of Italy among Brazilian entrepreneurs, considering the also quite substantial presence of Brazilians in our country?

The “strong Italian spirit” in Brazil (about 30 million descendants of Italian origin) is still today an asset not much valued by Italy and our companies. Italy and the Italian government need to do more. Brazilians love Italy, our lifestyle, cuisine, fashion, and cars and I think we need to stress this connection. There is a profound cultural continuity between the two countries, such as putting a high value on the high quality of life, the love for food and wine, or the sea. Football is a shared passion able to unite us, just think of all the Brazilian players who used to play and play now in Italy. The traditional Italian gastronomy holds a particular allure for Brazilians, so the most renowned and sought-after restaurants are usually the ones offering Italian cuisine.

Italy offers non-EU entrepreneurs who want to invest at least half a million (in start-ups) or one million (in other companies) an investor visa. This tool, with all the advantages that it entails, can be attractive to the average Brazilian entrepreneur instead of applying for Italian citizenship through jus sanguinis?

For sure, but we must promote this incentive better, as it is not much known right now. The program can also benefit from lowering the half-million threshold by applying some mitigating factors. They could take into account the investment’s social impact or their support for artisanal handicraft or small family businesses. I think that such a solution could have a strong appeal on the Brazilian investor who would perceive the investment as less expensive. This would also resemble a Brazilian law that gave a tax break for investments amounting to at least 500,000 reals that created jobs in underdeveloped areas or favoured local artisans. Italy should review the legislation to favour small entrepreneurs who may have only 100,000 euros to invest. To provide an even greater incentive, Italy could envisage lower thresholds for foreign investment destined to certain areas, such as those in the South, which are less developed or are suffering from a declining population, such as in Basilicata, Calabria, and Sicily.

Could the cultural bond between Brazil and Italy also encourage a hypothetical Brazilian patron to donate for the preservation of the Italian cultural heritage and therefore apply for the same visa as the standard investor?

I think so. Many Italians built their fortunes in Brazil and their descendants, properly motivated and encouraged, could be interested in paying tribute to their roots.

The foreign entrepreneur who intends to transfer his tax residence to Italy will benefit from a favourable tax regime (100,000 euros per year on all incomes produced abroad). Do you think that this and a 30% taxation on income produced in Italy can attract Brazilian entrepreneurs who are interested in the economic possibilities offered by Italy?

Yes, it is a good incentive. Nevertheless, to have concrete benefits from this tax regime, the potential recipient should earn more than two million reals a year, and those belonging to this category are deeply rooted in Brazil and will hardly abandon it. We must also consider that the income tax in Brazil is quite low, equal to 27.5%. We need a better communication strategy. The Italian government could use the Chambers of Commerce to organize special presentations and seminars on the subject. It is an expertise that the Chambers possess, and would be extremely beneficial for a government aiming at attracting foreign investors. Spain, the United States, and France should be a model for Italy on how to manage our relations with Brazil. There are enormous margins for improvement in this respect. The commitment of Italian governments was uneven: we welcomed a delegation during the Rio Olympics, and last year some ministers visited Brazil. The new government should pay more attention to Brazil, and the legacy of Italian Brazilians. President Bolsonaro, for example, has Italian roots and loves our country. By starting coordinated and continuous cooperation programs in the economic and social sectors, Italy could benefit from all the potential that Brazil has.