In the minds of many Finns in the early 20th century, “Tropical Fever” was not an illness, but the cure. It was the idea that warmer, less developed, more natural places were the healthiest in the world. It was with this in mind that Toivo Uuskallio travelled with his family to Brazil in the late 1920s, and eventually established Penedo as a vegan utopian society.  

The idea was to live immersed in nature and free of religious and political turmoil and health issues associated with smoking and drinking alcohol. The chosen natural environment was Itatiaia, Brazil’s first national park, on the edge of which Uuskallio established his community on a farm. Farming proved difficult, since the land had previously been used to grow coffee beans and the soil was worn out. But with hard work, the Finnish settlers eventually got corn, yams, bananas, and various citrus fruits to grow. 

The Finns brought their culture to this little pocket of Brazil, including the sauna, which became popular. After 1942, when the colony's agrarian way of life was finally deemed unsustainable, they turned to the draw of their culture to attract visitors, and tourism eventually became the primary driver of the settlement's economy.

Visitors were already coming to Penedo because of its proximity to Itatiaia, and staying in the houses of the residents. The Finnish settlers capitalized on this trend, building more inns and hotels, and crafting wares like rugs and clothes to sell to the tourists. They started using Finnish cuisine and folk dancing as added attractions, and a folk dancing group still puts on regular performances. 

The "Little Finland" attraction opened in 1998, complete with a Santa Claus House. Though the original homes and buildings of Penedo had not been built with the goal of recreating Finland, for the sake of authenticity amid the rise of tourism it was determined there should be a part of Penedo that resembled the home country of the settlement's ancestors. The houses here look like they are built only of logs, and Santa Claus himself receives visitors all year long.