EPZ legal framework approved in Congress, awaits presidential approval

On June 23rd, Provisional Measure No. 1033/2021 was approved by the Chamber of Deputies. The measure deals with the taxation, currency exchange, and administrative regime of the Export Processing Zones (EPZs) for the production of medical oxygen that is used to prevent, control, and contain measures that may risk, damage, or harm public health related to Covid-19. The text now awaits presidential approval.

The new legal framework will also allow the EPZ area to be discontinuous, making it easier to connect to ports and airports.

Export Processing Zones are the global instrument by which countries ensure that their taxes are not “exported”. China’s industrial success in recent decades is due to hundreds of EPZs, a model successfully replicated in several countries, such as India, the United States, Argentina, and Uruguay.

In Brazil, the Pecém (CE) EPZ is currently in operation and another 13 authorized companies are being implemented: Acre EPZ (AC); Açú EPZ (RJ); Araguaina EPZ (TO); Bataguassú EPZ (MS); Boa Vista EPZ (RR); Caceres EPZ (MT); Ilheus (BA) EPZ ; Imbituba EPZ (SC); Macaíba EPZ (RN); Parnaíba EPZ (PI); Suape EPZ (PE); Teófilo Otoni EPZ (MG); and Uberaba (MG) EPZ.

By updating the legal framework of the EPZs, the regime will be modernized based on the current global context of reallocation of value production chains in the post-pandemic world.  It is the perfect time for Brazil to enable the development of EPZs since they also generate jobs that would not be generated without this global regime. By doing so, the country will attract investments aimed at production, opportunities for technology companies, and local and regional economic development – without unfair competition with the domestic market.

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