Brazil is set to unveil a tax incentive plan in early September, aimed at luring foreign tech companies to build data centers in the country, according to economic officials familiar with the plan. Dubbed the “Redata” programme, the initiative seeks to cut capital investment costs for firms and strengthen ties with the United States, which currently has a 50% import tariff on Brazilian goods.
The incentives could exempt tech investments from federal taxes such as PIS, Cofins, IPI, and import duties, provided projects meet 100% renewable energy sourcing requirements. The plan follows updates to Brazil’s special “export processing zones” (ZPEs) rules, enabling developers to leverage cheap, abundant renewable energy for data center projects.
Investors have shown strong interest, with one major project at the Pecem port complex being a joint venture between Casa dos Ventos and ByteDance, TikTok’s parent company. Officials suggest that Redata could also serve as a positive diplomatic signal amid US-Brazil trade tensions, particularly relating to former President Jair Bolsonaro’s trial and US tech regulations.
