Photo: Matt Hintsa

*By © Connection Consulting 2009

It was virtually impossible to find imported products in Brazil before 1990. The Brazilian government made use of protectionist measures such as limiting quotes and extremely high taxes to discourage importing of goods. This picture however changed when ex-president Fernando Collor de Mello broke the importing barrier by reducing the average importing taxes and abolishing many limiting quotes.

Although it became easier to import products, there are still other challenges that companies will face when bringing their goods into Brazil. Besides of meeting prohibitions on the import of certain items such as used clothings, cars and machinery, importers have to deal with complex cascading taxes and charges that increase significantly the cost of importing products into the country. In most cases taxes (both federal and state) and other charges will add about 100% to the importing cost, depending on what type of product and which state is the final destination for the import.

How to start importing

All importers must be registered at Foreign Trade Secretariat (SECEX) through a system named Sistema integrado de comércio exterior (Siscomex). This system registers, monitors and controls international trades with Brazil. You will be able access to Siscomex from banks, broker agencies or terminals on foreign trading related governmental agencies. It is also possible to access the system from your office if you obtain a password at Federal Revenue Secretariat.

You will be registered at Siscomex as importer or exporter at Registro de Exportadores e Importadores (REI) the first time you are importing goods. The next step is to obtain an importing license if your product requires one. There are two types of license:

• Automatic license: Automatic Licenses are granted to most imports into Brazil.
• Non-automatic license: These are necessary for products that require approval from other ministries or agencies, such as National Petroleum Agency (ANP), Brazilian Institute of Environment (IBAMA), Ministry of Science and Technology (MCT). The list of products that require non-automatic licenses can be found here.

It is important to make sure you have the necessary license before you ship the goods, as some items are not allowed to enter the country without the documentation in place. Unfortunately, if your product is under a non-automatic license regime, it may take several months before you receive your license.

RTS – Simplified taxation regime

If you you are planning to import your products using the regular mail service or couriers, you may benefit from a simplified taxation regime when your import has a value under USD 3000. RTS however doesn’t apply for alcoholic beverages, tobacco and smoking related products.

The fixed import tax is 60% of product value declared in the commercial invoice plus the freight and freight insurance costs if these are not included in the value of the goods. The procedure to pay the tax will depend on the carrier you choose:

Regular mail

If the goods worth less than USD 500, taxes (import tax and ICMS) are paid at the post office when you are picking up the goods. For goods that worth above USD 500 and below USD 3000, you must register the import at Siscomex to obtain a Declaração Simplificada de Importação (DSI). In addition to ICMS (VAT) you will be required to pay BRL 150 for customs clearance.

Couriers

Courier will calculate and pay the necessary taxes directly to the Federal Revenue Secretariat, and the addressee will be charged later.

Minister Dilma Rousseff in the White House with President Lula and Obama (14/03/2009)

REUTERS, WASHINGTON D.C. – President Barack Obama said on Tuesday he wants stronger ties with Brazil, especially in the commercial area, reported yesterday Dilma Rousseff, a top aide and possible candidate to Brazil’s ruler party in 2010 presidential elections.

“He made what I consider a very strong and important statement,” she said at the end of the U.S.-Brazil CEO Forum, which brought together top U.S. business and top government officials from each country.

Rousseff, who is President Lula’s current Chief of Staff, said Obama dropped in on her and other forum participants during a meeting in the office of White House national security adviser Jim Jones.

The forum consists of ten business leaders each from the United States and Brazil, who meet at least once every six months to make recommendations to the two governments on how to expand trade and investment ties.

Bilateral trade between the two countries reached about $63.4 billion in 2008. The United States enjoyed a rare, but small, surplus with its 11^th largest trading partner.

The two sides discussed progress on bilateral tax and investment treaties, as well as ways the two countries could cooperate on developing renewable energy source and addressing global climate change, officials said.

The CEOs recommended the United States eliminate its tariff on ethanol imports, a move that would benefit Brazil but face strong opposition from U.S. corn growers and their proponents in Congress, such as Senator Charles Grassley.

The government and business leaders also called for conclusion of the long-running Doha round of world trade talks.

Rousseff blamed the slowdown in the talks on the global financial crisis, rather than the Obama administration. “I believe that we’ll sooner or later continue to an updated variant of the Doha round. I’m not pessimistic about the situation”, Rousseff said.