Manaus Free Trade Zone
Meeting with Taipei Delegation
Brasília, October 25th, 2013
MANAUS FREE TRADE ZONE
(ZFM) MANAGEMENT MODEL
PRESIDENCY OF THE REPUBLIC
Ministry of Development,
Industry and Foreign Trade
SUFRAMA
SUFRAMA Operating Area
FOREIGN GOODS CONTROL SYSTEM
For Consumables: Import Duty (II)
Suspension, Excise Tax (IPI) Exemption,
PIS/COFINS Rates reduced to zero
For Products: II and IPI Exemption and
PIS/COFINS Rates reduced to zero
WESTERN AMAZON
1
GUYANA
VENEZUELA
st
Bonfim
SURINAM
RORAIMA
COLOMBIA
Boa Vista
ECUADOR
Tabatinga
AMAPÁ
Manaus
DOMESTIC GOODS CONTROL
SYSTEM
Itacoatiara
EXPORTS
(ALICEWEB)
FULL EXEMPTION
PERU
Cruzeiro
do Sul*
AMAZONAS
4
BrasiléiaEpitaciolândia
WESTERN AMAZON
3
th
IPI Exemption, PIS/COFINS Rates
reduced to zero
rd
2nd
Porto Velho
ACRE
Macapá-Santana
RONDÔNIA
Ji-Paraná
Rio Branco
Guajará-Mirim
Vilhena
BRAZIL
SUFRAMA Headquarters
Free Trade Areas (9)
Regional Coordination Boards (5)
(*)
BOLIVIA
INDUSTRIAL INDICATORS SYSTEM
88% Reduction in II, IPI Exemption ,
Differential PIS/COFINS Rates – 0.65% PIS
and 3.0% COFINS
Main Tax Incentives –
MANAUS INDUSTRIAL SECTOR (PIM)
FEDERAL TAXES
IMPORT DUTY (II) - 88% reduction for the consumables to be used in industrialization
processes, or proportional to the domestic added value, when dealing with
information technology goods
SUFRAMA
EXCISE TAX (IPI) – Exempt
SOCIAL INTEGRATION PROGRAM (PIS) and CONTRIBUTION FOR SOCIAL SECURITY
FINANCING (COFINS) – Zero rated for incoming materials and inter-industry internal
sales and 3.65% for sales of finished goods to the rest of the country.
SUDAM
INCOME TAX (IR) - 75% reduction in taxes on income and nonrefundable additional
fees, exclusively for reinvestment. Common to all the Legal Amazon Region
STATE TAXES
SEFAZ/AM
STATE VALUE ADDED TAX (ICMS) Credit Incentives of between 55% and 100%. In all
cases, the companies are obliged to contribute to funds, which finance higher
education, tourism, R&D, and small and micro-companies
TABLE COMPARING THE MAIN TAX INCENTIVES
Inside the ZFM v Outside the ZFM
TAX
Inside the ZFM
Outside the ZFM
Exempt for goods entering the ZFM for internal consumption or industrialization purposes.
IMPORT
DUTY (II)
88% reduction for outgoing industrialized products
Information Technology goods: Tax Rate Reduction Coefficient (CRA)
Full payment of the tax rate
with differentiated rates for
the import of information
technology goods
Automobiles, tractors and other land vehicles: CRA + 5%
Exempt for goods entering the ZFM for internal consumption or industrialization purposes.
Exempt for goods produced in the ZFM, whether for internal consumption or for sale anywhere in
Brazil.
Full payment, with the
exemption of information
EXCISE TAX (IPI)
technology goods where
Equivalent to Brazilian exports abroad when sending domestically produced goods for consumption there is a reduction of up to
or industrialization in the ZFM
90%
Exemption for products produced with regionally produced agricultural raw materials and vegetable
extracts, excluding animal production, for establishments located in the Western Amazon (AMOC)
75% Reduction (up to 2018)
Full payment
Scaled reduction on income and non-refundable extras of 12.5% (up to 2013)
INCOME TAX - IR Reinvestment deposits
None
PIS/Cofins Credit discounts: 12 years
PIS/Cofins
STATE VALUE
ADDED TAX
Additional Freight Charge for the Renewal of the Merchant Navy (AFRMM) Exemption
3.65%
Reduction of between 55% and 100%
Information Technology Goods: 100%
9.25%
17% Retail and 12%
COUNTERPARTS REQUIRED OF COMPANIES
IN EXCHANGE FOR THE INCENTIVES GRANTED
Compliance with the Basic Production Process (BPP);
Creating Jobs in the Region;
 Granting social benefits to the workforce;
Incorporating state-of-the art product and production process technologies;
Increasing productivity and competitiveness levels;
Reinvesting profits in the region;
Investing in the training and qualification of human resources for scientific and
technological development; and
Approval of the industrial project within the annual consumables importation
limits;
Main Industries - Participation
Chemicals
12.47%
Metallurgy
4.22%
Information Technology
Goods 14.84%
Thermoplastics
4.81%
Two Wheels
18.47%
Consumer
Electronics
33.12%
Others
12.06%
Source: Manaus Industrial Sector (PIM) indicator report updated in August 2013
Data for June 2013
CHANGE IN PIM TURNOVER
in billions
70
73,519
69,036
60
61,585
54,352
50
45,663
40
10
50,364
49,685
37,553
31,972
22,750
26,545
10,622
35,090
30,163
14,190
43,871
41,237
41,404
30
20
49,441
25,697
25,878
21,268
18,914
9,105
2002
2003
2004
2005
2006
2007
Reals
2008
2009 2010
2011
Dollars
Source: COISE/CGPRO/SAP – SUFRAMA – INDICATORS SYSTEM – page 10
January to July 2013 partial data
2012
2013
AMAZONAS
BRAZIL
The Manaus Industrial
Sector has created an
economic alternative that
has enabled 98% of the
native canopy cover to be
preserved.
SOME OF THE MORE THAN 600 COMPANIES
IN THE MANAUS INDUSTRIAL SECTOR – PIM
Foreign Companies
RESEARCH INSTITUTES
SIDIA
Amazônia
SOME OF THE MORE THAN 600 COMPANIES
IN THE MANAUS INDUSTRIAL SECTOR – PIM
Domestic Companies
PORT AND AIRPORT INFRASTRUCTURE
PUBLICLY OWNED PORT:
- PORT OF MANAUS
Largest floating port in the world
Total area: 94,923 m²
PRIVATELY OWNED PORTS:
- SUPERTERMINALS
Storage Area: 8,000 m²
- CHIBATÃO
Storage Area: 17,600 m²
- AURORA EADI
Storage Area: 9,000 m²
EDUARDO GOMES INTERNATIONAL AIRPORT:
- CARGO TERMINAL
Total area: 49,000 m²
Third largest airport in Brazil in terms of cargo
SUPERTERMINALS
DISTRIBUTION FROM THE PIM
SOUTH BOUND
ATLANTIC
OCEAN
AP
Ports
-MANAUS
- FORTALEZA
-SUAPE
-SALVADOR
-SEPETIBA
-SANTOS
-RIO GRANDE
-MONTEVIDEO
-BUENOS AIRES
BELÉM
PEC
MAO
PA
AM
FOR
SUA
PORTO
VELHO
SSA
RO
NORTH BOUND
BRAZIL
Ports
Road and river transport most used
Routes to the South and Southeast of Brazil:
Rio de Janeiro
São Paulo
•Manaus – Porto Velho – Cuiabá – Campo Grande – São Paulo:
average of 7 - 10 days (Road and river)
SEP
SSZ
•Manaus – Belém – Goiânia – Porto Alegre: average of 10 - 12
days (Road and river)
•Manaus – Belém: 4-5 days (via Amazonas River)
Road and river
•Manaus – Porto Velho: 3 days(via Madeira River)
•Manaus – Boa Vista: 12-14 hours (highway) or 1 hour (air)
-BUENOS AIRES
-MONTEVIDEO
-SANTOS
-SEPETIBA
-SALVADOR
-SUAPE
-CEARÁ
-MANAUS
Belo Horizonte
Porto Alegre
RIG
MVD
BUE
Highway
NORTH BOUND
SOUTH BOUND
FIAM 2013 INVITATION
Images from the VI FIAM
Thank you very much!