Investment Incentives in Brazil
Incentives or guarantees
- Forms of Aid
- The government encourages foreign investment in the form of tax exemption, aid, etc.
- Privileged Domains
- Companies which export more than 80% of their production in IT and communication are exempted from certain taxes (COFINS and PIS) on their exports. This regime has been extended to all exporting companies, but for three years only. There are, in addition, many public aids for SMEs that export.
- Privileged geographical sectors
- Tax reductions are granted to companies who set up in economically disadvantaged regions such as the North, Nordeste and the Amazonian regions (Manaus in particular).
- Privileged Geographical Zones
- There are 8 free zones in Brazil but only that of Manaus, Zona Franca de Manaus, has managed to attract foreign investment and seen real economic development.
- Country Risk
Tax incentives offered to foreign investors
- Special tax treatments
R&D projects and IT qualifies for some direct assistance and tax relief. There are some additional tax incentives allowing:
- Extra deductions of corporate income tax for employee donations;
- Investments in some regions of Brazils (north & north eastern), meals programs, etc;
- Withholding tax credits of 10% on royalties payments for transfer of technology agreements apply until 2013;
- Abolition of income tax on long-term infrastructure bonds for foreign investors.
Municipalities continue to offer exemption of some local taxes. For more information on tax incentive programs you can consult the Agência de Promoção de Exportações e Investimentos (APEX Brazil), InvestSP, Superintendência da Zona Franca de Manaus (SUFRAMA), AD Diper Pernambuco Economic Development Agency, the Companhia de Desenvolvimento Industrial do Estado do Rio de Janeiro (CODIN) and the Instituto de Desenvolvimento Industrial de Minas Gerais (INDI).
- Useful Links
Agency for the promotion of investment in Brazil
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