Expert: Ken Rapoza Cruz - 12/12/2008

Question
QUESTION: Hi Ken,
I am Rohit, based out of Calcutta, India. I am about to move to Brazil for work purpose, on a work permit. My employer is an Indian-based Company and my posting would be either Rio or Sau Paulo.
I am a bachelor and would be moving in alone. I have been offered a compensation package of 3,000 USD per month apart from an annual bonus & incentive on performance. My Company would be bearing my accommodation cost, tax component of my salary, medical insurance, travelling costs for business (capped) & my mobile / internet costs.
I would like to know:
(1) Is the compensation offered good enough for meeting living expenses and having a decent saving potential in Rio or Sau Paulo?
(2) Which would be the recommended places to take up accommodation in both these cities? A location-wise update would be very helpful

Thanx...

ANSWER: Well, if you are getting $3,000 a month AND a living bonus, such as rent paid, then you need to find out what your company will allow you to spend on rent. $3,000 a month is pretty good for Sao Paulo; not fabulous, but good.


1) Yes. you can rent a very nice place in Rio or Sao Paulo for $1,000 a month. Youll have $2,000 left over for food and savings. You will spend about $100 to $150 a month on food for yourself, unless you just eat like a pig. If you go out to eat a lot, then the cost will rise, of course.

2)I cant answer that question cuz I dont know where your office is located. As close to work as possible is recommended in both cities as traffic is horendous, especially in Sao Paulo.




---------- FOLLOW-UP ----------

QUESTION: Thank you Ken for the prompt response. I will definitely check the company-paid limit on rent.
My office set up is still underway and would be in a location from where accessibility to the port area would be easy - be it in Rio or Sau Paulo. In this context, I would like to ask you:
(1) Are rented accommodations near the port area in Rio or Sau Paulo good and safe and what are the approximate prices they are available at ?
(2) I have read a few articles about safety being a concern in Rio, especially after dark. How true is this ? Is there a safety problem in Sau Paulo as well?
(3) I would not be having a personal car initially and would therefore have to use the public transportation for local travel to meet clients for business. How would you rate the public transport in both Rio & Sau Paulo? What would be the approximate fares?

Thanx again. Really appreciate the help.

ANSWER: By port, do you mean maritime port or airport? There is no port in Sao Paulo city. Its in Santos, in Sao Paulo state, about an hour away from Sao Paulo city. Depending on the neighborhood, yes it is "safe".  Figure if you are paying between $700 and $900 a month in rent, you are living in a fairly safe and decent neighborhood. thats solid upper middle class.

I dont know about rental areas near ports in rio. sorry.

Rio is a potential nightmare, but the violence is mostly in the hills. DONT live in the hills. There are nice upscale apts there. Stay away from them. If in Rio, you will end up in Ipamema (loaded with gays), Leme, Leblon or Copacabana. Another great place is Botafogo. very nice place, very safe, as far as rio goes. dont walk around town like a rich man in a rolex and counting your gold bars and dollar bills, or flashing pictures with your $1,500 Nikon digital and you should be okay. In the hills, you risk getting hit by a stray bullet in the police vs drug lord wars, going on daily, and exploding at any given time.

Public transportation in both cities are fine. Plus there are cabs everywhere.

I take the bus in Sao Paulo daily. it costs the equivalent of 90cents USD, or R$2.30 one way. Metro is same price. Figure Rio's got to be about the same. Maybe even cheaper.

In SP and Rio, live within a 45 minute walk to work. Thats my advice. I live within a 30 minute walk. Sometimes the bus home or to work takes me an hour.



---------- FOLLOW-UP ----------

QUESTION: Hi Ken,

By "port" I was referring to maritime port. Thanks for the tip on the preferable locations to stay and the transportation inputs. Really appreciate the same.
I went back to my prospective employer to check on the limit they would allow me to spend on house rent & they said that it shall depend on me, keeping safety & easy access to work location in mind. Hence, I think the rent part is taken care of.
However, the tax component of salary is probably not going to be borne by my prospective employer which brings me to my question:
(1) If 3000 USD per month is what I am being offered & my Company is Indian-based and would be setting up operations in Brazil, what would I have to pay as tax from this amount?
(2) Is there any other thing which also has to get deducted from salary received in Brazil? For example, social security or something else?
Just to inform you, I would be having to open a bank account in Brazil where this 3000 USD would be transferred every month by my prospective employer.

Thanks again..  

Answer
Okay, so rent looks good for you. Figur eyou will spend at least $700 a month for a one bedroom; which is all you need. I spend around $1,100 for a large 140 sq meter three bedroom in a very nice neighborhood; but that goes up and down with the dollar. The bill is around R$2,500 in local currency.

You dont have to pay Brazil taxes if you are just goign to be here for a little while. You can get around it. OR you can just declare a portion of your salary with a local accountant so youre not hit with a full tax burden. Taxes will be as high as 25%. So better  yo udont declare at all. Yo uwil need a CPF to get an apt. It wont be cheap. A CPF can be applied for in a post office or at the local consulate in INdia, which makes more sense fo ryou to do and get it out of the way befor eyou come here. As you dont know anyone here, you are going to have a very hard time getting an apartment because apt owners will require a contract co-signer. If youre company is in Brazil, they can be  your co-signer. Yo uahve to tell them taht ahead of time. They have to co-sign your contract, or you wont even get an apt.

Opening a bank account here will require a CPF. Get one. And it will require full disclosure on your income. Figure you will pay 25% in federal income taxes. But if the co is paying your rent, that puts you at break even. If you ahd to pay rent and pay taxes, itd be tough on 3k a month.