I am thrilled to report that last Sunday, Latin America’s giant, Brazil, seems to be following in the footsteps of many other Latin American countries and shifting rightward. In the first round of Brazil's presidential election on October 4, 2026, Senator Flávio Bolsonaro finished ahead with 56,104,503 votes (47.03%), compared to 53,879,538 (45.16%) for President Luiz Inácio Lula da Silva. With 100% of polling stations counted, these are the final first-round results.
I cannot imagine a bigger political development in Latin America since Javier Milei won in Argentina. With more than 200 million people and the region's largest economy, Brazil turning right changes the game entirely, and Latin America's right-wing transformation is now unstoppable. A Flávio victory in three weeks would bring pro-market and pro-security reforms to Brazil and seal Latin America’s rightward turn.
Flávio is the eldest son of former president Jair Bolsonaro, and most major final polls had Lula ahead or the race tied. Datafolha’s final poll, conducted October 2–3, 2026, put Lula three points ahead. Brazilians went to the polls and turned it around. Once again, most of the political analysts failed to recognize the desire for change in the region. I have no doubt Flávio will finish the job on October 25, 2026, and give Brazil a great fresh start.
In this article, I will go through the first-round numbers and each candidate's platform, then explain what a right-wing Brazil means for expats and investors in the region.
Flávio carried 14 states and the Federal District, while Lula carried 12 states. He also took Minas Gerais by 48.2% to 43.3%, in a state that has backed the eventual winner of every presidential election since 1989, and I would not bet against that streak.
Our contacts in Brazil were confident the next morning: Flávio has everything he needs to keep the lead, they said, because most supporters of the other right-leaning candidates will move to him in the runoff. The arithmetic backs them up.
Ronaldo Caiado, Renan Santos and Romeu Zema all ran from the right and together took about 4.7% of the valid vote, roughly 5.6 million people. With similar turnout, Flávio needs about 3.5 million more votes to cross 50%. Lula needs close to 5.8 million votes.
That means winning over nearly all of the 3.4 million Brazilians who backed Augusto Cury, a centrist third-way candidate whose pro-business supporters are far from natural Lula allies, and then peeling off another two million votes from the right. None of the minor candidates had endorsed a finalist by Sunday night.
Brazil’s runoff is not just a contest between two candidates, but between two very different economic, security and foreign-policy directions for the country
Flávio is 45 and has represented Rio de Janeiro in the Senate since 2019. His economic program points toward a smaller state. Flávio proposes eliminating 10 ministries and cutting public spending, with a new ceiling on government spending to contain public debt. He promises lower taxes and lighter regulation. Privatization is back on the agenda too, after Lula took the postal service and other state companies off the sale list in 2023. Flávio also wants to digitize public services in order to spare foreign investors from drowning in Brazilian paperwork.
Security sits at the centre of the campaign because it sits at the centre of Brazilian life; in a Quaest survey in September 2026, 31% of voters named violence as their top concern, ahead of corruption and the economy. Flávio promised to build prisons and lengthen sentences, then send the state back into neighbourhoods controlled by criminal factions. He wants the largest factions designated as terrorist groups, and he has pointed to Bukele's El Salvador as his inspiration.
At the White House in May 2026, Flávio pledged to Trump that Brazil would join the Shield of the Americas. His trade plans go further. In a July 2026 letter to the U.S. Trade Representative, he argued that Brazil should break free of Mercosur's restrictions and negotiate with Washington on its own, citing Milei's deal as the model, with a free trade agreement and a rare-earth partnership as the prize.
He has also learned from his father's mistakes. The Centrão is the bloc of transactional parties that decides what passes in Brazil's Congress. Jair spent the first half of his term fighting it before turning to it for support, while Flávio is courting it from the start, arguing that a president without a congressional majority cannot get anything done. Investors should read that as the most important line of his campaign, because only reforms passed by Congress outlast the term of the president who proposed them.
Lula ran on the old formula of spending first and sending the bill to taxpayers later. In 2026, Lula's government announced a series of election-year measures that Folha estimated could cost about R$215 billion (roughly $41 billion USD).
Brazilians pay for that generosity through interest rates. Economists warned that fiscal expansion was working against monetary policy, and the Central Bank held its benchmark Selic rate at 15% from June 2025 to March 2026. Brazil had not seen rates that high in nearly two decades, and the Selic was still 14% in August. Market forecasts put growth at just 1.9% this year while gross public debt heads toward 83.2% of GDP.
Lula has spent the past four years trying to turn BRICS into a counterweight to Washington, including talk of trading without the U.S. dollar. When he addressed the United Nations on September 22, he told world leaders that Brazil would welcome cooperation against organized crime but refuse any “foreign intervention.”
Rarely has a runoff offered a cleaner choice. One candidate wants Brazil alongside Milei and Bukele, while the other wants it at the BRICS table with Beijing, and the winner will set Brazil's direction for the rest of the decade.
The opportunity in Brazil is not about creating something new. It is about finally letting one of the world’s most resource-rich countries perform closer to its potential
Brazil has survived decades of statism and remained a giant. It is the world's largest exporter of soybeans and coffee. Most of its electricity comes from hydropower and other renewable sources, and its offshore pre-salt fields have made it one of the world's top ten oil producers. It holds roughly an eighth of the planet's fresh water, and its population gives it the biggest domestic market in Latin America.
All this wealth is being squandered under the weight of heavy state intervention. According to recent editions of the Global Business Complexity Index by TMF Group, Brazil consistently ranks among the most complex jurisdictions in the world to do business. Although Brazil has the world's second-largest rare-earth reserves, behind only China, its mines produced only about 560 tons in 2024. This gap between Brazil's potential and its actual output is the price of a state structure that slows investment and drives up costs.
A government that cuts the paperwork and welcomes foreign capital would let Brazil's farms and mines grow at the pace their resources allow, without inventing a single new industry.
For expats, the region I keep watching is the Northeast. Fortaleza and the beaches of Ceará have drawn Brazilians from the expensive South for years, and property prices there remain lower than those in São Paulo or Rio. The irony is that the Northeast votes for Lula, who took Ceará with 63.3% on Sunday. The region's growth came from private money moving north, and a government in Brasília that welcomes that money would speed up what the market started on its own.
Back in March 2026, I wrote about Latin America's right turn and the start of the post-socialist era. Flávio's victory would carry more regional weight than his father's did in 2018 because of who would surround him. Jair governed largely alone. Flávio would take office in January 2027 with Milei and Peña next door and Washington on his side.
Brazil and Argentina make up the bulk of Mercosur's economy, yet Lula and Milei have not met bilaterally since Milei took office in December 2023. Lula even skipped the signing of the EU-Mercosur trade agreement in Asunción in January, after more than 25 years of negotiations.
When Milei signed his own trade deal with Washington, Lula's government examined whether the agreement violated the bloc's rules. Even Uruguay's leftist president, Yamandú Orsi, called in March for loosening Mercosur's rules and giving members greater flexibility to pursue trade opportunities, particularly in Asia.
With Flávio in Brasília, Mercosur's two largest members would push in the same direction for the first time in years. Expect a bloc that lets its members sign their own deals, starting with the U.S.
Brazil joining the Shield of the Americas would close one of the coalition’s biggest geographic gaps and bring South America’s largest country into the region’s emerging security bloc.
When Trump gathered 12 regional leaders at Trump National Doral on March 7, 2026, to launch the Shield of the Americas, Brazil, Mexico and Colombia were absent. Five months later, Colombia signed up. Colombia’s recently elected President De la Espriella joined on his first day in office, August 7, 2026, and named Medellín as the coalition's operational hub in Colombia. Washington then proposed a $1 billion USD security assistance package for Colombia, subject to congressional approval.
Brazil is next in line. Flávio pledged at the White House in May that Brazil would join if he wins, and he repeated the promise on September 23, 2026. That would leave Mexico as the last of the three big absentees.
Brazil borders every South American country except Chile and Ecuador. The PCC is its largest criminal faction and runs operations in neighbouring countries, Paraguay among them. If Brazil stays out, the factions pushed out of Colombia and Ecuador have the continent's largest country to regroup in. If Brazil joins, the coalition covers the continent from Bogotá to Buenos Aires.
Washington has made the Western Hemisphere its priority again. Brazil is the prize in that contest. It is a founding member of BRICS, and China is its largest trading partner. Under Lula, Brasília has also argued for trade in currencies other than the U.S. dollar.
Flávio's written platform does not mention BRICS once. It commits Brazil to resuming its bid to join the OECD, and Flávio has promised an economically pragmatic relationship with China that does not automatically align Brazil with either Beijing or Washington. What would change is the direction in which Brazil leans, and a Brazil inside the Shield and negotiating a free trade agreement with Washington would no longer serve as BRICS' anchor in the Western Hemisphere.
Rare earths show what is at stake. Brazil holds the second-largest reserves in the world after China, while China controls more than 90% of global refining capacity. In April 2026, USA Rare Earth agreed to acquire Serra Verde in a transaction valued at about $2.8 billion USD, and the deal closed in September 2026. Serra Verde is Brazil's only active ionic-clay rare-earth mine. A government that welcomes American capital into that sector would loosen China's grip on a resource every modern economy depends on.
Trade is the other front. Washington imposed additional 25% tariffs on some Brazilian goods this summer, and Lula called it interference. Flávio would negotiate as an ally, and Brazilian exporters would have a far better chance of seeing those tariffs lifted.
I kept investing in Brazil through the Lula years because I was betting on Brazil’s fundamentals, not its politics, and that bet has paid off
I kept investing in Brazil through the Lula years because I knew the country's fundamentals were strong enough to outlast socialism, and those investments paid off better than I had hoped. After Sunday, I would put Brazil at the top of any expat's watch list, and the rest of Latin America is heading the same way.
Brazilians just put a right-wing candidate in first place who promises to shrink the state, open the economy to foreign capital and take back the streets from the criminal factions.
The runoff is on October 25, 2026, and a Flávio victory would put free markets and hard security policy at the center of Latin America's largest economy. With Brazil inside the Shield of the Americas and open to foreign investors, South America's largest economy would finally stand with the pro-market, pro-security camp.
Brazil is one opportunity among many. Latin America already has established expat destinations with accessible residency programs and territorial tax systems, and the right turn is making the whole region more predictable. If you want to evaluate your options, download our free special report on Plan-B Residencies & Instant Citizenships.