november, 2012 manaus free trade zone business and investments in the amazon business and...
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November, 2012November, 2012
MANAUS FREE TRADE ZONEMANAUS FREE TRADE ZONEBusiness and Investments
in the Amazon
Business and Investments
in the Amazon
Ministério da Ciência, Tecnologia e Inovação
BRAZIL
AMAZONAS
The Manaus Industrial Park has created economic
alternative that enabled 98% of
preservation of the native vegetation
coverage. .
TOPICS
1 - CONTEXT OF NATIONAL ZFM
2 - WHAT IS SUFRAMA?
3 - THE AMAZON AND SOCIOECONOMIC MANAUS
4 - AREA OF COVERAGE MANAUS FREE TRADE ZONE
5 - KEY TAX INCENTIVES
6 - BASIC PRODUCTION PROCESS
7 - REGIONAL LOGISTICS
8 - ECONOMIC INDICATORS OF ZFM
CREATION OF THE MANAUS FREE TRADE ZONE
(Law no. 3.173/1957 amended by Article 1 of Decree-Law no. 288/1967)
“The Manaus Free Trade Zone is a free import and export trade area where special tax incentives apply, set up with the objective of creating in the interior of the Amazon Region an industrial, commercial and agricultural center under economic conditions that allow its development, given local factors and the great distance separating it from its markets”
(Law no. 3.173/1957 amended by Article 1 of Decree-Law no. 288/1967)
“The Manaus Free Trade Zone is a free import and export trade area where special tax incentives apply, set up with the objective of creating in the interior of the Amazon Region an industrial, commercial and agricultural center under economic conditions that allow its development, given local factors and the great distance separating it from its markets”
AGRICULTURAL AND CATTLE-RAISING DISTRICT
INDUSTRIAL DISTRICT
1 – CONTEXT OF ZFM IN BRAZIL
Area: 8.514.876,599 km2
GDP: 2,294 (trillions – US$)
GDP per capita: 11.769 US$
Population: 193 millions
Municipalities and their
Federative Units
Position occupied
by the 100 largest cities
Gross Domestic Product at current
prices($ 1000)
Holdings percentage (%)
relative
São Paulo/SP 1º 389.317.166,69 12,02
Rio de Janeiro/RJ 2º 175.739.349,47 5,43
Brasília/DF 3º 131.487.267,90 4,06
Curitiba/PR 4º 45.762.418,37 1,41
Belo Horizonte/MG 5º 44.595.204,91 1,38
Manaus/AM 6º 40.486.106,54 1,25
Porto Alegre/RS 7º 37.787.913,24 1,17
Salvador/BA 8º 32.824.228,58 1,01
AMAPÁMacapá-SantanaBoa Vista
RORAIMA
AMAZONAS
Manaus
ItacoatiaraTabatinga
Rio BrancoVilhena
RONDÔNIA
Guajará-Mirim
ACRE
Cruzeiro do Sul Porto Velho
BRASIL
Ji-Paraná
Bonfim
Brasiléia-Epitaciolândia
COVERAGE OF THE MANAUS FREE TRADE ZONE MODEL
Free Trade Areas (09)
Regional Offices (05)
SUFRAMA Headquarters
WESTERN AMAZON
(*)
TOPICS
1 - CONTEXT OF NATIONAL ZFM
2 - WHAT IS SUFRAMA?2 - WHAT IS SUFRAMA?
3 - THE AMAZON AND SOCIOECONOMIC MANAUS
4 - AREA OF COVERAGE MANAUS FREE TRADE ZONE
5 - KEY TAX INCENTIVES
6 - BASIC PRODUCTION PROCESS
7 - REGIONAL LOGISTICS
8 - ECONOMIC INDICATORS OF ZFM
SUPERINTENDENCE OF THE MANAUS SUPERINTENDENCE OF THE MANAUS FREE TRADE ZONE - SUFRAMAFREE TRADE ZONE - SUFRAMA
A Federal Public Administration Body connected to the Ministry of
Development, Industry and Foreign Trade (MDIC). Its objective is to
manager and control the tax incentives granted to companies that set up in
the Manaus Free Trade Zone, as well as to promote development
strategies for the Western Amazon, assuming in this way the role of an
investment stimulation agency.
SUFRAMA
Ministry of Development, Industry and Foreign Trade
PRESIDENCY OF THE REPUBLIC
TOPICS
1 - CONTEXT OF NATIONAL ZFM
2 - WHAT IS SUFRAMA?
3 - THE AMAZON AND SOCIOECONOMIC MANAUS3 - THE AMAZON AND SOCIOECONOMIC MANAUS
4 - AREA OF COVERAGE MANAUS FREE TRADE ZONE
5 - KEY TAX INCENTIVES
6 - BASIC PRODUCTION PROCESS
7 - REGIONAL LOGISTICS
8 - ECONOMIC INDICATORS OF ZFM
2 – SOCIOECONOMIC ASPECTS:: AMAZONAS E MANAUS
AMAZONAS ( NUMBER OF MUNICIPALITIES = 62) 20091 Gross Domestic Product (R$ x 1.000) 49.614.2 GDP per capita (R$) 14.620,94
3 Industry Participation in Economic Activity in gross value added (%) 41,40
4 Gross Value Added- (GVA) (R$ x 1.000) 41.719.
Source: IBGE
CITY OF MANAUS
Manaus 2009 - (R$ x 1000 MILHÕES) GDP 40.486. GDP per capita 23.286 GROSS VALUE ADDED (GVA) 32.948. Population 1.738.641 Area – Km2 11.401
Table 1 - Comparison with ZFM Amazonian countriesCountries Area Km² (1) GDP (US$ million)
Bolívia 1.098.581 25.010
Colombia 1.138.910 328.420
Peru 1.285.215 173.500Venezuela 912.050 315.840
Brasil (2) 8.514.876 2.473.441Amazonas (4) 1.559.161 24.837
Manaus (4) 11.401 20.267BILLING of PIM (3) 37 41.191 (*)
Table 2 - Sizing the PIM space in the city of Manaus
AREA - MANAUS km2 Part %
Total Area 11.401, 0,73% in relation to the State ofAM
Urban Area 412,27 3,62% in relation to Manaus
Transition Area 361,96 3,17% in relation to Manaus
Rural Area 10.626, 93,21% in relation to Manaus
(1) Source: Index Mundi, IBGE e SUFRAMA
(2) GDP quarterly (4o. quarter - Source IBGE); Exchange rate 1,675 - 2011 - Source IPEA
(3) Industrial District I e II -> 3,7 hc of anthropic area
(4) GDP of 2009 e exchange rate 1,9976 - Source IPEA ESTIMATE 2011(*) BILLING US$ DOLLAR
ECONOMIC ASPECTS OF THE CITY OF MANAUS
INDUSTRIAL DISTRICT
TOPICS
1 - CONTEXT OF NATIONAL ZFM
2 - WHAT IS SUFRAMA?
3 - THE AMAZON AND SOCIOECONOMIC MANAUS
4 - AREA OF COVERAGE MANAUS FREE TRADE ZONE4 - AREA OF COVERAGE MANAUS FREE TRADE ZONE
5 - KEY TAX INCENTIVES
6 - BASIC PRODUCTION PROCESS
7 - REGIONAL LOGISTICS
8 - ECONOMIC INDICATORS OF ZFM
Article 2 of Decree-Law No. 288/1967:
The Executive will mark on the left bank of the Rio Negro and Amazon, a continuous area with the minimum area of ten thousand kilometers square, including the city of Manaus and its surroundings in which to install the Free Zone.
COVERAGE OF THE MANAUS FREE TRADE ZONE MODEL
WESTERN AMAZON
AMAPÁMacapá-SantanaBoa Vista
RORAIMA
AMAZONAS
Manaus
Itacoatiara
Tabatinga
Rio BrancoVilhena
RONDÔNIA
Guajará-Mirim
ACRE
Cruzeiro do Sul*
SURINAME
GUYANAVENEZUELA
COLOMBIA
ECUADOR
PERU
BOLIVIA
Porto Velho
BRAZIL
Free Trade Areas (09)
Regional Offices (05)
SUFRAMA Headquarters
Ji-Paraná
Bonfim
Brasiléia-Epitaciolândia
WESTERN AMAZON
(*)
NATIONAL GOODS CONTROL SYSTEMExemption from IPI,
PIS/COFINS reduced to zero
FOREIGN GOODS CONTROL SYSTEM
For Inputs: Suspension of II, Exemption from IPI, PIS/COFINS reduced to zero
For products: Exemption from II and IPI and PIS/COFINS reduction
SYSTEM OF INDUSTRIAL INDICATORS
88% reduction in II, Exemption from IPI, differentiated tax percentage
PIS/COFINS – 0.65% PIS and 3.0% COFINS
1º
4º 2º3º
EXPORTS(ALICEWEB)
TOTAL EXEMPTION
TOPICS
1 - CONTEXT OF NATIONAL ZFM
2 - WHAT IS SUFRAMA?
3 - THE AMAZON AND SOCIOECONOMIC MANAUS
4 - AREA OF COVERAGE MANAUS FREE TRADE ZONE
5 - KEY TAX INCENTIVES5 - KEY TAX INCENTIVES
6 - BASIC PRODUCTION PROCESS
7 - REGIONAL LOGISTICS
8 - ECONOMIC INDICATORS OF ZFM
TAX INCENTIVES OF PIM – MANAUS INDUSTRIAL SECTOR
STATE TAXES
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
FEDERAL TAXES
IMPORT DUTY (II) - 88% reduction for the inputs to be used in industrialization processes, or proportional to the domestic added value, when dealing with information technology goods
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.
INCOME TAX (IR) - 75% reduction in taxes on income and nonrefundable additional fees, exclusively for reinvestment. Common to all the Legal Amazon Region.
SUFRAMASUFRAMA
SUDAMSUDAM
SEFAZ/AMSEFAZ/AM
TOPICS
1 - CONTEXT OF NATIONAL ZFM
2 - WHAT IS SUFRAMA?
3 - THE AMAZON AND SOCIOECONOMIC MANAUS
4 - AREA OF COVERAGE MANAUS FREE TRADE ZONE
5 - KEY TAX INCENTIVES
6 - BASIC PRODUCTION PROCESS6 - BASIC PRODUCTION PROCESS
7 - REGIONAL LOGISTICS
8 - ECONOMIC INDICATORS OF ZFM
BASIC PRODUCTION PROCESS - BPPsDecree No. 783, of March 25, 1993
PROJECT APPROVAL
REGISTRATION AT SUFRAMA
ISSUANCE OF LO (Operation Report)
ISSUANCE OF LP (Production Report)
MACHINERY IMPORTS/
ACQUISITION
INPUT IMPORTS/ACQUISITION
DELIVERY OF LTAI
(Technical Report of Independent Auditing Firm)
ISO 9000
PRODUCTION
Yearly30 months
INDUSTRIAL INDICATORS
Immediate
R&DEXPORTS
Where applicable
PROJECT PRESENTATION
PROJECT ANALYSIS
COUNTERPARTS REQUIRED OF THECOMPANIES FOR 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 inputs importation limits;
TOPICS
1 - CONTEXT OF NATIONAL ZFM
2 - WHAT IS SUFRAMA?
3 - THE AMAZON AND SOCIOECONOMIC MANAUS
4 - AREA OF COVERAGE MANAUS FREE TRADE ZONE
5 - KEY TAX INCENTIVES
6 - BASIC PRODUCTION PROCESS
7 - REGIONAL LOGISTICS7 - REGIONAL LOGISTICS
8 - ECONOMIC INDICATORS OF ZFM
ATLANTIC OCEAN
PANAMACANAL
Miami
Los Angeles
OCEANOPACÍFICO
LOCATION IN RELATION TO MARKETS
POPULATION OF LATIN AMERICA AND THE
CARIBBEAN:
574 million inhabitants
NORTH AMERICA
ASIA
CENTRAL AMERICA AFRICA
EUROPE
Manaus
Porto Velho
São Paulo
Belém
Tokyo
Taipei
Taiwan
Hong Kong
Caracas
Capital
Sea route
Air route
Road routeAir and sea route
River route
EDUARDO GOMES
INTERNATIONAL AIRPORT
PORT OF CHIBATÃO
AURORA EADI
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
• 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
PORT OF MANAUS
SUPERTERMINALS
BUEMVD
RIG
SSA
SUA
FOR
PEC
PORTO VELHO
AP
PAAM
RO
BELÉM
BRAZIL
Rout highway and rives
highway
OCEANOATLÂNTICO
Porto Alegre
SSZ
SEP
Belo Horizonte
Rio de Janeiro
São Paulo
MAO
DISTRIBUTION FROM PIM SOUTH DIRECTION
PORTS
-MANAUS- FORTALEZA-SUAPE -SALVADOR-SEPETIBA-SANTOS-RIO GRANDE-MONTEVIDEO-BUENOS AIRES
NORTH DIRECTION
PORTS
-BUENOS AIRES-MONTEVIDEO-SANTOS-SEPETIBA-SALVADOR-SUAPE-CEARÁ-MANAUS
SOUTH DIRECTION
NORTH DIRECTION
Transport Mode by highway and rivers most utilized
Routes to the Southeast and South of Brazil: •Manaus – Porto Velho – Cuiabá – Campo Grande – São Paulo: average of 7 - 10 days (highway and rivers)
•Manaus – Belém – Goiânia – Porto Alegre: average of 10 - 12 days (highway and rivers)
•Manaus – Belém: 4-5 days (via the Amazon River)
•Manaus – Porto Velho: 3 days (via the Madeira River )
•Manaus – Boa Vista: 12-14 hours (highway) or 1 hour (air)
TOPICS
1 - CONTEXT OF NATIONAL ZFM
2 - WHAT IS SUFRAMA?
3 - THE AMAZON AND SOCIOECONOMIC MANAUS
4 - AREA OF COVERAGE MANAUS FREE TRADE ZONE
5 - KEY TAX INCENTIVES
6 - BASIC PRODUCTION PROCESS
7 - REGIONAL LOGISTICS
8 - ECONOMIC INDICATORS OF ZFM8 - ECONOMIC INDICATORS OF ZFM
Indicators 2003 2011
Billing (USD billion) 10,62 41,1
Jobs (monthly average) at the PIM 64.971 119.198
Total Investments Made (USD billion) 2,76 10,7
Nationalization Index 47,04% 44,51%
Regionalization Index 27,75% 25,66%
Federal Taxes Collected (BRL billion) 3,72 12,35
Total Taxes Collected (BRL billion) 6,28 21,10
MACROECONOMIC INDICATORS
Source: Indicator systems October of 2012
Indicators 2003 2011 2012
Billing (USD billion) 10,62 41,1 27,7
Jobs (monthly average) at the PIM 64.971 119.198
118.905
Total Investments Made (USD billion) 2,76 10,7 10,019
Nationalization Index 47,04% 44,51% 40,17%
Regionalization Index 27,75% 25,66% 24,67%
Federal Taxes Collected *(BRL billion) 3,72 12,35 10.377
Total Taxes Collected *(BRL billion) 6,28 21,10 18.264
MACROECONOMIC INDICATORS OF PIM
Source: Indicators System September of 2012 – partial data* Data to October of 2012
SOME OF THE MORE THAN 600 COMPANIES IN THE MANAUS INDUSTRIAL SECTOR – PIM
Foreign Companies
SOME OF THE MORE THAN 600 COMPANIES IN THE MANAUS INDUSTRIAL SECTOR – PIM
Domestic Companies
Source: Indicator systems September of 2012
CONSUMER ELECTRONICS34.46%
OTHERS3.9%
WATCH-MAKING1.52%
DISPOSABLE 2.17%THERMOPLASTICS4.70%
INFORMATION TECHNOLOGY
GOODS11.51%
CHEMICALS 13.7%
TWO WHEELS19.76%
MECHANICALGOODS3.61%
METALLURGY4.67%
TURNOVER BY MARKET SEGMENT
MAIN SEGMENTS IN 2012*
MAIN PRODUCTS FROM THE AMAZON
Source: SUFRAMA – MDIC/ ALICE SYSTEM
October 2012
1º OTHER PREPARATIONS FOR THE PREPARATION OF BEVERAGES
2º MOTORCYCLES WITH PISTON ENGINES ALTERNAT.125CM3 <CYL <= 250CM3
3º PORTABLE MOBILE PHONE TERMINALS
4º RAZORS, NON-ELECTRIC
5º CONSUMPTION OF FUELS AND LUBRICANTS ON BOARD AIRCRAFT
6º OTHER RAZOR BLADES COMUM METALS
7ºMOTORCYCLES WITH PISTON ENGINES ALTERNAT.50CM3 <CYL <= 125CM3
8º OTHER GOLD COMPOUNDS, ONLY AURANOFIN
9º OTHER WORKS OF TANTALLUM
10º OUTHER PAPERS PHOTO / COLORS,SENSIBIL.N/IMPR
EXPORTED IMPORTED
1º OTHER PARTS FOR RADIO/TELEVISION RECEIVING DEVICES, ETC.
2º DIESEL OIL
3º "OTHER PARTS AND ACCESS. FOR MOTORCYCLES INCL. MOPEDS
4º HEAD-DISC SETS FOR HARD DRIVE UNITS, ASSEMBLED
5º OTHER PARTS FOR D./TELEPHONE/TELEGRAPH DEVICES
6º MICROPROCESSORS ASS. FOR SURFACE. (SMD)
7º OTHER MONOLITHIC INTEGRATED CIRCUITS
8º OTHER PARTS FOR RADIO/TELEVISION RECEIVING DEVICES, ETC.
9º PALLADIUM IN SOLID AND POWDERED FORM
10º M.RAM <=25NS,EPROM,EEPROM,PROM,ROM,FLASH
MAIN DESTINATIONS AND ORIGINS OF THE PRODUCTS FROM THE AMAZON
1º CHINA 36,13%
2º SOUTH KOREA 15,28%
3º UNITED STATES 11,36%
4º JAPAN 9,99%
5º TAIWAN (FORMOSA) 4,84%
6º TAYLAND 3,38%
7º MALAYSIA 3,20%
8º GERMANY 1,83%
9º HONG KONG 1,36%
10º MEXICO 1,12%
1º ARGENTINA 24,65%
2º COLOMBIA 13,77%
3º VENEZUELA 13,10%
4º UNITED STATES 5,52%
5º CHILE 5,27%
6º GERMANY 4,97%
7º MEXICO 4,02%
8º PERU 3,25%
9º ECUADOR 2,67%
10º PARAGUAY 1,81%
Source: SUFRAMA - MDIC/ALICE SYSTEM
Data until October of 2012
EXPORTS IMPORTS
http://www.suframa.gov.br/zfm_principal.cfm
http://www.suframa.gov.br/noticias/indexNoticias.cfm
THANK YOU.THANK YOU.
THOMAZ AFONSO QUEIROZ NOGUEIRA
Superintendente da SUFRAMA
+55 (92) 3321-7002 / 3321-7032
THOMAZ AFONSO QUEIROZ NOGUEIRA
Superintendente da SUFRAMA
+55 (92) 3321-7002 / 3321-7032