Chinese firms plan bid for railway linking Brazil’s grain regions | South China Morning Post

Chinese firms plan bid for railway linking Brazil’s grain regions | South China Morning Post:

With 1,100km, Ferrogrão will connect grain-producing regions in Brazil’s centre-west to the port of Miritituba, in the northern Pará state. The railway is expected to be an alternative to BR-163 road, currently the only way to take grains from central Brazil to northern ports.

The project is estimated to demand 12.6 billion reais (US$3.89 billion) in investments.

Vasconcelos said he was recently in China and was told about the intention from certain Chinese companies to form a consortium to take part in the auction, scheduled for the first half of 2018. He did not name the prospective bidders.

“The Chinese are very interested in Ferrogrão,” he said, referring to state-owned enterprises in sectors such as cement and steel.

In May, Brazilian and Chinese officials launched a joint Brazil-China investment promotion fund to increase productive capacity.

The fund has an initial sum of US$20 billion to finance investment projects in Brazil that are of interest to both countries.

In June, Jorge Arbache, foreign affairs secretary of Brazil’s planning ministry, said the fund was ready to receive investment pitches.

The fund’s resources will primarily be allocated towards infrastructure, but will also accept financing requests related to manufacturing, agriculture and technology, the secretary said.

He said the fund’s investment decisions will be made by a committee composed of Brazilian and Chinese officials, taking into account both countries’ priorities.

The fund agreed on last year is expected to help finance the construction of railways. This will link Brazilian soy- and corn-producing areas to ports, potentially boosting Brazil’s economy as it slowly emerges from a deep recession.

China also stands to gain because it is a large buyer of Brazilian grains.

Capital controls for investments outside of Brazil

I will sometimes paste conversations with friends and potential clients. Names and details are always changed.


Mr. Martins:

I am a lawyer in Westeross.  I found you through your blog.

I represent a private equity management company. We have an opportunity to bring a Brazilian investor in as an investor in one of our funds. Can you give me general guidance on what--if any--restrictions apply to such investments? 

As far as I can determine, Brazilian citizens (companies and individuals) have a duty to report any investment over $100,000 held outside the country. However, there are no restrictions on making investments abroad.

Any guidance you can provide is appreciated.

Viserys,

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Dear Viserys, 

Thanks for contacting me.  

I'm starting to advise some private equity funds in Brazil, and I think your contact comes at a very good time. Please let me know if your clients ever gets interested in investing in Brazil. 

Regarding your question, there is no previous license or approval required for a Brazilian to invest abroad.  The registration you mention does exist, but it must be made yearly and always after the investment has been made.

However, due to recent changes in law (through provisional measure 627), any income or capital gain made abroad must be declared and taxed in Brazil, every year. 

This may required your client to plan his investment better, since he will probably be subject to double taxation (Westeros and Brazil). 

Your client may postpone the Brazilian taxation if his investment is specially planned, but this kind of solution is still new and unclear.

Adler