A provisional measure (MP) in Brazil is designed to boost data center installations by mandating clean energy use and offering significant tax incentives. These incentives include full long-term investment tax breaks (Capex), import tax exemptions for equipment not manufactured domestically, and tax exemptions on services exported from these data centers.
The government aims to accelerate the effects of the Tax Reform on the sector. In return for the incentives, data center companies are expected to invest in regional development, domestic market offerings, AI research, and sector sustainability.
The Brazilian government actively promotes this initiative internationally, with Minister Haddad presenting the plan to major tech players in the US and Minister Silveira engaging with Chinese companies in China, including discussions with ByteDance (TikTok) regarding a potential R$ 50 billion investment in Ceará.
While major cities like SĂŁo Paulo and Rio de Janeiro already see benefits, expanding infrastructure (electricity and connectivity) in the North, Northeast, and Center-West regions remains a challenge. The new legal framework aims to address this disparity by encouraging regional investment.
Brazil's competitive advantages (construction industry, supplier chains) are highlighted, while the “Brazil cost” remains a challenge. The proposed MP aims to create a more favorable environment for data center development throughout the country, driving both economic growth and technological advancement.