Provisional Measure Increases The Limit Of Equity Interest Held By Foreign Investors In Brazilian Airline Companies

On March 2, 2016, the Brazilian government published the Provisional Measure No. 714/2016 ("MP No. 714/16"), which, among other matters, increased the limit of equity interest held by foreign investors in Brazilian airline companies for up to 49% of their voting capital, subject to the approval of the relevant aviation authority. Before the MP No. 714/16, the limit of equity interest allowed to foreign investors in Brazilian airline companies was only 20%. According to the new measure, the participation of foreign investors in the voting capital can even exceed the 49% limit if there is reciprocity between Brazil and the country of the foreign investor, based on air services agreements executed by both countries. The referred normative act had a very positive impact in the industry and is expected to boost foreign investments in the aviation market, attract new airline companies, allow the expansion of the international and domestic...