Brazil to offer tax breaks to attract data center investments - Reuters

Brazil to offer tax breaks to attract data center investments - Reuters

Brazil's Finance Minister, Fernando Haddad, is set to embark on a trip to Silicon Valley this week with a strategic plan to lure data center investments by offering tax exemptions. The initiative aims to capitalize on Brazil's abundant renewable energy resources and diplomatic openness [1].

Haddad's visit includes a meeting with tech executives in Palo Alto on May 6, where he will pitch Brazil as a sustainable infrastructure hub. The Finance Ministry estimates that the new policy could unlock up to 2 trillion reais ($352 billion) in investments over the next decade [1]. The policy will exempt key federal taxes - PIS, Cofins, IPI, and import duties - on IT-related capital expenditures for data centers, but non-IT investments such as building construction will not be exempt [1].

The plan is particularly aimed at attracting investments from major tech companies like ByteDance, the parent company of TikTok, which is considering a significant investment in a data center in Brazil [2]. ByteDance is exploring a project in the Pecem port complex in Ceará, which would use wind energy from the country's northeast coast. The initial data center would have a capacity of 300MW, with potential expansion up to 1GW [2].

The policy aims to fast-track tax benefits to encourage green data center investments, which must meet sustainability criteria, including using 100% renewable energy. Additional conditions require projects to reserve a significant portion of capacity for domestic use, even if intended for export, and contribute to a fund supporting Brazil's AI ecosystem [1].

The initiative comes amid rising global trade tensions, with Brazil positioning itself as a neutral and open market for foreign investments. The country's large and growing data center market, particularly in Sao Paulo and Rio de Janeiro, is expected to benefit from this policy [2].

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3R60CO:0-brazil-to-offer-tax-breaks-to-lure-data-center-investments-sources-say/
[2] https://www.datacenterdynamics.com/en/news/bytedance-considers-data-center-for-tiktok-in-brazil-report/