Almost a year after it first entered the Brazilian smartphone market, Xiaomi is now changing its plans. While the company will continue to partially sell its phones in Brazil, it will be reducing its employees there and consolidating them back to its HQ in Beijing.

Xiaomi even has a factory in Brazil where it manufactures the Redmi 2 smartphones sold in the country.

There are other reasons as to why Xiaomi is pulling out of Brazil as well. Hugo Barra, Xiaomi’s global VP, said in an interview that the various policies pertaining to sales tax and production have made it difficult to conduct business in the world’s fourth-largest smartphone market.

“With the constant changes in manufacturing rules and tax regulations in Brazil since end 2015 and the fact that the rules are not yet solidified, Xiaomi has chosen not to launch any new products in Brazil in the short term. However, we are continuing to monitor the regulations and will plan new product releases at the appropriate time,” a spokesperson told Tech in Asia.

The company will continue to sell the Redmi 2 in the country through certain ecommerce players and provide customer and technical support for it. However, the company’s social media and marketing team from Brazil will be going back to Beijing.

The Brazilian market has always been less-than-welcoming to foreign players. The country had shown signs of development, but in the last year or so, its economy has crumbled and it is currently going through a political crisis.