Free Trade Zones in Brazil (FTZs), also known as Export Processing Zones (EPZs), are specific areas within the country where certain businesses enjoy tax benefits and regulatory advantages to promote industrial production and export activities. Company formation in Brazil in these specific areas requires following certain requirements and procedures, which may vary. Our team can help you in this process by providing expert guidance and assistance every step of the way.
What are the Free Trade Zones in Brazil?
Free Trade Zones in Brazil are designed to attract foreign investors and business owners to open a company in Brazil, or make other substantial investments. These zones are strategically located in less populated rural areas, promoting economic development in these regions and creating economic connections between urban and rural areas.
There are currently 24 FTZs in the country. The most relevant FTZ is the Manaus Free Trade Zone, which stands out for attracting major global corporations with significant tax incentives in the Amazon region. Additionally, the Free Trade Zones of Brasiléia and Cruzeiro do Sul in Acre, along with the Free Trade Zones of Bonfim and Boa Vista in Roraima, play a pivotal role in promoting development in less populated areas.
The Free Trade Zone of Guajará-Mirim in northwest Rondônia encourages economic development along the border and strengthens relations with neighboring countries. Similarly, the Free Trade Zone of Tabatinga in the far northwest of Amazonas boosts economic growth in border areas and improves Brazil’s relationships with neighboring nations.
Our specialists in company incorporation in Brazil will explain how to open a business in these special areas.
How to open a company in a Free Trade Zone in Brazil
In general, the first step for company incorporation in Brazil would be to select the specific FTZ where you want to establish your company. Research is crucial, to understanding the unique incentives, regulations, and benefits offered by each Free Trade Zone in Brazil.
Next, you need to determine the type of business entity you want to create, such as a limited liability company (LLC). Your choice will impact your liability, tax structure, and other factors. Please note that some FTZs may mandate the presence of a local director or representative.
The incorporation process continues with the following steps:
- Check if your desired business name is available;
- Fulfill any capital requirements specified;
- Prepare the necessary incorporation documents (Articles of Incorporation, application forms, business plans, etc.);
- Submit your documents to the local authority responsible for overseeing businesses in the Free Trade Zone in Brazil;
- Complete the registration process for tax purposes with the Special Department of Federal Revenue of Brazil.
Additionally, other steps might be required in the Brazil company formation process, such as opening a bank account, obtaining special permits or licenses, and conforming with local laws, labor or environmental regulations.
Statistics about the Free Trade Zones in Brazil
Investors looking to invest in an FTZ, specifically in the Manaus FTZ, can find these statistics helpful:
- The Free Trade Zone in Manaus represents the largest tax waiver of the federal government, accounting for 16.1% of the total tax expenditure, according to the Federal Court of Accounts (TCU);
- The Manaus Trade Zone benefits 41,773 registered companies, with 18,054 of them located in the Amazonas state;
- The industrial hub in Manaus represents 2.4% of the country’s industrial GDP.
Contact our team if you are looking to learn more about how to start a business in a Free Trade Zone in Brazil. We can also provide assistance in expanding your company, such as by opening a branch in Brazil.