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Benefits to the Free Trade Zone of Manaus - International Law Office

International Law Office

Corporate Tax - Brazil

Benefits to the Free Trade Zone of Manaus

December 19 2003

Federal Tax and Tariff Incentives
State Tax and Tariff Incentives
Municipal Tax and Tariff Incentives


A wide range of government-sponsored investment incentives are available in Brazil. This update discusses some of the special incentives available in the free trade zone of Manaus for investors in the industrial, commercial and agricultural sectors that are interested in carrying out business within this geographic market area.

The free trade zone of Manaus was created in 1967 to stimulate manufacturing investment in the region by providing tax incentives to companies on a phase-out basis until 2013.

In order to enjoy the region's tax and tariff incentive benefits, the applicant company must submit details of its projected activity, manufacturing processes and other relevant data to the Superintendency of Manaus. Such information is required in order to ensure that the applicant companies are not simply imported product assembly warehouse operations (which are expressly prohibited in Article 1(2) of Decree 2891/1998).

If the superintendency gives its approval, the company becomes eligible to receive the various federal, state and municipal tax and tariff incentives.

Federal Tax and Tariff Incentives

Federal tax and tariff incentives include:

  • an exemption from import duty tax for products that are destined for internal consumption (including capital goods), and for those products that are listed in Interministerial Instruction 300/1996 destined for the Amazon region;
  • an 88% reduction in import duty tax for raw, intermediary and secondary materials, and for the packaging of foreign products that are used during the manufacture of industrialized products in the free trade zone intended for consumption elsewhere in Brazil (provided that the superintendency gives its approval);
  • an exemption from the tax on manufactured products for (i) products that are manufactured in the free trade zone, and (ii) foreign products that are intended for consumption in the Amazon region listed in Interministerial Instruction 300/1996;
  • an exemption from the tax on manufactured products for products that are registered in the free trade zone and the Amazon region, as well as for raw and regional agricultural and vegetable extract products within the Amazon region. A tax credit will apply to these products if used as raw, intermediary or packaging material anywhere within Brazil; and
  • an exemption from the tax on exports for products that are manufactured in the free trade zone.

Special Amazon Export Programme
The Special Amazon Export Programme concerns the import of raw and component products for the manufacture of goods that are intended exclusively for export. The following incentives are available under this programme:

  • exemptions from import duty tax, manufactured product tax, the tax on exports and the tax on the distribution of goods and services (ICMS), as well as payments due to governmental agencies;
  • an exemption from the requirement to submit information to the superintendency;
  • an extra-quota import authorization;
  • premium quota concessions; and
  • a credit bonus for so-called 'location equalization'.

Company federal income tax benefits are also available. Initially, Decree-Law 756/1969 stipulated total exemption, although currently this exemption is variable at a rate of between 30% and 75% (pursuant to Decree 1564/1977) and relative only to those projects approved from January 1 1998 under Provisional Measure 2199-14.

State Tax and Tariff Incentives

State tax and tariff incentives include:

  • an exemption from the ICMS for products that are manufactured elsewhere in Brazil and are destined for the free trade zone;
  • ICMS credit granted by the state of Amazonas for the purchase of nationally manufactured products; and
  • the following ICMS refunds granted by the state of Amazonas: (i) 45% for 'final consumption' products; (ii) between 55% and 100% for capital goods and certain consumer goods; (iii) up to 100% for raw-product regional intermediary and aggregate goods, and agricultural products from so-called 'prioritized segments'; and (iv) up to 100% for electronic goods, fishing products, products manufactured within the state and medication that includes the use of regional medicinal plants.

A 50% ICMS tax credit is presumed on state and inter-state commercial operations that are unrelated to the commercialization of foreign products outside the free trade zone.

ICMS tax deferment applies to the importation of raw goods. ICMS taxation does not apply to moving parts and pieces.

Municipal Tax and Tariff Incentives

Municipal tax and tariff incentives include:

  • 10-year exemption from the urban building and property tax;
  • a 10-year exemption from charges for public cleaning and conservation services; and
  • a 10-year exemption from licensing charges.


For further information on this topic please contact Lourdes Helena Moreira de Carvalho or Augusto Barbosa Moreira de Carvalho at Garcia & Keener Advogados by telephone (+55 21 2203 2466) or by fax (+55 21 2233 3184) or by email (lhmc@garciakeener.com.br or amc@garciakeener.com.br).



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