Tax benefits for foreign investors in Brazil

One of the countries that most attract foreign investment in the world, Brazil is also a country that has several options in terms of tax benefits for foreign investors. When investing in Brazil, foreign companies can use various tax incentives, which are granted by the Brazilian public administration at the municipal, state and federal levels. For the most part, incentives are granted when projects are submitted, indicating the minimum amount to be invested, as well as strategic information such as job creation and other relevant matters.

In this week’s article, we separate benefits that are particularly interesting for investors who are interested in establishing ventures in Brazil. To learn more about the subject, read on.

Main incentive programs

In order to foster economic and technological activity in strategic sectors, the Brazilian government has developed a series of specific programs for investments in the country. Below you will find the main programs.

RECAP – Special Regime for the Acquisition of Capital Goods for Exporting Companies

Companies established in Brazil, which earned more than 50% of gross revenue from the export of products or services, and shipyards, may have access to PIS and COFINS exemption in the acquisition of capital goods (imported or domestic). This tax exemption is valid for three years from the date the benefit is granted.

PADIS – Support Program for Technological Development of the Semiconductor Industry.

Aimed at companies that invest in R&D and production in strategic sectors of semiconductors, displays (displays) and LEDs, this program grants exemption from IPI, PIS and COFINS in the acquisition of raw materials, inputs and software applied in their production and research activities . The exemption can also be applied to the sale of products manufactured by these companies, in the interim of a benefited operation.

PADTV – Support Program for the Development of the Equipment Industry for Digital TV

Investments in technological development and production of equipment for Digital TV can benefit from the exemption from IPI, PIS and COFINS. The benefit is applied to the acquisition of raw materials, inputs and software used in its production and research activities. The same type of exemption can be applied to the marketing of products manufactured by these companies.

REIDI – Special Incentive Regime for Infrastructure Development

Through this program, PIS and COFINS exemption is granted to companies that invest in infrastructure, under the Growth Acceleration Program (PAC). The benefit can be applied to the acquisition of products, construction services and inputs, to be incorporated into fixed assets. The exemption applies to transport, energy, irrigation and sanitation projects and expires in 5 years from the date it is granted.

REPENEC – Special Incentive Regime for the Development of the Oil Industry Infrastructure in the North, Northeast and Midwest Regions

Infrastructure projects developed for the oil industry in the North, Northeast and Midwest regions of Brazil can benefit from this special tax regime, provided that the qualified companies are headquartered in one of these regions.

Tax incentives apply to the import and acquisition of new machinery, equipment, tools or devices, as well as construction materials to be used or applied in infrastructure, or to be incorporated into the fixed assets of these companies.

REPES – Special Taxation Regime for the Information Technology (IT) Services Export Platform

This special tax regime was created to favor companies that work in software development or that provide information technology services. In these cases, the acquisition of IT products and services will be exempt from PIS and COFINS under the REPES regime. It is also possible to import products exempt from IPI as long as there is no national similar.

In return, companies that fall under the regime must commit to exporting more than 80% of their annual gross revenue from the sale of products and services.

REPORTO – Tax Regime to Encourage the Modernization and Expansion of the Port Structure

The program corresponds to a special customs procedure, which grants exemption from IPI, PIS and COFINS and from Import Tax, provided that the equipment purchased, which may have been imported or acquired in the domestic market, does not have a national equivalent. 

This special regime aims to encourage port operators, concessionaires and leaseholders, as well as companies authorized to explore private port facilities.

REPETRO – Special Customs Regime for Exporting and Importing Goods for Research and Mining Activities in Oil and Natural Gas Deposits (Repetro).

This program is aimed at the oil and gas sector and aims to make the rules for the entry of equipment that will be used in the various phases of the oil exploration process in national territory more flexible.

RETAERO – Special Regime for the Brazilian Aeronautical Industry

This federal program is focused on stimulating the creation of a competitive environment for R&D and innovation in the Brazilian aeronautical sector. To this end, tax incentive mechanisms were created to promote investment in technological development by national and foreign companies with headquarters in the country.

The list is not exhaustive. There are a number of other incentives and programs that can be explored in your expansion activities to Brazil, one of the largest consumer markets in the world.

To guarantee access to the ideal benefit for your business, count on Gescon’s experts.