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Key takeaways
- Flávio Bolsonaro enters the 25 October presidential run-off ahead of Lula, supported by a stronger conservative wave. The presidency remains contested, but the institutional environment facing the winner has already changed.
- The Liberal Party (PL) will hold 28 of the Senate’s 81 seats. Its potential allies could deliver an absolute majority, while the centre and centre-right remain essential to broader coalitions and decisions requiring qualified majorities.
- Two political calendars now matter for business: decisions by the outgoing Congress before 1 February 2027, and the allocation of parliamentary leadership and regulatory influence after the new legislature takes office.
- Trade relationships, extractive investment, digital infrastructure and social policy will depend on the interaction between presidential priorities, parliamentary bargaining and institutional constraints. A conservative majority does not guarantee fiscal restraint or regulatory certainty.
An electoral advantage with important limits
Brazil’s election on 4 October leaves businesses facing a competitive presidential run-off and a more conservative political environment. Senator Flávio Bolsonaro received 47.03% of valid votes against 45.16% for President Luiz Inácio Lula da Silva, a lead of approximately 2.2 million votes. The decisive ballot is on 25 October. Lula, aged 80, is serving his third term and seeking a fourth. Bolsonaro is the son of former president Jair Bolsonaro, under house arrest following conviction for offences including an attempted coup (here, Bolsonaro refers to Flávio).
Bolsonaro enters the run-off with an advantage, but mobilisation and transfers from other candidates remain decisive. Conservative gains would give him a more favourable governing environment and constrain a re-elected Lula. Neither outcome guarantees regulatory certainty: both presidents would need parliamentary agreements, credible financing and effective implementation.
The Senate changes the balance of power
The new legislature begins on 1 February 2027, creating an immediate window for difficult votes. Outgoing legislators who lost their seats or are moving to other offices may be less sensitive to electoral pressure and more receptive to compromises. Decisions on betting, the budget and working hours could shape the next administration before it begins. Companies should engage now while preparing for new congressional leadership and regulatory appointments.
Congress comprises 513 deputies and 81 senators. All Chamber seats and 54 Senate seats were contested. Bolsonaro’s Liberal Party hold 28 Senate seats, against nine for Lula’s Workers’ Party; centre and centre-right parties remain essential to broader majorities. Conservative strength in São Paulo and Minas Gerais, alongside Lula’s north-eastern strongholds, also matters: governors across 26 states and the Federal District influence licensing, infrastructure, procurement and taxation.
For Lula, this could make the Senate a powerful constraint on the exercise of presidential authority. An opposition coalition able to withhold consent could block his choices for the Supreme Federal Court, Brazil’s highest court, and challenge diplomatic or regulatory appointments requiring Senate approval. Bolsonaro would approach those same decisions from a more favourable position, with allies capable of helping him secure confirmations. In either case, appointments would become part of the wider bargain over government priorities, giving senators influence over institutions whose decisions shape the business environment. Constitutional amendments require higher thresholds: 49 senators and 308 deputies in two rounds in each chamber. The centre’s bargaining power grows as an initiative moves from ordinary legislation to institutional change.
International agenda: US, China, Mercosur, the EU and the BRICS
Lula would favour diplomatic diversification, preserving Chinese trade and investment alongside US engagement. Bolsonaro would lean towards Washington, potentially opening opportunities in strategic supply chains while increasing scrutiny of Chinese-linked assets. Exporters and manufacturers would still press to preserve Chinese demand, finance and equipment. Companies should assess exposure by project and supplier: political alignment may change commercial opportunities without producing wholesale economic disengagement.
Bolsonaro could seek greater flexibility within Mercosur while supporting commercial opening. Disputes over European environmental requirements could complicate delivery under either president. Exporters should assess phased tariffs, origin rules and sanitary requirements against binding obligations rather than political rhetoric.
Regarding the BRICS, Lula would sustain engagement with the grouping originally established by Brazil, Russia, India, China and South Africa, preserving cooperation and development-finance opportunities. Bolsonaro could give it less diplomatic emphasis as US ties strengthen; withdrawal is not an established commitment. Businesses should distinguish changing political sponsorship from existing obligations and assess project eligibility and sanctions exposure individually.
Online betting and the scope for a negotiated reopening
Online betting could become an early test of the outgoing Congress’s willingness to negotiate politically difficult compromises. On 25 September, Lula issued a medida provisória (MP), or provisional measure, prohibiting fixed-odds betting operations, intermediation and advertising. This presidential instrument takes immediate legal effect but requires congressional approval to become permanent law. With Datafolha reporting 78% support for prohibition, Bolsonaro would struggle to advocate reopening without credible safeguards against indebtedness and gambling-related harm. Yet outgoing legislators, facing less immediate electoral pressure, may be more receptive to arguments about employment, tax receipts, sports financing and the displacement of users towards illegal operators. Lula’s first-round setback could weaken his ability to resist a narrower framework, although he retains veto powers and a popular case for prohibition. For operators, payment providers, advertisers and sponsors, the immediate priority is therefore the parliamentary negotiation, where a more restrictive but commercially viable model could still emerge.
Energy and mining under competing trade strategies
Energy and mining connect Brazil’s domestic regulatory choices with its international positioning. Lula would be expected to combine energy-transition investment and continued hydrocarbon production with incentives for domestic mineral processing; Bolsonaro would place greater emphasis on faster licensing and international capital. A more conservative Congress could help Bolsonaro simplify permitting or push Lula towards further concessions, but faster approvals will only translate into investment if environmental assessments, land rights and community engagement withstand legal scrutiny. Trade policy could be equally consequential: closer alignment with Washington may open opportunities for critical minerals in supply chains seeking alternatives to China, while friction with Beijing could affect export demand, financing and access to equipment. Lula’s diplomatic diversification would seek to preserve a wider range of partnerships. Companies should assess licensing and trade exposure together, since changes in buyers, technology and financing can reshape project economics as much as domestic authorisation.
Data centres and the constraints behind investment incentives
Both candidates support digital infrastructure. Lula’s Redata tax regime provides an existing framework tied to domestic services and research; Bolsonaro could favour simpler authorisation and stronger international investment attraction. Changes would require appropriate legal action. Grid connections, electricity prices, water access and local permits remain decisive, while restrictions on advanced computing equipment and scrutiny of Chinese suppliers could reshape sourcing. Investment incentives should be assessed alongside these delivery constraints.
Culture wars and the pressures on a Bolsonaro government
A Bolsonaro government would face evangelical and conservative pressure over same-sex marriage, women’s protections in Civil Code reform, vaccination, affirmative-action quotas and public university funding. Demands for amnesty for those convicted over the attempted coup could intensify conflict with courts. Lula would be more inclined to defend inclusion and public research. Constitutional safeguards constrain changes, but disputes could affect employee benefits, recruitment, academic partnerships and corporate reputation, while diverting attention from economic legislation.
Biotechnology and healthcare
Lula would emphasise public access and domestic capacity; Bolsonaro could favour simpler procedures and private-provider participation in SUS, Brazil’s tax-funded universal health service. Conservative ethical debates may influence confidence and funding, but gene therapies, embryo research and heritable editing raise distinct questions; Bolsonaro’s programme includes immunisation. For pharmaceutical and biotechnology companies, technical authorisation, procurement, reimbursement and affordability remain separate hurdles, with fiscal capacity limiting opportunities under either administration.
What executives should monitor next
Companies should now follow two linked tracks. The first is the run-off and the coalition that its winner can assemble. The second is the outgoing Congress, where decisions on betting, the budget and other difficult measures could shape the business environment before that coalition takes office. Tracking who is sponsoring an initiative, when it may be voted on and which parliamentary leaders can advance it will be essential to identifying the real window for engagement.
From February, leadership and regulatory appointments will show how far the election’s conservative shift translates into governing power. Bolsonaro would begin with a more favourable institutional position; Lula would have to invest more political capital in protecting and adapting his programme. Both would still need to fund their commitments and secure cooperation across federal and state institutions. For executives, the task is to connect those political negotiations to the decisions that determine market access, project delivery and long-term confidence.
SEC Newgate has maintained its own operation in Brazil since 2024, helping companies understand the forces shaping policy and build effective institutional relationships. We bring together political and regulatory intelligence, public affairs, stakeholder engagement and strategic communications to anticipate change and translate it into practical choices for business. With local expertise and an international network, we support established operators and new entrants in engaging with government, Congress, regulators and wider society, aligning their commercial strategy and reputation with Brazil’s evolving priorities.