Brazilian Finance Minister Fernando Haddad will travel to Silicon Valley this week as part of an initiative aimed at attracting data center investments by offering exemptions from federal taxes on technology-related spending. According to four sources familiar with the matter, this new plan targets international tech giants.
Haddad will hold meetings with technology leaders in Palo Alto on May 6.
Haddad will hold meetings with technology leaders in Palo Alto on May 6.
During these meetings, he will promote Brazil as a sustainable infrastructure hub with abundant renewable energy resources. Speaking at an event organized by J. Safra in São Paulo, Haddad confirmed the trip and highlighted Brazil’s potential to attract investment by leveraging its clean energy capacity. He emphasized that significant capital inflow could be achieved through the proposed tax policy. The Ministry of Finance anticipates that the new incentives could attract approximately 2 trillion reais ($352 billion) in investment over the next decade. This investment will encompass sectors such as construction, telecommunications, and artificial intelligence services. This information comes from two unnamed sources.Under the plan, some key federal taxes—PIS, Cofins, IPI, and import duties—on IT-related capital expenditures for data centers will be exempt. However, construction-related investments will not benefit from this exemption.
According to the sources, TikTok’s parent company, ByteDance, may also benefit from this new policy.
The incentives will initially be implemented via executive order, but will require Congressional approval to become permanent. This step aims to make Brazil an attractive investment hub amid global trade tensions. The plan will offer tax advantages to projects that meet sustainability criteria, requiring 100% renewable energy use and support for Brazil’s AI ecosystem. This step aims to make Brazil an attractive investment hub amid global trade tensions.
