The Drawback Regime was created in 1996 by the Brazilian government with the purpose of suspending import taxes of raw material intended to the manufacturing of exporting goods. Legislation has improved over time and today the regime can also be applied to raw material bought within the domestic market, as long as the production is bound to exports.
Tax suspension is applied to the following taxes: Import Taxation (II); Industrialized Product Taxation (IPI); Contributions to the Social Inclusion Program, Formation of Public Servant Patrimony and Social Security Financing (PIS/Pasep/Cofins); Additional Freight for the Renewal of the Merchant Navy (AFRMM); and Circulation of Goods and Services Taxation (ICMS).
In order to adopt the Drawback Regime, the company needs to be licensed for international trade operations (Radar) by the Brazilian Federal Reserve and file a request within SECEX (Federal Secretariat of International Trade),assuming the commitment of exporting production after transforming the raw material which is to be applied to the program. SECEX will then authorize the purchase of the raw material either from the domestic or foreign markets. This operation is registered through SISCOMEX, the Brazilian Integrated International Trade System utilized for all national import/export operations control.
The Drawback tax exemption regime may be applied to product transformation, processing, assembly and renovation or refurbishing of exports from any economic segment. Company may also file a request to purchase tax exempt raw material that is intended to replace inventory that has been used for the production of previously exported goods. The company benefiting from the regime may not necessarily be the company exporting the product, whereas it can be exported by an intermediary company such as a trading company or another manufacturing company that has used the product for further complex production.
More information can be found through the following links:
One of the greatest development challenges for Brazil lies in its infrastructure; be it its communication, information technology, energy, civil construction or transportation systems. Financial resources is available like never before, high end technology is today offered by national and foreign intelligence production and services organizations, and public policies are strategically steaming for economic growth.
But Brazil is a culturally complex nation. Its vast territory and historical colonization process, and later dictatorial government have led the country into a corrupt political structure and society. And here is where foreign investor might find hardest to deal with, when looking for good investment opportunities. Younger generations strive for better educational and health systems, higher quality of life, and higher standards for moral and ethical values, but they are still very much conducted by a misleading and alienating mass media, along with a limited communication system.
In shorter words, it is my advice to foreign investors to hire highly qualified and ethical professionals for assistance in their business deals in the country. Hence my passionate approach to International Relations in Brazil, when in this article I speak about the improvement of its transportation system as indeed one of the top priority issues.
Economic growth means a stronger and more productive industry, and therefore logistics is very necessary for establishing efficient supply and distribution chains. The Ministry of Transportation is the federal governmental institution who coordinates national transport infrastructure expansion and maintenance through the National Department of Transport Infrastructure. Brazil is still highly dependent on its road system for national distribution, which holds the country in a position of a highly expensive and oil dependent internal logistics chain.
There are strong public policies for rail road expansion, urban metro systems, and air and sea ports expansion and improvement calls, and we can see a lot more work getting done nowadays through PAC – Growth Acceleration Plan and growing investments due to the major international events hosting in the near future like the World Cup 2014 and the Olympic Games in 2016.
Bellow is a few official sources for strategic investment planning, available in portuguese (please use google translator for better understanding).
Do you have the necessary skills to lead in a global economy? Don’t fall into the traps of undermining cultural differences, when in fact, you can insightfully optimize your business development effectivesness by mapping your stakeholders’ cultural differences.
This Harvard Business Review’s IdeaCast on Cross-Culture Work in a Global Economy can help you sharpen up your cross-cultural business relations understanding by shedding light on how complementarily functional cultural differences can be when it comes to developing professional capabilities such as methods of communication, ways of problem-solving, sharing knowledge, and managing meetings in this emergingly interconnected global business environment of ours.
According to Erin Meyer, the author of the HBR article Navigating the Cultural Mindfield and the book The Culture Map: Breaking Through the Invisible Boundaries of Global Business, the world is becoming evermore about complex multi-cultural interaction.
A good example of the importance of having different approaches to business is the following extract from the interview as it describes, from an informal culture’s perspective, a highly disciplined business culture. “They are so rigid, so inflexible, they are so focused on the structure and puntuality of things that they are unable to adapt as things change around them.” This extract is particularily interesting when immersed in a social environment where self-deprecating the local culture has become the norm, such as in places like Latin America, and particularly in Brazil, where adaptability is a solid cultural trait.
Cultural differences are part of a diverse world that has been described as a source of conflict in Huntington’s The Clash of Civilization. But with the global advent of East meeting West simultaneously with North meeting South for multilateral negotiations, cultural differences are not only important to be considered when mediating political purposes, but to be applied as competitive advantages in diplomatic business encounters as much.
Building a sustainable strategy sometimes demands complex action plans involving multidisciplinary and interdependent areas of any organization. Such approach may come at high planning and interwoven execution costs, which may represent the first barrier at the decision making process on transitioning from an ordinary twentieth century business to a sustainable twenty-first century enterprise.
However, if your organization is indeed intending to incorporate the new business development model in its institutional framework, action shall not precede planning, and a simple road map to guide a first discussion on which actions should be given priority to during the transitional phase – however long it may last – will certainly fit a broader purpose. The following are the four key elements I believe lies at the core of a well planned head start.
Research & Development: R&D is the primary element in changing the ways in any organization, thus it provides technological solutions for current industrial processes that may release harmful residues to the environment, as well as new modes of product development. As we experience great increase in innovation initiatives along with growing incentives, having a strong R&D system may support consistent economic and intellectual property growth.
Measures of Compensation: Sustainability implies rational use of resources, and that means understanding the need of mitigating negative environmental and social impacts through reconstructive initiatives, such as the recovery of damaged areas, treatment of contaminated resources or restablishment of displaced communities. This may intertwine with the organization’s R&D capacity, for the development of specific technologies, or plans for community engagement in the cases of considerable social impacts.
Community Engagement: It is important to engage community members for awareness growth. This is the element conducting collective and collaborative transformation, which may be provided through capacity building and interactive educational campaigns.
Corporate Governance: It is essentialy important for any institution to publicly engage through incorporating governmental measures and combining internal and public policies in order to attract political support and stronger institutional recognition. At a time when private sector is continuously growing its active participation in development policies construction, incorporating external policy models may contribute to building holistic synergies between enterprises, market, society and government.