Brazil approved a decree to modernize free trade zones in the country

The new legal framework for free trade zones in Brazil, which was sanctioned in July last year to modernize the system across the country, was promulgated last Wednesday (1st) by the Presidency of the Republic through Decree No. 11,088/2022. The new legislation’s amendments are now on their way to being effectively implemented, which will bring more advantages for the ZPE Ceará, Brazil’s first Export Processing Zone.

Among the novelties provided for in the new legal framework is the end of the export commitment, allowing the sale of all output to the domestic market, provided that it is subject to taxation that characterizes equal treatment with domestic production. Another example is the permission for companies to work with fiscal benefits inside the free trade zone limits, as long as their operations contribute to industrialization or generate export-bound products.

New opportunities

According to Eduardo Neves, president of ZPE Ceará, the new legal framework brings greater flexibility, which is extremely important to attract new business to the Free Trade Zone facilities in Ceará. “This offers us greater competitiveness to attract different companies to our Sector 2, which has more than 1,900 hectares ready for new investments”, he says.

What’s New in the New Legal Framework

• End of the export commitment, which makes it possible to sell all production to the domestic market, as long as it is subject to taxation that characterizes equal treatment with national production;
• Permission for companies to work with fiscal benefits inside the EPZ area, as long as their operations contribute to industrialization or generate export-bound products;
• EPZ area may be discontinuous;
• Permission for companies installed in free trade zones in Brazil to set up branches outside them when dealing with an auxiliary unit dedicated to managerial functions or administrative or technical support;
• The validity of the regime may be extended for additional periods of up to 20 years;
• Authorization for the intermediation of commercial exporting companies in the exports of products manufactured in the ZPEs.

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