Brazil

On September 17, 2025, Brazil enacted the Digital Statute of the Child and Adolescent (“Digital ECA”), establishing a pioneering regulatory framework for protecting children (under 12 years of age) and adolescents (between the ages of 12 and 18) online. Brazil’s Congress approved the new law in a matter of just a few days in response to parents’ pressure, after a well-known Brazilian digital influencer published a series of online videos on the “adultization” of children on the internet.Continue Reading Brazil Adopts Law Protecting Minors Online

Brazil’s National Institute of Intellectual Property (“INPI”) initiated a public consultation on new guidance for the review of patent applications related to artificial intelligence (“AI”). The draft guidance document consolidates three previous INPI regulations and best practices adopted by other patent offices.

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Continue Reading Brazilian Government Opens Consultation on Artificial Intelligence-Related Patent Applications
  • In a July 9 letter sent to his Brazilian counterpart, President Trump vowed to impose a 50% tariff on “any and all Brazilian products” imported into the United States, effective August 1. He also previewed the initiation on July 15 of a U.S. investigation under Section 301 of
… Continue Reading U.S. Tariffs and Brazil’s Potential Response: A Guide for Businesses

Four Internet of Things (IoT) related tax relief provisions are due to expire on December 31, 2025.  Two bills were introduced in Brazil’s National Congress to extend these provisions and are currently in debate under a fast-track rule.  Companies that provide and implement IoT projects can engage congressional leaders to…

Continue Reading Brazil’s Internet of Things Tax Relief Due to Expire in 2025

Executive Summary

  • Artificial intelligence (AI), social media, and instant messaging regulation will be a hot topic in Brazil in 2025, with substantial activity in Congress and the Supreme Court.
  • Cloud, cybersecurity, data centers, and data privacy are topics that could also see legislative or regulatory action throughout the year at different policymaking stages.
  • Technology companies will also be affected by horizontal and sector-specific tax policy-related measures, and Brazil’s digital policy might be impacted by U.S.-Brazil relations under the new Trump administration.

Analysis

2025 is shaping up to be a key year for digital policymaking in Brazil.  It is the last year for President Luiz Inácio Lula da Silva’s administration to pursue substantial policy change before the 2026 general elections.  It is also the first year for the new congressional leadership, in particular the new Speaker of the House and President of the Senate, to put their stamp on key legislation before their own reelection campaigns next year.

Existing Legal Framework: LGT, MCI and LGPD

Brazil’s current approach to digital policy is based on three key federal statutes.  The first one is the General Telecommunications Act of 1997 (“LGT”).  LGT established the rules for the country’s transition from a state-owned monopoly to a competitive, private sector-led telecommunications market.  It is the bedrock of Brazil’s digital economy infrastructure regulation as, among other aspects, it sets rules for radio spectrum and orbit uses.

The second key statute is the Civil Rights Framework for the Internet Act of 2014 (“MCI”).  MCI sets the principles, rights and obligations for internet use, including the net neutrality principle and a safe harbor clause protecting internet service providers from liability for user-generated content absent a court order to remove the content.  The statute also established the first layer of data privacy provisions as well as rules for the federal, state, and local governments internet-related policies and actions.

The third key federal statute is the General Personal Data Protection Act of 2018 (“LGPD”).  LGPD sets rules for the treatment of personal data by individuals, companies, state-owned and state-supported enterprises, and governments.  It slightly amends MCI and adds a more robust layer of data privacy protection.

Each statute has its own regulator, respectively the National Telecommunications Agency (“ANATEL”), Brazil’s Internet Management Committee (“CGI.br”), and the National Data Protection Authority (“ANPD”).

Hot Topics in 2025: AI, Social Media, and Instant Messaging

Two agenda items will likely dominate the policy debate in Brazil in 2025.  The first one is the creation of a new legal framework for AI.  After years of intense debate, the Senate approved its AI bill in December 2024.  The bill sets rights and obligations for developers, deployers, and distributors of AI systems, and takes a human rights, risk management, and transparency approach to regulating AI-related activity.  It also contains contentious provisions establishing AI-related copyright obligations.  In 2025, the House will likely debate and try to approve the bill, which is also a priority for the Lula administration.Continue Reading Brazil’s Digital Policy in 2025: AI, Cloud, Cyber, Data Centers, and Social Media

Executive Summary

  • President Luiz Inácio Lula da Silva concluded his second year with contradicting economic results: high GDP growth and low unemployment combined with rising inflation, high interest rates, and a record devaluation of the Brazilian currency.
  • The Lula administration’s strategy put the country’s fiscal framework in peril and left economic policy agenda items unfinished, while its democracy-strengthening agenda remained largely paralyzed.  There were mixed results in President Lula’s foreign policy.
  • Congress continued to approve economic modernization bills, focusing on sector-specific frameworks and in the implementation of the 2023 historic consumption tax system reform.
  • Companies doing business in Brazil should pay attention to the implementation of the 2023 tax reform, as well as to a proposed new income tax reform.  They should also pay attention to further congressional activity on AI, cybersecurity, social media, and regulatory agencies, among others.

Analysis

President Luiz Inácio Lula da Silva’s main goal in 2024 was to deliver a strong economic performance that could be translated into positive political results for his party and allies in the mid-term local elections.  These elections were a crucial stepping stone towards his likely reelection campaign in 2026.

Contradictory Economic Results

Market players began 2024 expecting Brazil to grow 1.52 percent, an economic slowdown from the 2.92 percent GDP growth in 2023.  By December, these expectations improved to 3.42 percent, pointing to an accelerating economy.

At the same time, these players began 2024 expecting annual inflation to be 3.90 percent, within the inflation target’s upper range of 3 to 4.5 percent.  However, by December, expectations deteriorated to 4.89 percent.  The official inflation was confirmed at 4.83 percent, an annual increase above the target ceiling.Continue Reading Brazil Under Lula: The Second Year

Executive Summary

  • On November 27, Brazil’s Finance Minister Fernando Haddad announced a package of spending cut measures and the outline of an income tax reform.  The package was a reaction to market unease over the perceived weakness of the country’s fiscal framework, which built up over the past year.
  • The announced spending cuts were poorly received by market players prompting the Brazilian real to reach a record devaluation against the U.S. dollar.  They perceived the announcements as lacking spending cut ambition and including future spending through income tax exemption.  There is also uncertain congressional support and no fixed timeframe for the approval of these measures.
  • Investors might reap short-term gains from the heated economy and low-priced assets in Brazil, but a fiscal framework in peril points to medium-term problems, including high inflation and reduced economic growth.

Analysis

On November 27 and after two months of internal government discussions, Brazil’s Finance Minister Fernando Haddad announced a package of spending cuts in an effort to rescue the country’s fiscal framework.  In addition, Haddad announced President Luiz Inácio Lula da Silva’s administration proposal for an income tax reform.

The following day, Haddad and five other ministers provided details on these measures.  The package was not well-received by market players, with the Brazilian real reaching a record devaluation against the U.S. dollar.

Brazil’s fiscal framework, proposed by the Lula administration in March 2023 and approved by Congress in August 2023, has been progressively weakened due to the Brazilian federal government’s lax fiscal policy and refusal to address structural spending issues.Continue Reading Brazil’s Fiscal Framework in Peril: Impact on Businesses

Executive Summary

  • Nation-wide elections for mayors and city councilors will likely impact Brazil’s national politics, its federal government, and the upcoming elections for the Speaker of the House and President of the Senate – all of them relevant for investors.
  • The local elections will be seen as a referendum on President Luiz Inácio Lula da Silva’s policies, as well as a test of the opposition’s strength, including former President Jair Bolsonaro’s current political standing.
  • The outcome of these elections might impact the Lula administration’s policy trajectory, the strength of the pro-business majority in Brazil’s National Congress, and the functioning of federal regulatory agencies in 11 key economic sectors.

Analysis

On October 6, Brazil will hold its nation-wide elections for mayors and city councilors.  All 5,569 Brazilian cities will elect the head of the local executive branch, as well as all city council members for a four-year term.

While this electoral cycle focuses on local issues, and mayors and city councilors have a limited policy impact on businesses, the local elections will likely have a significant impact on national politics, the federal government, and the upcoming elections for the Speaker of the House of Deputies and the President of the Federal Senate – all of them relevant to investors.

Impact on federal government

Election watchers will be looking at the performance of the main political groups based on three indicators: the total number of mayors and city councilors they elect; wins in the 27 state capitals; and wins in the so-called “G103”, the 103 cities with a population of more than 200,000.

If the election results in a larger number of mayors and city councilors formally supported by President Luiz Inácio Lula da Silva, this will likely be seen as voters’ endorsement of his policies.  While voters might not focus on specific policies – including, among other aspects, a lax fiscal policy, increased taxation, and state capitalism-type measures – individual perceptions on cost of living and economic prosperity tend to play a role in voting decisions.  In this scenario, the Lula administration will likely continue its current policy trajectory.  However, if the total number of mayors and city councilors supported by the president is equal to or lower than the existing number, the result will probably be seen as a rebuke of the Lula administration and might result in pressure to change current policies.Continue Reading Impact of Brazil’s Local Elections on Businesses

On August 23, 2024, the Brazilian Data Protection Authority (“ANPD”) published Resolution 19/2024, approving the Regulation on international data transfers and the content of standard contractual clauses (the “Regulation”).  The Regulation implements the international data transfer framework under the Brazilian General Data Protection Law (“LGPD”).

Under the LGPD, international data transfers from Brazil to a third country are permitted if: (i) the ANPD recognizes the third country as providing adequate protection for personal data; (ii) the data exporter and data importer enter into standard contractual clauses (“SCCs”), binding corporate rules, or special contractual clauses; or (iii) one of the specific cases listed in the LGPD applies (e.g., the transfer is necessary to protect the life of the data subject, the data subject consents to the transfer, or the ANPD authorizes the transfer).  The Regulation relates to the data transfer instruments mentioned in (i) and (ii).

Standard Contractual Clauses
The Regulation approves and publishes SCCs for the transfer of personal data outside of Brazil without ANPD’s authorization.  The SCCs cover both controller-to-controller and controller-to-processor international data transfers.  Like the EU SCCs, they are contracts signed between the data exporter (in Brazil) and the data importer (in a third country).  The parties may not modify them.  The ANPD may allow the transfer of personal data outside of Brazil on the basis of “equivalent SCCs” adopted by third countries, provided that they are compatible with the LGPD.  The ANPD has not (yet) indicated that it would recognize the EU SCCs as equivalent.

Brazilian controllers that use contractual clauses to transfer personal data internationally must replace those contracts with the newly published SCCs by August 22, 2025.Continue Reading Brazil Issues New Regulation on International Data Transfers

Executive Summary

  • President Luiz Inácio Lula da Silva’s administration has pursued a vigorous effort to increase revenue as part of Brazil’s fiscal framework implementation.  At the same time, the administration has avoided spending cuts.
  • This strategy seems to be reaching its political limit, creating an incentive for the administration to weaken the fiscal framework approved by Brazil’s National Congress last year.
  • This sends mixed signals to investors and results in an overburdened monetary policy, which may lead to reduced investment, growth, and job creation in the medium term.

Analysis

On August 30, 2023, President Luiz Inácio Lula da Silva signed into law Brazil’s new fiscal framework.  The framework was presented by his administration in March last year, and approved by Brazil’s National Congress in less than five months.  It was the administration’s top economic policy priority to stabilize public debt, create an incentive for the Central Bank to reduce the benchmark interest rate, and reignite economic growth and job creation.  It was also highly anticipated by market players to assess the administration’s commitment to fiscal responsibility.

Framework Mechanics

The framework established a “fiscal anchor” based on an annual primary budget surplus target, beginning with a deficit of 0.5 percent of GDP in 2023 and growing in 0.5 pp increments per year until reaching a surplus of 1.0 percent of GDP in 2026.  It is a linear trajectory to put the country’s fiscal policy back in a scenario of annual primary budget surpluses (i.e., excluding debt servicing.)  These targets were codified in the 2024 annual budget authorization legislation signed into law on December 29, 2023.Continue Reading Brazil’s Weakening Fiscal Framework and its Impact on Businesses