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The legal environment in Latin America needs to be renewed to attract investors

Despite its great potential and wealth of commodities, Latin America needs to move forward to facilitate controls and reduce bureaucracy to attract more investment, a task that Brazil has been trying to meet this year’s new reforms, Luciana M. said. Cossermelli Tornovsky.

The lawyer spent the last 18 months preparing the International Bar Association (IBA) conference, held in Sao Paulo last week. She was co-chair of the conference with Alejandro Payá, partner of Cuatrecasas – Spain (Barcelona).

Partner of Demarest Advogados, Luciana has a law degree from PUC-SP and has an LL.M. by Harvard Law School. She is vice president of the Harvard Law School Association and president of the Harvard Women Alliance. In addition to being a merger and acquisition partner, she is also responsible for the company’s Social Responsibility and Diversity and Inclusion. Read the conversation with LexLatin below:

Could you tell us a little about the IBA conference in Sao Paulo?

IBA is a 72-year-old London institution with more than 80,000 registered lawyers in 160 countries. Our president is the Brazilian lawyer Horacio Bernardes Neto, which is a pride for us. IBA has 75 committees and I am the only officer of the Committee of Growing and Near Commercial Companies in Latin America. Organizing the conference was a challenge. We had a total of 160 subscribers, exceeding our initial plan, with representatives from 18 countries such as the United States, Germany, the Netherlands and several Latin American countries, such as Argentina, Uruguay, Chile, Peru and Paraguay.

One of the highlights was the presence of important speakers who do not belong to the legal sector. We also had interesting panels such as unicorn companies in Latin Americans and how offices are adapting to the new technological landscape and online mediation, among others. We had two interactive workshops, one on M&A and one on financing, and we discussed gender balance issues in law firms.

This issue of gender balance is on the agenda, especially in Latin America

In addition to being a merger and acquisition partner, I am also responsible for Demarest’s corporate responsibility, which encompasses diversity and inclusion. When I had the opportunity to choose IBA speakers, I made sure to invite a woman as a keynote speaker. But I had to be an enterprising, powerful and inspiring woman, someone who could speak masterfully about entrepreneurship in Latin America. Soon I came up with the name of Cristina Junqueira, co-founder of Nubank. With the new round of investment, fintech is valued at 10,000 million dollars (Demarest represents some of the investors) and is present in five countries. It was a startup that started in a garage and today is a successful case. Cristina gave a show, pregnant for almost seven months, left the audience speechless with her professionalism and her success story.

On the second day, the keynote speaker was the President and CEO of Embraer, Francisco Gomes Neto, who presented everything the company offers of new technologies and disruptive innovations. We had important people and enough diversity in all panels. We have balanced well the presence of men and women, racial diversity and LGBT. I confess that it completely exceeded our expectations.

His panel asked if Latin America could solve the population growth trap with innovations in biotechnology in agribusiness. Which is the answer?

The conclusion was that we need and depend on technological innovations. Today we already have several tests with bacteria and fungi that make us a great advance in agribusiness. The answer to the question? We still don’t have it. Will it be possible? Everyone hopes that it is possible to solve the problem of overcrowding and food shortages, but it has to be somehow not harmful, we have to open our minds and make a great investment in technology. It won’t be easy

How do you evaluate the legal scenario in Latin America with respect to the business environment?

Latin America does not have a very favorable regulatory environment for business. We often say that Brazil is not for beginners. There is still a lot of bureaucracy and it takes a long time to start companies in Brazil, this apparently is also reflected in other Latin American countries. There are many bureaucratic procedures and barriers to entry for new investors because the environment is very controlled. As there is still corruption and mistrust, the authorities understand that control must be done through supervision, control of entry and exit of foreign capital with Central Bank records and various licenses and registrations. We have to open the market a bit to encourage new investors.

Latin America is a region that has a lot of potential, that has natural resources, oil and gas, we have nothing to complain about in this regard. What is missing is that the authorities provide a safer and more reliable environment. Legal certainty is one of the factors. Brazil rose in the ranking and then lost the investment grade, something that was very harmful. The entire legal environment needs to be renewed.

We discussed a bit at the conference on regulation and new technologies and what laws should be adapted. But the time it takes to pass a law in Brazil when it comes into effect is old because we have a newer technology. But we are optimistic, many things are happening, the mergers and acquisitions environment is getting hotter. Everyone’s message at the conference is that Latin America has a lot of potential, it is a very good market in terms of business, entrepreneurship and technology.

The Law of Economic Freedom tries to change this in Brazil, what is your opinion?

The law is welcome. I think there will be a decrease in bureaucracy and will foster the development of Brazil. I am optimistic about this. It will reduce disputes from the point of view that the law already establishes basic principles, gives security to contracts and how to solve a problem. Now you just have to wait, it’s very recent. We need to see how the courts and authorities will react and enforce the law.

Do you see this scenario in the medium and long term?

The messages we are transmitting to the market are positive. Pension reform was a matter of survival. We can compare Brazil with a patient who was in intensive care and got an infection. The reform is the antibiotic for the infection, but the patient remains in intensive care. But if it wasn’t for the antibiotic, it would surely die. The Labor Reform was a good sign, mainly reducing the amount of disputes in the Labor Court. Whistleblowers now think twice before going to court. Fiscal Reform is on the agenda with several positive points. It will not be approved at once, since there are many changes, our tax system is extremely complex. Making our legislation less complicated will bring more legal certainty to foreign investors who wish to invest in Brazil. I think we have a lot to fix and we can’t do it in the short term, but we have to plant now to harvest later.


Also published on Medium.

Published inStartups

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