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Notícias e Publicações

Brazil: Privatization and continuous interest by foreign investors

The Brazilian federal government has launched a huge privatization program which encompasses several diff erent economic segments of the Brazilian economy.

The first main company included in the privatization process is the main Brazilian energy company, Centrais Eletricas Brasileiras, which has several assets in the electric power sector.

The government also intends to privatize through concessions highways in the Brazilian northern region and airports, including Congonhas Airport in the city of Sao Paulo, which is probably the busiest airport in Brazil. The Casa da Moeda do Brasil, which, among others, is responsible for printing the Brazilian currency, is part of this privatization program.

One can say that the main objective of this privatization process is to reduce the huge public defi cit, which is one of the major obstacles to the recovery of the Brazilian economy.

While evaluating a possible participation in the privatization process, a foreign investor could think of using Islamic fi nance structures abroad like Musharakah or Murabahah that could work under Brazilian law.

As to trade and investment in Brazil, the government is also paying att ention to the importance of agreements against double taxation. There are seven countries which are relevant importers of Brazilian products and with whom Brazil does not have this type of agreement. Among these seven countries are two Muslim-majority countries: Saudi Arabia and Iran.

Finally, it is worth mentioning that the Qatar Investment Authority (QIA) is paying att ention to a bill that would allow the acquisition of land by foreigners (there are currently certain restrictions). The QIA with a potential Brazilian partner would be willing to acquire land in the Central-West Region of Brazil.

Este artigo foi publicado no Islamic Finance news Volume 14, exemplar 37, do dia 14 de setembro de 2017.