With its 8000 km of coastline, tropical white sand beaches lined by palm trees, most of them deserted, the Brazilian music and dance, the country has outstanding potential to be a major tourist destination. Until a few years ago, the tourism sector was jeopardized by the limited development of infrastructure and the lack of foreign promotion policy and constant planning for the development of different tourist destinations.

The tourism sector is now a top priority in the government's agenda. When the new government took office in 2003, they created the Ministry of Tourism (which did not exist before) and they have already more than doubled the number of international events and fairs promoting tourism in Brazil .

The number of international tourists visiting Brazil has increased the last years from 3,7 million in 2002, to 5,5 million in 2005 ( 48% increase) . To put things in perspective, last year tiny Puerto Rico was visited by a little bit more than 3 million tourists. Brazil being the 5th biggest country in the world, it clearly shows that international tourism in Brazil has huge potential for further development.

Main reasons are the near perfect climate and the numerous semi-virgin beaches along its beautiful coastline. The weather in the North East is the best in the entire country with a yearly average temperature of 27 degrees and is stable and sunny virtually all year around .

The major tour operators have now realized Brazil 's tourism potential and are fast adding Brazil to their offer. Thomson Holidays added Brazil to their offer at the beginning of this year and according to Thomson, it's the amazing beaches and the vibrant culture of music, food and drinks that makes the Northeast of Brazil such an attractive tourist destination. International groups are investing billions in new hotels and resorts in the northeast of Brazil .

Even though the Northeast of Brazil is considered an emerging tourist destination for foreigners, it does not mean that tourism is a something new in this part of the world. Brazil has a population of approx. 180 million people and when Brazilians plan their holidays, they don't have to look any further than their own border and they usually head to the Northeast.

As a result of this, Brazilian tourists have been coming to the Northeast for decades and there is a waste range of tourist attractions at hand. Activities range from beach buggy tours along the beautiful nearly deserted beaches, diving and snorkeling, visiting historical sites and last but least, a very exciting night life.

Natal, located at the extreme Northeast tip of Brazil is the part of Brazil which is closest to Europe. Natal is the state capital of Rio Grande Do Norte and has a population of almost 800.000 people. This region of Brazil is famous for its near perfect climate with an average yearly temperature of 27 ºC where the sun shines virtually all year and the stunning coastline consists of never ending beaches lined with coconut trees, lagoons and sand dunes.

The nickname of Natal is to no surprise- The city of the Sun and is visited all year by thousands of tourists, domestic and foreign, looking for sun and beach and has established itself as the leading beach tourism destination in Brazil. Natal is a peaceful city while at the same time being a modern one with shopping malls, bars and restaurants offering international level cuisine and facilities that put it on a par with any Brazilian capital.

Its main attraction is its coastline, with over 400km of beaches, dunes and small pieces of paradise. Natal is also the safest state capital in Brazil and in addition, according to the research done by NASA, Natal has the purest air on the continent and second purest in the world, loosing only to Antartica!!

The first foreign charter tourists that arrived in Natal where the Portuguese, Spanish and Scandinavians. Many tourists come to enjoy the city's beauty and excellent climate, and like it so much that they decide to invest in houses, apartments and hotels. The environment in Natal is perfect for investment: convenience, beautiful attractions, lovely beaches and the charm of a cosmopolitan city, which combines modernity and tranquility in a natural way.

In recent decades, tourism has become the main activity in Natal . The local government has been very active in promoting and supporting tourism and the area has seen massive investments in improving the infrastructure.

In the coming years more than ten golf courses will be developed in the area and more than $1,8 billion will be invested in new hotels and resorts. Due to the booming tourism and enormous potential for further growth , the government has decided to build a new airport in Natal which will be the biggest airport in South America (will be 8 th biggest in the world) and is due to be ready by June 2009.

This will further confirm Natal´s position as the number 1 tourist location in Brazil.

Natal is already well connected to many of Europe's major cities and receives direct flights from many European cities such as Lisbon , Madrid , Barcelona , Milan , Amsterdam , Oslo , Stockholm and Helsinki.

Earlier this year, Thomson Holidays started weekly direct charter flights from the London to Brazil , and to no surprise the chosen location was Natal . At present travel time to Natal from London is approximately 9 hours 15 minutes. From Lisbon the flying time is 6 hours 55 minutes. In 2002, The state of Rio Grande do Norte ( Natal is the state capital) received 147.000 foreign tourists. In 2005 this number was 344.000, an increase of 134% . For the same time period, the increase of foreign tourism in Brazil was 48%, which clearly shows that Natal is the area leading the boom in tourism.

As stated before, domestic tourism is also strong in the northeast of Brazil . In January 2005, Natal received, 197 domestic charter flights, more than six per day and for the whole year more than 1,7 million domestic tourists arrived in the state of Rio Grande do Norte.

A Brief History of Natal
The State of Rio Grande do Norte, one of the smallest in Brazil , takes part in Brazilian history since the beginning of Portuguese settlement. In order to conquer and establish a settlement in the Captainship of Rio Grande, its tenants organized an expedition, which left Lisbon on November of 1535.

The outcome was a thorough failure; the ships sank after a struggle against local Indians and their allies, the French. A second expedition was made, likewise falling through. This way, the Captainship of Rio Grande remained neglected for many years. Taking advantage of this situation, foreign invaders, especially the French, made alliances with the Indians and started commercializing the pau-brazil wood, very appreciated in that age and extracted from a kind of tree very common on Rio Grande coastline. This situation endured for almost 50 years. Meanwhile, the king of Spain , Philip the Second, was crowned king of Portugal , causing the lost of political independence of Portugal and its colonies, among them Brazil , as well as a greater effort to reconquer them.

Therefore, the king ordered the General Governor of Brazil , D. Francisco de Souza, and the governors of the Pernambuco and Paraíba Captainships, to organize an expedition and take over the lands of Rio Grande. He also wanted them to establish a city and a fortress for its defense. A conquest expedition was organized, leaded by Mascarenhas Homem, governor of Pernambuco, and Feliciano Coelho, governor of Paraíba. The Portuguese settlers succeeded and started building a fortress, called Fortress of The Three Wise Kings, because its construction began on January 6 th of 1598.

In order to go through with the king's recommendations, Jerônimo the Albuquerque still had to establish a city. Historical evidences point out to December 25 th of 1599 the date of Natal foundation , whose initial mark was settled in where nowadays is located the André de Albuquerque Square . The capital of Rio Grande do Norte State received the name Natal due to the date the Christian world celebrates Jesus Christ's birthday.

In December 12th of 1633, in order to not disrupt Brazilian's sugar supply to them, the Dutch invaded and conquered the Fortress of The Three Wise Kings. The Fortress received the name of Keulen Castle , and Natal was called New Amsterdam by the Dutch invaders. After a period full of conflicts, violence and death which caused a complete delay to the settlement process, the Dutch were finally thrown out on January 25th of 1654 after a domination that lasted for almost 20 years.

After the sugar cane period, Brazil entered the gold period, during the 18th and 19th centuries, which brought little benefit to Rio Grande do Norte. The Brazilian government moved more and more towards the south and center of the country. For this reason, the Natal region, unlike others, did not feel that it was a colony of a metropolis; this fact (together with the American presence during the Second World War, see below) probably contributed towards making Natal one of the most liberal regions in Brazil .

It was the first state to abolish slavery, ten years before the rest of the country; and the first Brazilian woman to be elected mayor governed Lajes, a city close to Natal . At the start of the 19th century, Natal was still a small town. It was only in 1922, during the Pedro Velho government, that the city started to modernize. In 1930, after the victory of the Liberal Alliance (which fought against the dominance of the States of São Paulo and Minas Gerais), did Natal enter a period of rapid urbanization.

During the Second World War, Natal underwent rapid changes in its lifestyle, when Parnamirim airport was used to house a military base, in view of its strategic position for serving the Allied troops based in North Africa . Thanks to this base, thousands of American soldiers spent the war years in Natal . As well as bringing new products, (Natal was the first Brazilian city to discover chewing gum) their democratic outlook and freedoms had an influence which can still be seen in the Natal lifestyle today.

After the war, a lot of its wealth came from exports through the port; the main products produced in the state were scheelite (a tungsten ore), cotton and carnauba wax. Other products which are relevant to the economy of Rio Grande do Norte are salt (the state is the largest salt producer in Brazil ) and, in recent decades, oil (no other state produces as much on-land oil as Rio Grande do Norte) plus, of course, tourism.

As with all emerging markets, the earlier you invest, the greater your profit potential. Defining moments and timing are always the catalyst for any real estate opportunity and when investing in an emerging market, timing is of even greater importance. If one picks the right time to invest in an emerging market, there can be significant capital growth. Pick the wrong time, however, and you may be taking on all the risk in return for little of the reward.

The property market in Natal is in its infancy stage. The coastline around Natal is development free and the last years most of the land has been sold to developers and is now ready to be built upon. Most of the infrastructure has yet to come into place.

The coastline around Natal bares many similarities to how the Spanish Costa del Sol was 30 years ago. Once charter tourists started arriving in Spain and became aware of the lifestyle the area offered, the area started to change and consequently the price level as well. Today Costa del Sol is the leading tourist destination in Europe and the general price level reflects this as well.

Investors in the Northeast of Brazil can acquire beautiful properties in stunning surroundings, at prices simply unobtainable in most other destinations. For investors buying for a pure investment, as well as for those who want to buy a dream property in a stunning location for an extremely attractive price.

Maracajau's never ending beaches with crystalline water, sea-front coconut groves, sand dunes with white sand and a large coral formation a few kilometers from the coastline occupying more than 13km², the biggest coral reef in Brazil, makes it place of stunning natural beauty. Thanks to the extensive coral reefs Maracajaú has become a divers paradise and not surprisingly, is also known as the “Caribbean of Brazil”.

An excellent lodging and restaurant structure is already in place to unite peace and tranquility with comfort. Present activities range from horse riding, water sports, exciting daytrips in beach buggies along the coastline, fishing or simply relaxing on the beach.

This idyllic fishing village and the climate with its constant breeze and dry, equatorial trade winds, the people, the food and the low prices, all this makes Maracajaú the perfect place to relax. However, if you want more “action”, in a little over 30 minutes you can arrive in neighboring Natal with 800.000 inhabitants and all the modern facilities and nightlife you can wish for.

The environmental norms are very strict and as such, the authorities are very strict when it comes to granting building permissions. This will guarantee that the area remains a low density area.

Your Questions Answered

Will the property be freehold?
Investing in real estate in Brazil is as safe and easy as in any modern country like the USA or Europe . There are no restrictions for foreigners buying property and ownership is solid and secure; you own 100 % of land and property. All property sales are titled and foreign investors receive the same investment and possession rights as Brazilians.

What's the next step?
For a foreign investor to buy real estate in Brazil the only requirement is that they have a CPF number - which is like a social security number. The number can be obtained within a couple of days and is a legal requirement as it enables the investor to be uniquely identified for taxation and title purposes. This is only needed at completion and the lawyer will assist you. The whole process can be done without visiting the country, providing that power of attorney is given to the lawyer.

The Brazilian government has sophisticated and well developed real estate laws which protect the property owner whether they are a foreign or local owner and legal assistance should be sought for the entire purchase process to ensure the investor's rights are properly looked after.

Next, a sales contract is drawn up which details the full conditions of the sale and also acts as a receipt for the deposit paid.  Assuming the purchaser already has the CPF number and notarized copies of their passport etc., the sales contract can be signed either in person by the buyer or by the lawyer acting for the purchaser if they have been given power of attorney. The title transfers can take a couple of weeks to be recorded.

Do I need a lawyer?
We recommend that you use a lawyer. We will introduce you to a lawyer based in Natal . It is important that the lawyer is local, since the laws differ between the different municipalities. The law office we work with, has a very good reputation locally and represent many of the big local companies.

What other costs can I expect?
You can expect to pay approx. 7-9% in purchasing expenses as follows:

• ITIV (similar to VAT): approx. 3,5%
• Title Deed(cost for the Notary office) : approx. 1,25%
• Registration of the deeds: 0,75%
• Legal fees: approx. 2%

If you add up these costs, you'll come close to 7%. The reason we mention 7-9% is that in Brazil an additional tax is charged for federal land (this tax is finally calculated on completion).

What running cost can I expect?
We estimate a monthly community fee between 50-100 euros depending on the size of the property. We have arrived at this number by researching other similar developments in Brazil and this number ought to be very close to the actual number.

The annual real estate tax is 0,6%, but this tax is based on a value far inferior to the value of the property, i.e. the tax is minimal.

What about Tax on profits?
Income earned from property in Brazil is taxable whether the investor is resident or non-resident in Brazil . Non-residents are usually subject to a capital gains tax rate of 15% on any gains they make on properties in Brazil but both these taxation facts are subject to alteration depending on any double taxation treaties in place between Brazil and the investor's country of residence.

Is my money safe? - Investor's guarantee
The developer has a bank guarantee in place, which means any money paid to the builder is fully insured and it's guaranteed the building will be finished. This bank guarantee virtually eliminates any financial risk to the investor.

Is Brazil a safe country?
One of the urban myths that surround Brazil is the question of safety and security. In fact, Brazil is no more dangerous than the main cities in Europe or North America .

Most of the bad press about violence in Brazil , relates to the gangs operating in the slums in Rio and Sao Paulo , which are both several hours away by plane. Even in these mega cities, most of the crime is between the gangs and crime against tourists is extremely rare. Being sensible and streetwise is the key to trouble free and enjoyable stay anywhere in the world, including Brazil .

The northeast is well known for being a very safe and relaxed area. In addition, Natal is officially considered the safest state capital in Brazil . In Maracajaú, the crime rate drops to virtually zero. The locals sleep with their doors unlocked.

Brazilians are further known to be very friendly people and it is extremely rare to see aggressive behavior from the Brazilians. In fact, what you will see more than anywhere else in the world is a lot of smiling and dancing!

What's the climate like?
Since Natal is only 5 degrees from the equator, the seasonal variations are very small. Most of the year the day temperature is around 30 degrees and the night temperature rarely falls below 24 degrees. The annual average temperature is approx 27 degrees (includes day & night temperatures).

In Natal , April to June is considered “rainy season” and during this period it rains intensely for a few hours after which the sun comes out again. Even during this time, the temperature never drops below 24 degrees. The rest of the year is very sunny and the climate is dry and there is always a refreshing tropical breeze from the sea which makes the temperature feel even more pleasant.

The sea water temperature is equally warm and is approx. 26 degrees all year.

Further, Brazil does not suffer from any tropical storms, hurricanes or earthquakes. No wonder Brazilians say that the country was created by God!!!

Can I get a mortgage on a Brazilian property?
Currently foreigners can not get a Brazilian mortgage. If needed, it is better to organize finance from one's home country.

 What about rental potential?
This area around Natal is a sought after holiday destination and is increasing in popularity at a fast rate. The rental market is all year round and with golfing opportunities coming, the rental market (along with increased rental prices) will grow rapidly.

The first project that was completed in Maracajaú, is already working with tour operators. Due to the very attractive property prices, the potential for high digit future rental yield is very good.

What can I expect to pay for food & drinks?

A few examples:

• Dinner for two in a good restaurant: approx. 8 euros
• A beer (600 ml): 75 cents
• Caipirinha (the famous Brazilian cocktail with lime, cachaça &crushed ice: 1 Euro
• Chicken & prawn skewer on the beach: 40 cents

10 Good Reasons to buy a property in the Northeast of Brazil

In conclusion, all indicators show a huge potential for this sector in Brazil and if you are an investor or just someone looking for a second home, Brazil is the place to look for it and the time is now.

Let us guide you all the way investing in this truly remarkable destination which is set to boom for several years to come.