Brazil has been consolidating in the technology scene as the 6th largest IT market. Not just for holding high-quality stakeholders and a mature venture community, but also for your brilliant software engineers.

With 46k IT graduates per year and 2.4k higher education institutions, Brazilian Software Engineers are on the top of the world. But how to hire them? Is the process easy or hard? Keep reading to find more!

Is hiring software engineers in Brazil a good idea?

If you are looking abroad to hire new workers, definitely hiring a software engineer in Brazil is very worthwhile

Despite the complex hiring process, Brazil is one good option especially for US employers that are in a similar time zone. Which means, is perfect for scaling product or software engineer teams in distributed and nearshore model.

Let’s see why do that and what are the obstacles to overcome:

Quality software engineers widely available

Brazil is a consistent pool of brilliant and top-level engineers losing nothing to the talents of the USA. For instance, Brazilian front-end developers are the 4th top in the world. 

Also, we’re talking about one of the lowest attrition rates in the world, reaching pay scales 40-50% lower than in the US, for a top-level engineer. 

What makes Brazilians so special? Well, there are plenty of cultural traits but some that stand out are:

  • Problem-solving ability
  • Easy-going attitude and adaptability to change 
  • Empathy with multicultural environments

A lot of compliance issues to look into

But of course, everything has its price. Hiring Brazilian engineers directly can be cumbersome. Cost and quality covered, one deal-breaker gets in the way: risk.

According to TMF Group, on average it takes 11 procedures and around 90 days of work to start a business in Brazil. Construction permits demand an average of 20 procedures and 404 days to finally get authorized. 

Besides that, you should be aware of Risks in outsourcing software development regarding recruitment. Some examples are contracts, employee entitlements, and Local Labor Laws.

PJ x CLT: key differences between both models for hiring software engineers

While in the CLT regime, employees have a fixed-term contract, legal entities (PJ)  are admitted by employers as a service provider.

CLT is the acronym for Consolidation of Labor Laws. It is the official regulation with the rules established by the government of Brazil. The laws foreseen by the CLT are valid throughout the national territory, being applied universally to all professional categories.

The professional registered as CLT has all the rights provided for in Brazilian law, such as: 13 annual salaries, 30 days of paid annual leave.

PJ is how people normally refer to legal entities. A PJ has an independent legal personality. This means that, despite being formed by Individuals, a Legal Entity is seen as its own entity before the Law and the State. No requirements that are not in a service provision contract can be made, such as face-to-face work and compliance with a specific workload, unless these are essential needs for the purpose of the provision.

There are a lot of types of PJ, such as:

  • MEI (Individual Micro entrepreneur)
  • ME – Microenterprise
  • EPP (Small Business)
  • EI (Individual Entrepreneur)
  • EIRELI (Individual Limited Liability Company)
  • Limited Company – LTDA
  • Limited Company (SA)

The three main types of corporate structures in Brazil are the limited liability partnership (sociedade limitada), the sole shareholder company (EIRELI), and the corporation (sociedade anônima). The first two require only one shareholder and the last requires at least two.

Given the complexity of the Brazilian Labor laws, the number of workers registered in accordance with the CLT regime represents less than half of the economically active population. According to IBGE, in 2011, only 46.3% of the Brazilian workforce was registered in the CLT regime.

CLT X PJ 

CLT PJ
At least a weekly break Flexible work breaks
Lunchtime Flexible lunchtime 
Minimum wage Flexible salary
Paid vacation every 12 months worked No paid vacation is mandatory
Additional unhealthy and life insurance No additional unhealthy and life insurance is mandatory
Thirteen first salary No extra salaries are mandatory
Maternity leave No maternity leave is mandatory

Entity, Contractor, PEO vs. EOR 

In order to mitigate risks in outsourcing software development, is highly recommended to business partners provide you with the knowledge that can cost you less than you expect.

Employers that are planning on entering the Brazilian market, or who want to hire a remote team in Brazil, might decide to incorporate their own entity.  With this approach, the company has a direct relationship with its local employees, which can increase accountability and ease management tasks.

Entity Contractors, PEO, and EOR are the main methods for managing distributed software engineering teams. 

Entity and Contractors

Contractors and entities generally use their own processes, tools, and methods to complete the work. They usually negotiate their own fees and working arrangements and can work for more than one client at a time.

Contractors have workplace rights and protections but have different responsibilities relating to insurance, taxation, and superannuation.

EOR and PEO

On the other hand, an Employer of Record (EOR) and Professional Employer Organization (PEO)  are solutions of third-party HR outsourcing. 

The most prominent difference would be that with PEOs you enter a co-employment relationship, which means that the people you hire are still your company’s employees. Conversely, the EOR is the legal employer of anyone you hire through them.

Talk to Ubi to quickly access the Brazilian Talent Pool

Ubiminds does tech recruitment and staff augmentation throughout the software development lifecycle based on quality-driven and focus on value delivery.

By building a Clear Strategy and Vision include Strong leadership, Diversity, Inclusion and Collaborative Environment drived by overcommunication and holding a smart talent acquisition and onboarding to get the right people, Ubiminds  saves you 40-50% on cost-per-hire and maintain an average talent retention at almost 3 years.

Because of Ubiminds high-level method and considering the satisfaction of his clients, Clutch considers it a top company. The business-to-business (B2B) review platform revealed Ubiminds is one of the top HR firms on their platform. 

How Ubiminds is different

Two purple squares with a circle in between. The circle is turquoise and has Ubiminds' logo in it.

Instead of being a traditional firm, Ubiminds solves issues by keeping payroll expenses and benefits as its responsibility, dedicating tech recruiters for the hiring process, and taking care about all the process: from paperwork and bureaucracy in Brazil contractors to travel visas and office space and equipment.

Ubiminds Benefits and Advantages includes:

  • Developed by CTOs for CTOs

Sourcing and recruitment are made by tech recruiters and in specialized Sources for talent pools in Brazil. Ubiminds filters out 99.5% of candidates, selecting only seniors.

  • Protect customers and Engineers

Ubiminds allows you to hire nearshore without the need to establish an entity in Brazil. Yes, it is convenient. But more important, it is beneficial in terms of accountability and compliance. By mitigating risks in outsourcing software development, it protects companies and professionals alike.

  • Offer continued support well after the hire

By guaranteeing assistance even after onboarding, it is possible to guarantee more satisfied teams and talents. Monitoring and communication go together and are vital for everyone to be on the same page. So the talents remain for a longer time in the distributed teams.

  • Exclusive benefits to expand capabilities and competencies: mentorships, coaching, English lessons, Ubitalks, sponsorships, visa support

Ubiminds goes further to ensure a complete experience for the employer and the software engineer who will be part of a distributed team. Everything is covered by Ubiminds (find out more here).