Brazil 4 Business

Tocantins

The GDP of Tocantins is approximately R$ 25 billion and revenues are from services (~ 60%) and industry (~ 27%). With equivalent territory of Italy, it is among the top 10 states in size, but in terms of population is one of the 5 smallest. Until 1988 it was part of the state of Goias, when it was emancipated, becoming an independent unit of the federation, attributing to the state its construction economy status, with concentration points on income.

The capital is Palmas with 230.000 inhabitants and has the same GDP per capita equivalent to the cities of the South and Southeast. Thus, the consumer market is demanding and request good quality products.
 
The main reasons for investments in Tocantins are:
 

  • Various tax incentives for the supply of resources to the industry;
  • Economy developing rapidly in the metropolitan region of Palmas;
  • Government interest in developing the remotest regions of the state;
  • Industry with low level of development, implicating opportunities in different sectors

As follows, you have the industry sectors that besides the mentioned factors, have specific incentive programs.
 
Rubber and Plastic goods: Tocantins is among the largest natural rubber producers in Brazil. Given that the market for these goods in a primary stage is very unstable, the government has particular interest in setting up companies capable of processing the product and adding value to the chain.
 
Automobile: By having access to several states in the North, Northeast and Southeast, Tocantins provides good positioning to drain the automobile production. In addition, it identifies good possibilities of attracting suppliers of auto parts companies.
 
Food and Beverages: Besides the consumer market booming, the state's position, with direct access to the agricultural production of the Central-West, provides the chance to benefit from grains and others. In turn, the logistics network and ICMS related incentives facilitate the flow of large excesses.
 
Cement: Several infrastructure works are happening in the region today and currently the resources are imported from other regions. There are projects planned until 2022. In addition, housing policies are in evidence in the state.
 
Pesticides: Approximately half of the state’s territory is considered as fertile land; besides having plenty of water, generating very high agricultural potential. Consequently, the need for pesticides follows this trend and is currently supplied by states in the Southeast region. Being very close to highly productive regions in Bahia and Goias, the market for this resource extends even further.
 
Other Non-Metallic Mineral Products: The state presents good non-metallic mineral reserves, especially used in construction, such as sand, clay, crushed rocks and gravel, which are already in operation.
 
Textiles: The textile sector has low development throughout the northern region. Like this, by the proximity to these states, Tocantins has logistical advantages against the Southeast, for example.

The government of Tocantins set up two programs with well-established policy incentives:
 

  • PROINDÚSTRIA – program that grants tax (ICMS) exemption to the companies already in the state taking part in various operations such as buying raw materials, sales to government agencies, buying assets for the industry and use of electricity. These benefits are applicable to the implementation of projects and industrial expansion;
  • PROSPERAR – program with similar benefits to the above, but with greater focus on attracting new investments not yet present. Because of this, the reduction percentage can be high.