This information is derived from the State Department's Office of Investment Affairs Investment Climate Statement. Any questions on the ICS can be directed to EB-ICS-DL@state.gov
Last Published: 7/31/2017

The GOB maintains ownership interests in a variety of enterprises at both the federal and state levels. Typically, state-owned enterprise (SOE) corporate governance is led by a board comprised of directors elected by the state or federal government with additional directors elected by any non-government shareholders. Although Brazil, a non-OECD member, has participated in many OECD working groups, it does not follow the OECD Guidelines on Corporate Governance of SOEs. Brazilian SOEs are concentrated in the energy, electricity generation and distribution, transportation, and banking sectors. A number of these firms are also publically traded on the Brazilian and other stock exchanges.

In the 1990s and early 2000s, the GOB privatized state-owned enterprises across a broad spectrum of industries, including mining, steel, aeronautics, banking, energy, and electricity generation and distribution. While the GOB has divested itself from many of its state-owned companies, it maintains partial control (at both the federal and state level) of some previously wholly state-owned enterprises.

Notable examples of majority government owned and controlled firms include national oil and gas giant Petrobras and power conglomerate Eletrobras. Both Petrobras and Eletrobras include non-government shareholders, are listed on both the Brazilian and NYSE stock exchanges, and are subject to the same accounting and audit regulations as all publicly traded Brazilian companies. Brazil previously restricted foreign investment in offshore oil and gas development through 2010 legislation that obligated Petrobras to serve as the sole operator and minimum 30 percent investor in any oil and gas exploration and production in Brazil’s offshore “pre-salt” fields. As a result of the GOB’s desire to increase foreign investment in Brazil’s offshore “pre-salt” hydrocarbon sector, in October 2016 the Brazilian Congress passed a bill that gives Petrobras right-of-first refusal in developing “pre-salt” offshore fields, allows foreign companies to serve as sole operators in “pre-salt” exploration and production activities, and eliminates Petrobras’ obligation to serve as a minority equity holder in “pre-salt” oil and gas operations.

Privatization Program

Given limited public investment funding, the GOB focused on transferring billions of dollars in state –owned airport, road, railway, and port assets to private investors through long term (up to 30 year) infrastructure concession agreements(public-private partnership - PPPs). These privatizations are carried out through public tenders Both domestic and foreign private companies are invited to participate in the privatization auctions.

In June 2016, Brazil launched its newest version of these efforts to promote PPPs for primary infrastructure. The Crescer Investment Partnerships Project (PPI), based in the Presidency, brings together the broad inter-agency to ensure consistency in the request for tenders and the contract awards. PPI covers federal concessions in road, rail, ports, airports, municipal water treatment, electricity transmission and distribution, and oil and gas exploration and production contracts. The estimated value of the concessions is USD 44.2 billion (using minimal tender values). The full list of PPI projects is located here Project Crescer. 

While some subsidized financing through the Brazilian National Development Bank (BNDES) will be available, PPI emphasized that bidders should also use private financing and debentures on these projects. All federal and state-level infrastructure concessions are open to foreign companies with no requirement to work with Brazilian partners.

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Brazil Economic Development and Investment