Rio de Janeiro means business: the 2016 Olympics and expansion of homegrown companies like Petrobras and Vale are helping Rio to emerge from the shadow of Sao Paulo.


RIO DE JANEIRO--Brazil's beachfront city of Rio de Janeiro has long been a lure for tourists who are drawn to miles of beaches and a relaxed outdoor lifestyle. But perceptions about Rio are changing--as is the reality.

"The city of Rio de Janeiro has the greatest concentration of opportunities per square meter of any city in the world," said Cristiano Prado, manager of infrastructure and new business at industrial trade group Firjan.

Many of the opportunities are related to Rio's central role in the 2014 World Cup and the 2016 Summer Olympics, two of the world's biggest sporting events. The opening and final matches of the soccer tournament will be played at the famous Maracana soccer stadium, which is currently under renovation and will be just one of the venues in 2016 when Rio hosts the Olympiads.

In addition to generating billions in public-sector investment alone, these international events are helping to push Rio out from under the shadow of Sao Paulo. Although Sao Paulo is home to the country's banking sector, the stock exchange and many corporate headquarters, the two largest companies in Brazil--state oil company Petrobras and mining giant Vale--call Rio de Janeiro home. Rio is also the base for Brazil's telecommunications and media industries.

Mayor Eduardo Paes wants to use the run-up to the World Cup and Olympics as a springboard for attracting more business to the city. To that end, the mayor created Rio Negocios --a city agency designed to attract and facilitate business investment.

"Rio de Janeiro is the only Brazilian city to establish a platform to promote business," said Marcelo Haddad, executive director of Rio Negocios. The agency helps educate businesses about the changes under way in Rio while providing market intelligence and local know-how to assist in securing necessary licenses and setting up financing.

The agency also serves as a barometer of Rio's business climate, bringing to the attention of government officials any issues or challenges to investing companies encounter, Haddad said. Activity may be heating up, yet Rio still needs to overcome the negative reaction many executives and would-be investors have to the metro areas outdated infrastructure and their concerns about safety.

Brazilian companies have for years complained about aging infrastructure, with ports and rail lines unable to handle the vast amounts of agricultural products and commodities like iron ore and steel destined for export. The electrical...

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