BRAZIL: Brazil Foreign investment exemption from paying IOF on shares

Monday December 5 2011

The finance minister, Guido Mantega announced on 1 December measures to stimulate and strengthen the Brazilian economy in relation to Brazil foreign investment. The initiatives are intended to encourage investment, credit and consumption in the midst of an adverse international scenario. Three Provisional decrees and an extra edition will be published in the Official Gazette.

One of the decrees reduces the financial operations tax (IOF), the percentage of tax falls from 2% to zero on Brazil foreign investment in stocks – both primary offering and secondary market – venture capital and cancellation of receipts of shares of Brazilian companies traded abroad The measure encourages the entry of foreign capital with a profile of long-term investment. The IOF levied on applications for non-residents in long-term bonds with a duration over four years is also being reduced from 6% to zero.

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