What are the reasons for multinationals to be based in a South American Mega Cities like Sao Paulo, Brazil?

Question

Apart from outsourcing, cutting costs and labour, what other reasons are there?

Answer 1

There is not much outsourcing in Brazil.  It is very expensive actually.  Social Charges are high and productivity is not tremendous for lower paid jobs.  Many educated people in Sao Paulo earn close to US wages.

They base their Brazilian operations in Sao Paulo typically to serve the Brazilian market.  Very few regional centers are there because they don't speak Spanish.  Also, there is really no advantage in Brazil other than for Brazilian companies located there (like Petrobras and H Stern in Rio or the banks in Sao Paulo or the manufactures in Campinas or the South).  

The Brazilian Real has doubled in value the last 5 years form $0.25 to the dollar to almost $0.50 today, add inflation and Brazil ,especially SP,has become VERY expensive from a formerly very cheap place.

I lived there in 2002 and dinner at one of the best restaurants (Barbacoa) including drinks was about US$12 per person, it is now over US$35 for the same meal.  Almost nothing is cheap there now.

Answer 2

Countries like Brazil have large finanical sectors so obviously it would make sense to have a branch there.

Answer 3

probably the best educated and trained workforce in latin america, which is a pretty strong pull factor - little or no need to bring in expensive expats

Answer 4

Don't put words in the mouth of others. Don't ask for others to glorify your city, dude.

Don't forget Rio de Janeiro, a metropolis at the same level.

Don't forget that the greatest brazilian multinational - PETROBRÁS - is based in Rio, not in São Paulo.

Answer 5

low wages, low rights, more earn

Answer 6

Brasil is almost 200Million pèople strong=market!!!

The state of Sao Paulo alone is almost 40Million people.

Anyother reason?

Plus  strong industrial base and raw materials!

Answer 7

Depends on the type of multinational. If for instance a health care manufacturer, remember a great source of raw materials are available in such places as Brazil in order to manufacture medicines.

Multinationals also establish themselves there, because of logistics issues (international transportation), making it cheaper to transport locally than to import from overseas the finished products. Other reasons for this might be the fact that the Brazilian Real (local currency), is subject to exchange variations that become an important source of income, thus the reason why most multinationals have huge treasury departments, precisely to play back and forth with these resources that generate importan proffits.