Differences between IPOs in Brazil and the United States

Do you know the differences between IPOs in Brazil and the United States? We’ll cover the subject in this article.

The IPO, or Initial Public Offering, is the process by which a company issues shares on the market for the first time, becoming a publicly traded company. This means that its shares are publicly traded on the stock exchange.

The main reason companies go public is to raise funds to develop and invest in their business.

In Brazil, the IPO process is regulated by the CVM, the Securities and Exchange Commission. Companies need to follow a series of requirements and adjust their financial and administrative structure to increase their levels of governance.

In the Brazilian context, bureaucracy is a major challenge for companies. The IPO process in the country is complex and can take around a year to complete.

In addition, the cost of the IPO can be substantial, not to mention the ongoing expenses after listing on the stock exchange. However, despite these challenges, having shares traded on the market can offer attractive returns, especially for companies looking to make new investments.

Image: Canva

Other differences between IPOs in Brazil and the United States

In the United States, the process is regulated by the SEC, the Securities and Exchange Commission. Companies can choose between several stock exchanges, the best known being the NYSE or NASDAQ.

One of the other differences between IPOs in Brazil and the United States is that on American soil, the IPO market is known for its agility and the presence of institutional and retail investors.

Brazilian companies that choose to go public in the United States are not only looking to increase their global presence, but also to strengthen their ability to raise capital.

According to information from 2023, the United States holds almost 59% of the total market capitalization globally. This means that more than half of the world’s market value is associated with the North American market.

Despite the differences, both in Brazil and the US, the IPO is an exciting opportunity for companies and investors.

Do you have any questions on the subject or want to internationalize to the US? Get in touch with us via the available chat or email info@drummondadvisors.com.


Written by Marcos Ferreira, Content Analyst at Drummond Advisors

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