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Montevideo, November 18th 2018 - 19:18 UTC

Brazil to lift restrictions on foreign ownership of airlines and farm land

Tuesday, January 31st 2017 - 21:56 UTC
Full article 5 comments
Temer plans to send Congress a bill allowing 100% foreign ownership of airlines, though investors will be obliged to help expand regional flight services, sources said. Temer plans to send Congress a bill allowing 100% foreign ownership of airlines, though investors will be obliged to help expand regional flight services, sources said.
Government will propose a bill lifting a ban on foreign investors buying farmland on condition that 10% of any purchase is destined to benefit landless farmers Government will propose a bill lifting a ban on foreign investors buying farmland on condition that 10% of any purchase is destined to benefit landless farmers
The main airline operating in Brazil is TAM, which merged with Santiago, Chile-based Latam Airlines Group SA to become Latin America's largest carrier. The main airline operating in Brazil is TAM, which merged with Santiago, Chile-based Latam Airlines Group SA to become Latin America's largest carrier.

President Michel Temer will propose legislation to lift restrictions on foreign ownership of airlines and agricultural land in Brazil as he strives to pull the economy out of a two-year recession, government sources said on Monday.

 Temer's conservative government plans to send Congress a bill allowing 100% foreign ownership of airlines, though investors will be obliged to help expand regional flight services, sources said.

The government will soon propose a bill lifting a ban on foreign investors buying agricultural land in Brazil, on the condition that 10% of any purchase is destined to land reform to benefit landless farmers and peasants, said a presidential aide.

Temer last year vetoed an aviation bill that would have allowed full foreign ownership of local airlines in an agreement with senators who wanted inclusion of measures to boost regional aviation. The new draft will do just that.

“The initial idea is to reopen regional routes that were abandoned so that they get regular flights again”.

Foreign companies currently can hold up to a 20% stake in Brazilian airlines. US carrier Delta Air Lines Inc has 9.48% of Gol Linhas Aéreas Inteligentes SA , Brazil's largest domestic airline.

Counting international routes, the main airline operating in Brazil is TAM, which merged with Santiago, Chile-based Latam Airlines Group SA to become Latin America's largest carrier.

Two other carriers, Avianca Brasil and Azul Linhas Aéreas, are controlled by foreign owners with Brazilian citizenship.

Attracting investors to buy into Brazilian airlines might not be easy due to jet fuel taxes and falling domestic traffic due to the recession. Despite huge market shares, Brazilian carriers have struggled to make a profit.

Plans to open up land to foreign purchases again, however, are bound to draw plenty of investors in Brazil's expanding agribusiness industry that is seeking new partners.

Brazil restricted the sale of land to foreign investors in 2010 due to concerns that countries such as China could take control of large segments of arable land in the midst of a super commodity boom.

Companies in Brazil's commodities sector have pushed to review the rules to allow more investment to flow into the country, especially in the pulp, paper and ethanol sector.

Top Comments

Disclaimer & comment rules
  • :o))

    REF: “Brazil to lift restrictions”: Removing the red-tape and the bureaucracies ALWAYS help in encouraging the Business-Environment - provided the misuses are totally avoided. Can Brazil do THAT?

    Feb 01st, 2017 - 09:23 am 0
  • Jack Bauer

    :o))
    Good question...but if they don't go through with it (lifting the restrictions), how are we going to find out ? On the other hand, misuse of all things that are public, and private, already seems to be a chronic characteristic of Brazilian culture....foreigners investing in Brazil will be the least of its problems...

    Feb 01st, 2017 - 03:45 pm 0
  • :o))

    The Question is: Can Brazil avoid the misuse REF: Suspensão da venda da BR Distribuidora pela Petrobras: http://br.reuters.com/article/domesticNews/idBRKBN15F2MA?feedType=RSS&feedName=domesticNews&utm_source=dlvr.it&utm_medium=twitter | AND MANY OTHER “PAST RECORDS”!

    Feb 01st, 2017 - 06:19 pm 0
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