Brazil is at the spotlight of foreign investors but few know about the Manaus Free Trade Zone and its fiscal incentives.
In an effort to raise awareness of this topic, the Brazilian American Chamber of Commerce of the Southeast invited tax specialists from Manaus law firm, Andrade & Camara; and Secretary of Planning and Economic Development in Amazonas, Mr. Appil Tolentino to give panels on the Free Trade Zone’s tax incentives; its import and export opportunities; and to give an overview of the legal requirements for investing in the region.
At the end, Mr. Bob Tramontano, Head of Business Operations for NCR, shared the story of how NCR entered the fourth largest ATM market in the world and eventually doubled their business by developing a partnership with major Brazilian bank, Bradesco. Tramontano explained that the key to success in Manaus is to balance the region’s high operational costs with its many benefits.
Free Trade Zone
Secretary Tolentino stated that since 2002 Manaus has had an increase of thirty-two billion dollars in its PIB, becoming the nation’s second largest industrial hub. What has attracted more than 600 companies (including Georgia’s NCR and Coca-Cola) to the region is the opportunity to enter the world’s seventh largest economy while receiving unique federal, state and municipal tax incentives.
Up to 88% reduction on Imports Tariff (I.I.) for manufacturing companies
Exemption of Tariff on Industrialized Products (I.P.I.)
75% reduction on company’s Income Tax
Exemption from PIS/PASEP and of Cofins contributions
Total or partial restitution (varying from 55% to 100%) of ICMS (tax over operations regarding the circulation of goods and over services)
As long as a company generates 500 direct jobs, it is eligible for exemption from urban property taxes, trash collecting fees, public cleaning, general maintenance, and license fees.
Companies that are interested in entering the industrial hub must first submit a PPB to government agency SUFRAMA. As attorney Luis Felipe Ozores described, this document is a very detailed business plan requested by the government in order to protect it from clandestine operations. The PPB is also in place to restrict the free trade zone for manufacturers that produce products which are in high demand in Brazil.