LAVCA | The Association for Private Capital Investment in Latin America
  • About
    • About LAVCA
    • Board, Team, & Advisors
    • Media
    • Contact
  • Members
    • Membership Benefits
    • Current Members
    • Member Access
  • Education & Programs
    • About
    • LAVCA Week
    • Calendar & Past Programs
    • LAVCA Education
  • Research & Directories
    • LAVCA Research
    • Industry data
    • LP Survey
    • Directories
  • ESG & Impact
    • Deal Book
    • LAVCA ESG Deal Awards
    • Impact Report
    • ESG Guidelines
  • Articles
    • Featured Articles
    • Industry News
  • VC
  • Member Login
  • Member Access

LAVCA | The Association for Private Capital Investment in Latin America

A non-profit member organization

  • About
    • About LAVCA
    • Board, Team, & Advisors
    • Media
    • Contact
  • Members
    • Membership Benefits
    • Current Members
    • Member Access
  • Education & Programs
    • About
    • LAVCA Week
    • Calendar & Past Programs
    • LAVCA Education
  • Research & Directories
    • LAVCA Research
    • Industry data
    • LP Survey
    • Directories
  • ESG & Impact
    • Deal Book
    • LAVCA ESG Deal Awards
    • Impact Report
    • ESG Guidelines
  • Articles
    • Featured Articles
    • Industry News
  • VC

PE Applauds Brazil Tax Cut

4 January 2011

LatinFinance

January 4, 2011 – The PE industry has welcomed Brazil’s plan to cut taxes on foreign investments in PE funds and some stock investments. Investors look likely return to the Fundos de Investimento em Participacoes (FIPs) local PE vehicle following news that the IOF tax would drop to 2% from 6% for foreign exchange transactions by overseas investors into FIPs and VC funds. “The reduction is very positive,” says John Michael Streithorst, GM for PE at Banco Modal.

“I would hope that this is a sign that [president Dilma Rousseff] is sensitive to private sector investment and is making the distinction between long-term investment capital and short-term speculative flows,” says Cate Ambrose, president of the Latin American Venture Capital Association. “It shows there is greater sophistication among policymakers and regulators to understand that PE is investing in companies, providing growth capital rather than speculating on the value of the real,” she adds.

The government had increased the IOF tax to 6% from 2% last year via 2 hikes, hoping to staunch a flood of short-term money into the country, which was exacerbating BRL appreciation. PE players questioned why foreign investments into FIPs were subject to the tax, arguing that PE is long-term. Some foreign investors quickly abandoned the FIP vehicle in favor of investing directly in Brazilian assets, explains Andrea Bazzo, an attorney with Sao Paulo law firm Mattos Filho. She notes that by investing directly, foreign investors would be subject to a capital gains tax of a minimum of 15% when they eventually exited. However, they switched to this strategy with the expectation that the government would eventually reduce the tax, she says. Now that the IOF has dropped to 2%, these investors should migrate back to FIPs to avoid paying capital gains tax.

PE Applauds Brazil Tax Cut was last modified: November 10th, 2011 by Editor
BrazilLAVCARegulation
0
Facebook Twitter Google +

Tech Growth Membership

The 2023 LAVCA Startup Founders Survey is made possible thanks to the support of LAVCA’s Tech Growth Membership, a group of leading tech companies and investors advancing the tech ecosystem in Latin America including AWS, Mercado Libre, Microsoft, Qualcomm Ventures, SVB, Riverwood Capital, Google and Movile.

VC Partner Events

    Tweets

    Missing consumer key - please check your settings in admin > Settings > Twitter Feed Auth

    Submit VC News

    Have private equity or venture capital related news that you would like to share? Submit your press releases and news to [email protected].

    VC Industry News

    • Valor Capital Group Leads USD20m Series B for Mexico’s Nexu

      17 October 2023
    • KASZEK Leads USD16.5m Round for Colombia’s Bia

      9 October 2023
    • Valor Capital Group and NFX Co-Lead USD9.3m Series A for Brazil’s Praso

      30 August 2023
    • EQT Growth Leads USD85m Series F for Brazil’s Gympass at USD2.2b Valuation

      23 August 2023
    • Tiger Global Leads USD61m Series B for Brazil’s Nomad 

      22 August 2023
    • NASZCA and IDB Invest Lead USD15.5m Series A for Mexico’s Wonder Brands

      17 August 2023
    • Victory Park Capital Provides USD100m Credit Facility for Mexico’s Klar

      15 August 2023
    • General Catalyst Lead USD45m Series B for Brazil’s Tractian

      7 August 2023
    • General Catalyst Leads USD45m Round for Brazil’s Tractian

      7 August 2023
    • ADQ Provides USD100m In Convertible Debt to Brazil’s Loft

      2 August 2023

    About LAVCA

     

    LAVCA is the Association for Private Capital Investment in Latin America, a not-for-profit membership organization dedicated to supporting the growth of private capital in Latin America and the Caribbean through research, education, networking and advocacy.

    LAVCA Office

        New York City:
        589 8th Ave, 18th Floor
        New York, NY 10018

    Explore LAVCA.org

    • About LAVCA
    • Board, Team, & Advisors
    • Media
    • Contact Us
    • Membership Benefits
    • Members Only Access
    • Education and Programs
    • Research
    • Policy
    • LAVCA VC
    • Contact Us

    @2020 - LAVCA. All Rights Reserved.


    Back To Top