In a pioneering move among top Brazilian firms, Pinheiro Neto Advogados is deepening its long-term relationship with Japanese clients by opening an office in Japan, which is one of the main sources of foreign direct investment in Brazil.
The firm inaugurated the office, located in Tokyo's business hub Marunouchi, on 7 December. It will be led by banking lawyer Yuka Ono, who is becoming partner in January.
Ono has significant experience in Tokyo having worked as a financial advisor for Credit Suisse, Morgan Stanley and Mizuho Bank. She also worked as a visiting attorney at Japanese firm Nagashima Ohno & Tsunematsu. Ono will be the only partner based in the new office, but other partners will travel frequently to Japan to meet with clients there.
Pinheiro Neto's relationships with Japanese clients started in the 1970s, when the firm helped a vehicle parts manufacturer and a steel company start their businesses in Brazil. Today the firm represents Japanese clients across multiple sectors, including manufacturing, financial services and pharmaceuticals.
Pinheiro Neto managing partner Alexandre Bertoldi was in Tokyo for the office's inauguration ceremony. He says the firm intends to expand its network of clients in the country, at a time when many in Japan are looking for opportunities outside Asia's competitive market. "This has a great potential because Japanese companies are in search for new markets and they have their eyes on what is happening in Brazil," he says.
Bertoldi told Latin Lawyer there are important cultural challenges that go beyond language when it comes to making Japanese clients comfortable investing in Brazil. Brazilian businesses and the country's legal complexities can be difficult for foreign investors to translate and navigate. Meanwhile, Japan's business culture can be hard for Brazilians to grasp. "Bridging these gaps is key to establishing a trusted relationship," he says.
Ono's practice was central to Pinheiro Neto's decision to establish a permanent presence in Japan. Her work for several financial institutions in Tokyo has given her an inside perspective of Japanese companies and the market as a whole. "We will try to bridge the cultural gap by providing services in all legal matters in Japanese," she says. "We can anticipate their necessities by speaking the language and by putting ourselves in the client's shoes," she says.
Tokyo and São Paulo are some 11,000 miles apart and have a 12-hour time difference. Even so, business between the two cities is substantial. Japan is only behind China and the US when it comes to foreign direct investment in Brazil. According to Brazilian government figures, from 2003 to 2019 Japanese investments reached a total value of US$37 billion, which was directed at 317 different projects.
Investments show no sign of receding. Japan-led foreign investment in Brazil reached US$1 billion in the third quarter of 2019. Although manufacturing and mining continue to be Japanese companies' main targets in the country, investments in services are also increasing. The role of Japan's SoftBank in this trend is significant. In November it invested US$140 million in e-commerce platform VTEX. Prior to that, it invested another US$250 million in real estate rental platform QuintoAndar. Japanese manufacturer Toyota, which is investing a further US$242 million in its Sorocaba facility, also contributed to recent figures. Mitsui, which bought a railroad concessionaire from Odebrecht in Rio in June, and motor manufacturer Nidec, which concluded its acquisition of Embraco in May, are also examples of recent Japanese investments.
The bilateral trade relationship between both countries is solid too. In 2019, Japan was the fifth-largest destination for Brazil's exports, totalling US$4.7 billion by November. Mining products, corn and meat top the list of Brazilian exports to the country, while Japan sends vehicles and machines to Brazil. Imports from Japan have added up to almost US$1 billion so far in 2019.
Despite all the trade, Tokyo is not a common hub for Brazilian firms. The majority of Latin Lawyer Elite firms maintain offices in New York. Pinheiro Neto's office in the Japanese capital is pioneering among Brazil's full-service firms. This is Pinheiro Neto's second office abroad. Last year, it opened in the Silicon Valley.