Standing for Imposto sobre Produtos Industrializados, IPI is applied to national and foreign products that have been modified in some industrialised way for consumption or use.
IPI is a federal tax paid by the local manufacturer or by the importer of the goods, and the rate is based on the products NCM code. This can be anywhere between 0% to 300%
The Manaus free trade zone has attracted more than 600 companies, including many of the world's largest enterprises, to establish production in some less than perfect production environment states like Acre, Amazonas, Roraima and Rondônia. The area includes big international companies like Nokia, Honda, Pepsi, Coca Cola, Panasonic, Harley-Davidson and many more.
The initial idea of the Manaus Free Trade Zone came in 1951 from Deputy Francisco Pereira da Silva. For a long time, the project had very little national backing or credibility and started life in a single warehouse rented from Manaus Harbour, in the Port of Manaus.
President Castello Branco signed a law redefining the Manaus Free Trade Zone in more concrete terms in 1967. The new law gave the Manaus Free Trade Zone a radius of 10,000 km with an industrial centre and an agricultural centre; it also created the base for the Manaus Free Trade Zone Superintendence (SUFRAMA).
SUFRAMA is a Public Administration agency affiliated to the Ministry of Development, Industry and Foreign Trade (MDIC). Besides promoting development strategies for Western Amazon, its primary goal is to manage and control the fiscal incentives granted to the companies established in the Manaus Free Trade Zone. Thus, it has the role of an investment-promoting agency for the area.
There are several highly beneficial incentives in the Manaus Free Trade Zone. The following show these benefits:
In addition, businesses can receive a 55% - 100% credit on the ICMS rates if they demonstrate contributions to the funds for the support of higher education, tourism, research and development (R&D) amongst others.
In order to obtain approval of industrial projects within the Manaus Free Trade Zone companies will be evaluated individually based on the following parameters:
It is estimated that 100 000 jobs in western Amazonia are directly related to the Manaus Free Trade Zone with an additional 400 000 indirectly related jobs outside the Free Trade Zone.