In the early 1980s, several authors studied the internationalization of companies from emerging countries (Lall, 1983; Wells, 1983), which contradicted the prevailing theories. Currently, this curiosity has been renewed and explained by the leadership attained by some of these companies in their industries. An important issue is how the study of these companies can contribute to the theories of international business. Some authors argue that new theories are needed to explain this phenomenon (Guillén and Garcia-Canal, 2009, Luo and Tung, 2007; Mathews, 2006), since traditional theories were developed in central countries, between the 1960’s and 1980’s, by observing the expansion of companies from these to other developed countries  (Dunning, 1980, 1988, Johanson and Vahlne, 1977), and did not take into account the countries’ context. Another group of academics sees emerging markets’ multinationals as any other MNCs, so their behavior can be adequately explained by traditional theories (Dunning, Kim and Park, 2008). And a third group suggests that local institutional environment is crucial to explain the success of some of these companies.

In Brazil, the strategy of import substitution and economic liberalization encouraged and enabled companies to increase their skills to become multinationals. Through an initial technology transfer process of licensing and alliances, followed by endogenous learning, firms improved their capacity and later started acquiring firms in developed countries to further enhance their technological capabilities.

But Brazilian institutions do not work properly, and hinder companies' performance, giving rise to informal arrangements that seek to overcome the difficulties imposed by bureaucracy, poor infrastructure, patronage, corruption, unstable economic environment, and high taxes, which Khanna and Palepu (2006) and Luo and Tung (2007) named as institutional voids. These deficiencies also drove companies to other countries, including tax havens, as an escape response. Peculiar governance structures, based on family groups, allowed some companies to compensate for institutional voids (Khanna and Rivkin, 2001), through support of the group, besides having privileged interaction with the government, which makes operations easier. Individual social networks also have a key role, leading to the capitalism of ties or network capitalism mentioned by Lazzarini (2011).

Two factors motivate Brazilian companies to internationalize. The first is the pull of opportunities in international markets to which they are able to respond, after the implementation of pro-market reforms. Once local firms learned to serve more demanding domestic consumers, some of them reached a level of sophistication in capabilities that enabled them to become multinationals and invest abroad. The second factor is the push of severe institutional deficiencies at home that stimulate companies to go abroad.

The objective of this paper is to discuss the contradiction between the explicit purpose of the government in supporting the internationalization of domestic companies, through financing, incentives and focused support to a small group - the national champions - and its passive attitude in maintaining an unfavorable institutional environment that poses difficulties to all other companies.

Methods consist of bibliographic and documental research, and descriptive quantitative analyses to support the discussion. Based on preliminary results from a database of 150 Brazilian multinationals, we show that most Brazilian companies chose Latin America as first destination, with a preference for Argentina, Uruguay and Paraguay. These findings led us to suggest that firms choose host countries with lower geographic, economic and, especially, lower institutional distance. This argument must be evidenced by a future survey with companies in the database. Also, domestic institutional voids must be thoroughly identified and taken into consideration as a relevant variable in the internationalization process of Brazilian companies.