“Let’s wait until things settle down in Brazil after the election.”
I have heard this sentence many times this week. From founders, from boards, from regional VPs who had Brazil on the 2027 plan.
At first, it sounds prudent. In my experience, it is the most expensive decision a foreign company can make here.
Why? Because things will not settle down. Not in the way you expect.
The common reading is that political risk in Brazil depends on who wins. Left or right. Lula or Bolsonaro. Pick your side, adjust your forecast.
However, that reading is wrong. Political risk in Brazil is not partisan. Instead, it is institutional. Both sides contest the referee, not just the result. And that does not end on election night, whoever wins.
What actually happened
On October 25, Lula won a fourth term with 51.79% of valid votes against 48.21% for Senator Flávio Bolsonaro. He had finished second in the first round. No candidate had ever turned that around in a Brazilian runoff.
Still, the days after were more revealing than the vote itself.
Flávio Bolsonaro did not concede. He criticized a Supreme Court decision that extended voting by two hours, even though both campaigns had asked for more time. He said he would seek to annul the result, missed a court deadline to surrender his passports, and left for the United States while under investigation at home. From there, he called himself the leader of Brazil. His party, meanwhile, acknowledged the official count.
Markets moved hard. On the Monday after the runoff, the Ibovespa fell about 14%, the dollar jumped 8.2% against the real, its biggest daily rise since 1999, and 10-year government bond yields reached around 15%. Most investors, in fact, had priced in a different winner.
Notice what this story is not. It is not “the left won, so business is in trouble.” It is not “the right lost, so democracy is safe.” Each side has its narrative. Moreover, each side accuses the other, and the institutions in between, of playing dirty.
For a foreign executive, the question of who is right matters less than one simple fact: the rules of the game are themselves part of the dispute.
The real political risk in Brazil is the referee
In most markets you analyze, courts sit in the background. They interpret the law. Politics happens elsewhere.
In Brazil, however, courts are central political actors. They decide on candidates, on campaigns, on the rules of the vote itself. On October 25, a Supreme Court justice extended voting hours nationwide while the polls were closing. It had never happened before. One half of the country sees that as the defense of democracy. Meanwhile, the other half sees persecution.
I am not going to tell you who is right. It does not change your business case.
What changes it is this: when the referee is part of the dispute, outcomes become harder to predict. A regulation can shift through a ruling, not only through a new law. A legal timeline can stretch or shrink depending on the political moment. This, therefore, is the risk you need to price. Not the color of the government.
An election does not reset the system
Foreign executives often treat a Brazilian election like a reset button. New president, new rules, new plan.
But it does not work that way. The president governs with a fragmented Congress, powerful state governors and an active judiciary. In April 2026, Congress overrode a presidential veto on one of the most sensitive political issues of the year. In short, that tells you where power really sits.
Policy in Brazil is negotiated every week. Not decided every four years.
So stop asking “what will the new government do?” Start asking “which forces will shape my sector, and how fast can they move?”
Markets overreact. Operators should not.
The Monday selloff made headlines across the world. Brazil’s finance minister said it reflected investor positioning more than fundamentals, and some analysts already call the reaction overdone.
Whether they are right is a question for traders. Your question is different.
The real has already recovered part of its loss, and the dollar is still down for the year. But if you are building a business here, every dip in the real means your dollars and euros buy more Brazil. Salaries, office space, local partners, even acquisitions. In other words, the same headlines that scare a portfolio manager can lower your cost of entry.
Volatility is a problem when you need to exit next quarter. On the other hand, it is just a variable when you plan to stay ten years.
Instability scares the cautious. That is the opportunity.
Here is what will happen in the next few months. First, many foreign companies will pause. Then Brazil will slide down the priority list. Finally, expansion plans will wait for “more clarity.”
As a result, space opens up.
Fewer foreign competitors in your clients’ pipelines. Local partners with more time for you. Talent that is easier to hire. Clients who remember who showed up when others hesitated.
Brazilian companies operate in this environment every single day. They do not wait for stability, because they know it is not coming. The foreign companies that win here are the ones that learn to do the same.
How to plan around political risk in Brazil
The mechanism is simple: build a Brazil plan that does not depend on who governs.
A government-agnostic plan asks four questions.
- How exposed am I to the public sector? If your revenue depends on government contracts, subsidies or public banks, every political swing hits you directly. So diversify toward private clients early.
- Where can a ruling change my business? Map the regulations, tax rules and licenses that matter to you. Then ask which of them could move through a court decision, not just a new law.
- Can I absorb a 20% swing in the real? Price in local currency where you can. Also, keep local costs local. Do not build a business case that only works at one exchange rate.
- Can I move in small steps? Test, learn, adapt, scale. A pilot with a few clients survives political noise much better than a big launch planned around a forecast.
None of this is new advice for Brazil. Yet the election made it urgent. If you have read our pieces on entry strategy in Brazil and go-to-market strategy in Brazil, you will recognize the pattern: what fails here is rarely the market. It is the imported logic.
This is also where a local business development company earns its place. Not to predict elections. After all, nobody can. But to read how each shift actually reaches your clients, your sector and your sales cycle, before it shows up in your numbers.
Waiting is also a decision
The 2026 election is over. The dispute is not, and it will not be in 2030 either.
Of course, political risk in Brazil is real. But it is not a reason to wait. It is a reason to plan differently.
The companies that treat uncertainty as a permanent feature, not a temporary obstacle, will be the ones with clients, partners and market share when everyone else finally decides it is “the right moment.”
If you want to understand how this applies to your sector, it is worth starting with how foreign companies actually grow into the Brazilian market. And if you need local execution to go with it, that is exactly what we do at NoTopo.com as a business development firm and CMO as a Service in Brazil.
