For foreign investors, 2027 is likely to mark a significant turning point in the Brazilian business environment. Three profound and simultaneous movements converge to make this period particularly decisive: the entry into a new operational phase of the Consumption Tax Reform, the continuation of a significant cycle of private infrastructure investment, and the settling of the political landscape following the October 2026 general elections.

None of these factors, in isolation, determines the attractiveness of the Brazilian market. Together, however, they alter the assumptions traditionally used to value, structure, and document investments in the country. For international investors and capital managers, strategic market-entry decisions — whether acquisitions (M&A), greenfield projects, or joint ventures — will need to incorporate a more sophisticated analysis of the allocation of regulatory, tax, and corporate risks.

“Brazil is not simply entering 2027 with ‘more risk’. The country enters with a different risk matrix, and, in several sectors, with opportunities that may be particularly relevant for investors capable of structuring them legally,” assesses Alberto Vieira, partner in the Corporate/M&A area. This shift in perspective will be important for understanding not only what opportunities will be available, but also how different investment structures might respond to the new environment.

The Consumption Tax Reform is steadily shifting from a legislative matter into a consolidated operational and transactional variable as 2027 approaches. With the redesign promoted by Constitutional Amendment No. 132/2023, the country is moving toward a dual VAT model comprising the Contribution on Goods and Services (CBS), a federal tax, and the Tax on Goods and Services (IBS), shared between states and municipalities, along with the introduction of the Selective Tax. For investors, this change means incorporating the tax transition into the assumptions used to value assets and companies.

In this context, due diligence also takes on a prospective dimension. “The question is no longer just about what tax liabilities were accumulated in the past. It also includes how the new system alters the effective tax burden and the generation of credits for the target company, and what impact this has on prices, working capital, and long-term contracts,” Vieira points out. The ability to project these effects could directly influence valuation and operational structuring.

This change also affects acquisition documentation. Representations and warranties will need to distinguish contingencies tied to the previous regime from risks arising from the transition itself. In contrast, price adjustment mechanisms, earn-outs, and covenants may need to account for their effects. In long-term contracts, especially in infrastructure, change-in-law clauses can play a significant role in preserving economic-financial equilibrium amid regulatory and fiscal changes.

The choice of market-entry structure is also becoming more important. A traditional acquisition offers immediate access to operational assets, licenses, and accumulated know-how, but requires careful analysis of historical liabilities and strong guarantees and indemnities.  Greenfield projects, by contrast, offer greater freedom to build the operation from the ground up but expose the investor to construction, environmental licensing, and operational ramp-up risks.

Joint ventures can represent an intermediate alternative, combining international capital and local market knowledge. In this model, however, governance quality becomes especially relevant. Clearly defining, in advance, which matters are subject to veto, financing policies, related-party transactions, deadlock-resolution mechanisms, rules for transferring equity stakes, non-compete restrictions, exit procedures, and valuation criteria can reduce conflicts and preserve the operation’s value over time. “Many corporate disputes could be avoided with greater care in selecting a local partner, and if certain issues were properly addressed during the initial negotiations,” Vieira points out.

This concern with structuring takes on a new dimension in light of the political landscape that is emerging after the October 2026 elections.  “Changes in government can lead to alterations in regulatory priorities, concession policies, privatization programs, public investments, and the orientation of certain agencies and ministries. This does not, in itself, mean a breach of existing contracts or the Brazilian institutional framework,” explains Vieira.

For investors, the distinction between political uncertainty and legal risk thus becomes fundamental. In infrastructure operations, contract predictability and a clear risk matrix can be crucial to project bankability, especially in concessions and PPPs.  Reserved matters, limited veto rights, economic-financial rebalancing mechanisms, step-in rights, and arbitration can help preserve the stability of relationships among investors, partners, grantors, and financiers.

Rather than evaluating each factor in isolation, investors will need to consider how these variables combine. The tax transition may alter valuation assumptions; policy changes may affect regulatory priorities; and the expansion of the infrastructure cycle may create opportunities in sectors whose dynamics depend on long-term contracts and complex capital structures. The challenge will be to turn this risk matrix into structures that preserve value while capturing opportunities.

In this new environment, due diligence also tends to become more cross-cutting, incorporating aspects such as the digital maturity required for the VAT transition, compliance integrity, and adherence to the LGPD (Brazilian General Data Protection Law). “Multinational groups should not simply replicate contractual structures from the US or Europe. The main competitive advantage lies in correctly identifying, pricing, and allocating risks before the transaction is signed,” warns Alberto Vieira.

In 2027, therefore, Brazil’s attractiveness will depend not only on the volume of opportunities available, but also on investors’ ability to interpret a more complex risk matrix and properly structure their market entry into the country. The new framework does not eliminate uncertainty, but it expands the scope for more sophisticated investment decisions — especially for those capable of combining economic analysis, understanding of the regulatory environment, and legal structures suited to the Brazilian reality.

The New Decision-Making Roadmap for Investing in Brazil

• Understanding the new tax environment: The Tax Reform redefines valuation assumptions, cash flow, credits, and contracts.
• Identifying where the capital is being directed: The new infrastructure cycle expands investment opportunities and diversifies funding sources.
• Pricing political uncertainty: The 2026 elections introduce a new layer of political uncertainty, but not necessarily legal risk, for investors.
• Choosing how to enter: M&A, greenfield projects, and joint ventures offer different combinations of opportunities, risks, and exposure to the Brazilian market.
• Protecting the value of your investments: Governance, contracts, guarantees, and exit mechanisms become essential tools for identifying, pricing, and allocating risks.

Download the full magazine: Brazilian Investment Insights 2026_EN