As the largest city in one of the world’s most promising economies, not to mention the largest city in the southern hemisphere, São Paulo in Brazil is certainly generating interest among real-estate investors.

With an estimated 20 million inhabitants in its metropolitan area, there is a huge amount of demand for housing, both for purchase and rent, not to mention large demand for office space for the numerous domestic and multinational corporations that have identified the city as a key location for their business.

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Foreigner complications

Foreigners are permitted to buy real estate in the country, but must first be registered with the General Register of Corporate or Individual Taxpayers (otherwise known as the CNPJ or CPF). There is a string of other regulations on foreign investors, which has prompted many to opt for investing via a more straightforward investment fund. But capital gains from these investments are still subject to a tax of up to 20%.

Yet the city’s genial mayor, Gilberto Kassab, is not concerned that the regulations are too strict or that property prices might be getting overheated. He acknowledges that the cost of living has gone up, but real estate in his opinion is still fair value.

Speaking to fDi Magazine at the Mipim property conference, he says: “I know the rules are a little stricter, but at the same time they are clear so it is a good thing. But there are still a lot of foreigners who are interested in Brazil and São Paulo and our projects and initiatives going on there. Some have been hurt by the exchange rate, but I believe investors are still satisfied with their experience here.”

Pro-democracy, anti-billboard

Mr Kassab was elected in 2006 and has two years left in his term. His tenure has been marked by his controversial Cidade Limpa law, which strictly prohibits all forms of external media, namely billboards. Referring to them as “visual pollution”, he has been harshly criticised by the advertising industry, but has remained relatively popular among the public.

A Brazilian of Lebanese descent, the mayor has perhaps a closer connection to the current events in the Middle East and north Africa, and is sharp in his criticism of the governments of the region.

He says: “I believe in democracy and those who don’t believe in it in this era will not be able to stay in power. Ultimately the will of the people will prevail. I also believe in a rapid transition to democracy for those countries who need it.”

Urban development projects

For the remainder of his term, Mr Kassab says he would like to see the completion of his urban development projects, such as the Nova Luz downtown renovation, as well as improvement of the city’s basic infrastructure.

He also says he would like to continue in public service, but did not say if that meant running for another term as mayor, or perhaps aiming for a larger role with the government. Before becoming mayor he was involved with the São Paulo municipality.

But as mayor of the country’s commercial and financial hub he could be well placed to move up. His predecessor José Serra ran for president in 2002, but lost to the eventual president Luiz Inácio Lula da Silva in a run-off.