ANNOUNCED AS TEMPORARYNo
On 6 December 2012, Brazil's government decided to extend its Investment Support Program (PSI) through 2013 with BRL 100 billion (USD 47.6 billion) to back subsidised loans for capital goods (e.g., machines, equipment). The goal of the program is to stimulate the production, acquisition and (most importantly for these purposes) the export of capital goods and technological innovation in Brazil.
The total financial backing amounts to BRL 312 billion now. The financing is provided by the Brazilian Development Bank (BNDES, BRL 85 billion) and private banks (BRL 15 billion). The loans will be payable over a 10-year period and be made available at an interest rate of 3 per cent in the first half of 2013 and 3.5 per cent in the second half the year. In the meantime, the provisory measure (medida provisória) from 6 December 2012 has been transformed into law no. 12.814 of 16 May 2013.
The Brazilian Development Bank provides credits with below-market interest rates to legal persons (private or public) with headquarters and administrations in Brazil.In the case of companies with headquarters abroad, majorityshareholders (private or public) need to have residence in Brazil. Besides this, the bank imposes local content requirementson goods (mainly capital goods), services and software. However, itmakes exceptions when there is no national production of those goods.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
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