Brazilian government studies tax exemption for foreign investors

7 February 2006

Sao Paulo, Brazil, 07 Feb – The Brazilian government is studying the possibility of tax breaks for foreign investors as a way of attracting foreign investment, officials said Tuesday.

The studies, carried out by the Treasury Secretariat, include tax exemptions for non-resident foreign investors and for the production sector.

Secretary of state for the treasury, Joaquim Levy, said that the aim of the move was to make foreign investments carried out by acquiring shares or public stocks easier.

Levy said that tax exempts would bring Brazil closer to international practices as most countries gave tax breaks to non-resident investors.

The proposal for tax exemption would be sent by the Government to the country’s parliament in the first half of this year, Levy said.

In a press statement the Rio de Janeiro Industry Federation (Firjan) said that tax exemption would increase demand for listed stocks and shares.

“Increased demand for stocks and shares encourages lower interest rates and extension of maturity, which attracts investors with fewer propensities towards risk,” said the statement.

The measure will also make it possible to reduce costs for Brazilian companies that have resources abroad.

“It also strengthens the Brazilian stock market, by stimulating share floats in the country and encourage capital risk fund,” said the statement. (macauhub)