Infrastructure Debenture Regulations Published

The Brazilian Government has published a decree which many see as the first concrete step by the new government to encourage both domestic and international investment in infrastructure.

Decree n° 7.603, published in the Official Federal Gazette on November 10, regulates the measures for investor companies with infrastructure projects that intend issuing debentures within the special tax system created in December last year.

Under the system, individuals and foreign investors who apply for debentures to finance projects which the Government considers to be priority, will be exempt from Income Tax. Special Purpose Companies (SPEs) focusing specifically on infrastructure projects meanwhile will pay a fixed income tax rate of 15% on the income from these debentures – an attractive cut considering that tax on income obtained from debentures is normally 34%.

Upon assuming office at the beginning of the year, President Dilma Rousseff established seven infrastructure sectors as 'priority' areas: logistics and transport, urban mobility, energy...