Formation Company & Tax Advisory

Monday, May 21, 2018

Tax Incentives in Brazil

One of the most peculiar features of the Brazilian economic background is the presence of incentives and tax break for  business start-up projects and the foreign investors have right to benefit from them just like the domestic ones. To get such benefits it is necessary to know the land, law, customs situation, and proceed with a precise analysis of the bureaucratic and organization procedure you have to cope with.

Bright Business Consulting LLP supports in all the steps. The range of incentives and tax breaks companies may benefit from if they invest in Brazil, is made of federal incentives, aimed at foster domestic policy purposes and supplied in the shape of tax concessions or financing at a special rate and both State and Municipal incentives, in most cases directly negotiable with the local authorities and supplied as exemptions, reductions or postponing direct taxes, in particular "ICMS" tax.

Being consistent with the purpose of fostering the development of Northern and North-Eastern areas of Brazil,  those companies opting for the investments in these areas of the "Country" with projects of modernization, extension and diversification, can take advantage of several tax concessions, such as, for example, the exemption from "IPI" on the imported equipment used from the new industrial activities settled in the region, possibilities to enjoy tax reductions for investments coming from other companies, government loans or warranted by North Eastern or by "BNDES".

There are important incentives provided with reference to specific activity segments such as "Agriculture and Food Industry" and technological and in fields such as "Oil&Gas", in particular in the research and extraction activities aeronautics, infrastructures, especially ports, sports premises, building and housing.

The Federal Government and local Governments do not usually offer incentives meant as lost fund financing. As an exception to this behaviour, in case there is great interest on national, state and/or municipal scale, within a specific package, and after some negotiations, it may happen that grounds are offered to build new plants or start development plans of the infrastructures in the area where the investments are arranged.

Most of these "Tax Incentives" are granted both to Brazilian companies and to foreign ones, both in the start-up stage and in following growth stage. The concessions are given to foster the economic development of some regions of Brazil and to channel the private capital towards specific sectors of the economic activity.

ZFM – Duty-free zone of Manaus is ruled by "SUFRAMA" (Superintendencia da Zona Frana de Manaus). "ZFM" is an area of free trade and import to which tax benefits are granted.

The main purpose is that of fostering the creation of industrial , commercial and agricultural poles in Amazonia, so that to consent the economic development of the area.

The tax breaks for "ZFM" are postponed until 2073 and regard chiefly:

  • Exemption of import duties for those products bound for "ZFM" itself consumption.
  • Duty reduction on industrialized product in "ZFM" bound for other country export.
  • Exemption from "IPI" tax.
  • Exemption from the income tax for 10 years for those entrepreneurs whose projects were approved by the Office for the Development of Amazonia.
  • Exemption from "ICMS" and "ISS".
  • Incentive programmes are frequently updated: the companies who are interested may ask Bright Business Consulting LLP in order to combine and monitor the opportunities there may be at their disposal.

The incentive programs are subject to frequent updates: the interested companies may apply to the Bright Business Consulting LLP in order to combine and monitor the opportunities that may be available to them. Furthermore, the analysis through  a "Tax Planning" and  a "Consulting for the Company Investigation & Commercial Information" represents strong elements of incidence to enjoy higher profits, just in these areas the activities made by Bright Business Consulting LLP is synonymous of "Warranty & Assistance".

Bright Business Consulting LLP, through consolidated and calcified synergies in the "PEE Project", useful to the accompaniment of business is the congenial partner for structuring or consolidating the business.

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