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. 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 production and world exports of commodities.
Companies located in an EPZ will be benefit from tax incentives, like as the exemption of Federal taxes (II: Import Tax; IPI: Tax on Manufactured Products; PIS: Social Contribution on Gross Revenue; Cofins: Social Contribution – Tax Presumptive Profit; AFRMM: Additional Freight Charge for the Renovation of the Merchant Navy) on domestic or imported raw materials and capital goods (new or used).
Some states in Brazil have offered incentives at the ICMS Tax (State Value-Added Tax). Additionally, these companies may also access other regional tax incentives, like the 75% reduction of income tax for new ventures in North and Northeast regions.
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. However, these exemptions are not applied at the sanitary, national security, and environmental measures. The long-term legal certainty is also an important attribute to this regime, considering that Federal incentives are granted for 20 (twenty) years and they can be extended for equal period.
The industrial projects established in Brazilian EPZ must be greenfield investments, and these companies should obtain at least 80% of the company’s total gross revenue sales originated by exports. The start-up of a company operation into ZPE depends on the EPZ administrator acceptance; the approval of industrial projects by the National Council of Export Processing (CZPE); and the previous authorization by Customs and Environmental Brazilian authorities.
Brazil currently has 19 EPZs in effective implementation process in 17 Brazilian states:
North Region: Senador Guiomard (Acre state), Barcarena (Pará state), Porto Velho (Rondônia state), Boa Vista (Roraima state), Araguaína (Tocantins state);
Northeast Region: Ilhéus (Bahia state), Pecém (Ceará state), Suape (Pernambuco state), Parnaíba (Piauí state), Sertão/Assu (Rio Grande do Norte state), Macaíba (Rio Grande do Norte state);
Midwest Region: - Cáceres (Mato Grosso state), Bataguassu (Mato Grosso do Sul state), Corumbá (Mato Grosso do Sul state);
Southeast Region: Aracruz (Espírito Santo state), Teófilo Otoni (Minas Gerais state), Uberaba (Minas Gerais state), Itaguaí (Rio de Janeiro state), Fernandópolis (São Paulo state);
South Region: Imbituba (Santa Catarina state), Rio Grande (Rio Grande do Sul state).
Senador Guiomard EPZ (Acre state) – which is close to the Brazil-Peru border - provides access to the Pacific, through the Interoceanic Highway. Its promising economic sectors are: fruits, Brazilian nuts and rubber (latex) - Amazon biodiversity -, wood processing and fish farming.
In the Northeast of Brazil - strategically located close to the African coast -, we highlight the Piauí and Ceará states EPZs. The first one is focused on biotechnology, fish farming, waxes and fibers, food processing (fruits and honey) and grains - such as soybeans, from the savannah areas (cerrado) in Brazil. And the Ceará state EPZ has a US$ 5.4 billion steel mill (Pecém Steel Company - CSP), – a partnership between Brazilian company Vale and Korea´s Dongkuk and Posco. Besides that, its promising economic sectors are: leather & footwear; textiles; ceramics; granite; and food processing (fruits and fish).
Therefore, the Brazilian EPZ regime established itself as an important tool to support national and foreign investments focused on the foreign market.
- Brazilian EPZ regime
- Law 11,508/2007 - Rules on the tax, exchange and administrative regimes of Export Processing Zones and other matters (Unofficial translation)
- EPZ Pecém (Ceará State):
- EPZ Parnaíba (Piauí State):
- EPZ Uberaba (Minas Gerais State):