CZPE EXECUTIVE SECRETARIAT - SE

THE COUNCIL OF THE EXPORT PROCESSING ZONES

THE BRAZILIAN REGIME OF

New Foreign Trade and Investment Opportunities

EXPORT PROCESSING ZONES (EPZ)

The Brazilian Export Processing Zones (EPZs) are free trade areas aimed at attracting the implantation of companies engaged in the production of goods to be traded worldwide.

Figure 1. The Brazilian EPZ Concept

THE CONCEPT

The EPZ Regime proves to be an opportunity for the best use of the Brazilian productive capacity potential in the international scenario, considering its diverse and high profile industrial park and the relevant country position in the global markets.

THE BRAZILIAN POTENTIAL

FOCUS: ADDING VALUE TO THE EXPORTABLE PRODUCTION.

Mining Agribussines Biodiversity High Profile Industrial Park

Customs Control

EPZ AdministrationOthers Related

Governamental Authorities

Administrative FacilitiesIndustrial Activities

Segregated Areas Regular Areas

FEDERAL LEVEL - THE BRAZILIAN EPZs MAIN INCENTIVES

FEDERAL LEVEL - OTHERS INCENTIVES APPLIED TO THE BRAZILIAN EPZs PROJECTS

STATE LEVEL – INCENTIVES FOR THE BRAZILIAN EPZS PROJECTS

TYPE DOMESTIC MARKET

TYPE DESCRIPTION

EXTERNAL MARKET

Tax

Purchases of goods and services in the domestic market:Suspension:- IPI (Tax on manufactured products); - COFINS (Social contribution – on income); - PIS/PASEP (Social contribution on gross revenue).

Administrative The Brazilian EPZ Regime provides administrative benefits in export and import operations, with the exemption of licenses or authorizations to import raw material and capital goods.

Except: Sanitary; National Security; and Environmental Measures.

Long-Term Legal Certainty Federal incentives are granted for twenty years and they can be extended for equal period.

Purchase of goods and services in the external market:Suspension:- II (Import tax);- AFRMM (Additional Freight Charge for the Renovation of the Merchant Navy);- IPI; - COFINS (Importation); - PIS/PASEP (Importation).

Regional TaxIncentives

Tax Incentives/ North and Northeast regions = Reduction of the Corporate Income Tax (IRPJ) for new ventures (Limit: 75% - Ten years), according the benefits of the Superintendency of Development for the Amazon – SUDAM and the Superintendency for the Development of the Northeast - SUDENE.

Export Promotion Income Tax exemption on money transfers related to market research and export promotion activities.

R&D - IT Investments in Research & Development, and Information Technology may claim incentives for IT goods and automation.

TYPE DESCRIPTION

Tax

Some States in Brazil have offered incentives at the ICMS Tax (State Value-Added Tax) to the EPZ Projects: products imported; transportation services; and inner-state sells.

20 States + Federal District: Acre, Bahia, Ceará, Goiás, Mato Grosso, Maranhão, Mato Grosso do Sul, Pará, Paraíba, Pernambuco, Piauí, Rio de Janeiro, Rio Grande do Norte, Rio Grande do Sul, Rondônia, Roraima, Santa Catarina, Sergipe, Tocantins, Minas Gerais and Federal District.

The industrial projects established in Brazilian EPZ must be greenfield investments.

Companies should obtain at least 80% of the company´s total gross revenue sales originated by exports. Products sold to the domestic market will be subject to the payment of all taxes normally granted by the EPZ regime.

The tax suspension is limited to the acquisition of:

LIMITS AND REQUIREMENTS

THE BRAZILIAN EPZ POTENTIAL

Companies installed within an EPZ can not establish a branch or subsidiary neither participate in another legal entity located outside the Export Processing Zone.

Main producers of agricultural products – 2022/2023(Projections of The Brazilian Ministry of Agriculture)

Raw Materials

Intermediate Products

Packaging Materials

Capital Goods (New or Used)

PRODUCTS VOLUME(MILLION TON)

% PARTICIPATION ININTERNATIONAL TRADE RANKING (WORLD)

BEEF 1,9 19,9% 2nd

CHICKEN MEAT 4,8 41,7% 1st

CORN 18,6 13,4% 4th

SOYABEANS 63,8 44,2% 1st

Brazil currently has 19 EPZs in effective implementation process in 18 Brazilian states:

EPZs are in different stages:

- Ceará (CE) EPZ was bonded by Customs Authority and its initial phase started its operations in 2016.- Piauí (PI) EPZ is finishing its infrastructure work and customs procedures.- Cáceres (MT) EPZ initied its infrastructure work.- Açu Port EPZ (RJ) was the most recente EPZ authorized in Brazil (December/2017).

1 – Acre (AC) EPZ;

2 – Porto Velho (RO) EPZ;

3 – Boa Vista (RR) EPZ;

4 – Barcarena (PA) EPZ;

6 – Araguaína (TO) EPZ;

7 - Cáceres (MT) EPZ;

8 – Bataguassu (MS) EPZ;

9 – Fernandópolis (SP) EPZ;

10 – Uberaba (MG) EPZ;

THE CURRENT SITUATION

The Brazilian EPZs

11 – Teófilo Otoni (MG) EPZ;

12 – Aracruz (ES) EPZ;

13 – Porto do Açu (RJ) EPZ;

14 – Imbituba (SC) EPZ;

15 – Ilhéus (BA) EPZ;

16 – Suape (PE) EPZ;

17 – Macaíba (RN) EPZ;

18 – Pecém (CE) EPZ; and

19 – Parnaíba (PI) EPZ.

RO

MT

AM

AC

PA MA

TOBA

PI

CE RN

PBPE

ALSE

ES

GO

MS

SP

PR

RS

SC

MG

DF

RRAP

RJ

THE MOST ADVANCED BRAZILIAN EPZS

CEARÁ (CE) STATE EPZ

It has a initial phase with US$ 5.4 billion steel mill (CSP), – a partnership between Brazilian company Vale and Korea´s Dongkuk and Posco.

In 2016 and 2017, Ceará (CE) State EPZ was awarded by fDi Magazine (Financial Times) - Global Free Zones of The Year (Winner - Large tenants/ Latin America and Caribbean; and Bespoke Awards - Supporting education and training/ Infrastructure upgrades/ Expansions.Its current expansion plan has indicated new industrial projects to theses sectors: leather & footwear; textiles; ceramics; granite; food processing (fruits and fish), and oil referiny.

PIAUÍ (PI) STATE EPZ

Piauí (PI) State EPZ is finishing its infrastructure work and customs procedures.Its promising economic sectors: biotechnology, fish farming, waxes and fibers, food processing (fruits and honey) and grains - such as soybeans, from the savannah areas (cerrado).

Pecém EPZ (Ceará State)http://www.zpeceara.ce.gov.br

Parnaíba EPZ (Piauí State)http://www.zpeparnaiba.com

Brazilian Investment Information Network (Renai)http://investimentos.mdic.gov.br

Invest & Export Brasilhttp://www.investexportbrasil.gov.br

Brazilian Trade and Investment Promotion Agency (ApexBrasil)http://www.apexbrasil.com.br

Ministry of Industry, Foreign Trade and Services (Mdic)http://www.mdic.gov.br

Brazilian Revenue Service (RFB)http://idg.receita.fazenda.gov.br

Ministry of Laborhttp://trabalho.gov.br/trabalho-estrangeiro

Ministry of Foreign Affairs (MRE)http://www.itamaraty.gov.br

USEFUL LINKS

Esplanada dos Ministérios, Bloco J, Sala 100-A, CEP: 71931-720 / Brasília-DF (Brazil)

Tel: +55 61 2027-7499/ 7528/8396 - Fax: +55 61 2027-7016

E-mail: seczpe@mdic.gov.br - Homepage: http://www.mdic.gov.br/zpe

MINISTÉRIO DA INDÚSTRIA, COMÉRCIO EXTERIOR E SERVIÇOS – MDIC

CONSELHO NACIONAL DAS ZONAS DE PROCESSAMENTO DE EXPORTAÇÃO – CZPE

SECRETARIA EXECUTIVA – SE

Brazilian Agency forIndustrial Development