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STATES

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Sponsor: Despite the economic crisis that challenges , Pernambuco has been working to secure its achievements. Between 2015 and 2016, we enabled 90 new private investment projects. In addition to the strategic location, we have a comprehensive policy of state incentives. Our attractiveness is reinforced by the investment in professional training that prepares our people through the network of state vocational schools and partners, so that the population is integrated to the new ventures.

PAULO HENRIQUE SARAIVA CÂMARA GOVERNOR OF THE STATE OF PERNAMBUCO

Pernambuco is the geographic center of the Northeast and stands out in the logistics sector. The Suape Complex, connected to the main shipping sea routes, is one of the best public ports in the . Our airport connects to several and is the second best in Brazil. The Transnordestina Railway is going to connect us with several productive hubs. Promoting development in other areas away from is one of the priorities of the , which offers incentives for the ones who invest outside the metropolitan .

RAUL JEAN LOUIS HENRY JUNIOR VICE GOVERNOR OF THE STATE AND SECRETARY OF ECONOMIC DEVELOPMENT

American Chamber of Commerce for Brazil - AMCHAM International Affairs Department Brazil, 2017/2018

*This guide is part of the project ACKNOWLEDGMENTS

The Chamber of Commerce for Brazil, being the largest Amcham outside the is serving its members building bridges for Brazilian businesses worldwide. Our foreign investment attraction efforts are a key mission for Amcham. The “How To” guides published by Amcham are part of this initiative. With the support of some of our members and Brazilian States and cities, we are putting together strategic information on the most various aspects of doing business in Brazil and its opportunities. As part of (Brazil, , , and Africa) and representing the 9th largest economy of the , and the 6th largest destination for foreign investment, Brazil has an intrinsic importance for the global market. More than ever it is a strategic time for businesses opportunities in Brazil. We welcome you and hope that the information you are about to read will contribute to your commercial and investment decisions linked to Brazil.

Deborah Vieitas - CEO, Amcham Brasil

Between 2007 and 2016, the state of Pernambuco managed to attract more than BRL 21.1 billion in investments that generated more than 85,000 jobs from the coast to the hinterlands, according to numbers from the Pernambuco Development Program (Prodepe). That allowed the state to grow at a yearly rate of 4.7% over a seven-year period, well above the national average for Brazil. The 497-mile radius around Recife covers seven of the state capitals in the Northeast region, six international airports, ten international ports, and accounts for 90% of GDP in the region. Pernambuco also boasts a strategic location, at a shorter distance from , Africa and than most Brazilian states. Thirty industrial offer the infrastructure required for factories that generate jobs and development to local citizens. The state also stands out for its Services Hub, located in Recife’s Commercial , which is comprised of industrial facilities, , tech companies, several and a cultural market. All of these ingredients make Pernambuco the perfect place to welcome new production and infrastructure investments, backed by a state government that is intent on generating a competitive environment and fostering a positive business environment.

Jenner Guimarães Rêgo - CEO, Economic Development Agency of Pernambuco STATES CONTENT

01 INTRODUCTION: ABOUT PERNAMBUCO 06

02 HISTORY, CULTURE AND 08

03 THE 12 DEVELOPMENT 10

04 INFRASTRUCTURE 11

05 INTERNATIONAL ECONOMY AND TRADE 14

06 INCENTIVES 18

07 EDUCATION 19

08 ENVIRONMENT AND 21

09 INNOVATION, RESEARCH & DEVELOPMENT AND BUSINESS HUBS 22

10 ABOUT OUR SPONSOR 28 01. INTRODUCTION: ABOUT PERNAMBUCO

Known for its natural beauty, cultural diversity and The state features several development hubs that spread hospitable people, Pernambuco has been a major driver of from the docks to the hinterlands, supported by a modern economic growth for the Northeast and for Brazil, with a and bold public administration. Infrastructure projects total GDP of BRL 155.143 billion in 2015, according to the on-going have been generating new advances. Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística - IBGE). Occupying The few pages of this guide will help you learn an of 38,000 square miles, the state attracts not only more about the state and understand why its outlook tourists but also investors from all over the world, due to is so promising to investors. Many have already been a fertile and diverse business environment. convinced of the benefits Pernambuco offers. STATES

06 Source: IBGE/CondepeFidem 1 -Book: “EconomiaPernambucana noséculo XVI” Source: EconomicDevelopment Agency ofPernambuco century worldwide recognition as early as in the sixteenth Pernambuco’s geographical position hadalreadygained As notedbyhistorian Manuel Correia de , STRATEGIC LOCATION to North America, Africa andEurope.Inaddition,its miles of coastline and is on the main sea and air routes Europe.” The state has almost 125 to closest the was it 1 : “Ships preferred the Pernambuco shore because 497 miles n ter 6 ilo ihbtns con fr 0 of 90% for account inhabitants million regional GDP 36 their and radius fromitscapital Recife. Together, thesecities other Northeasternstatecapitals are within a497-mile Its centrality in itsfavor:seven in theregionalsoworks the entireNortheastregion. strategic location makes it a perfect distribution hub for 90% of Northeast GDP 90% ofNortheast 36 millioninhabitants 10 seaports international airports 6 international 7 state capitals .

07 HOW TO INVEST IN PERNAMBUCO 08 STATES values adaptations and finding different solutions to solutions different finding and adaptations values shines throughinthediversityofapopularculturethat people’s blood. The spiritofresilienceandinnovation Conquests andcentenarystrugglesrunthroughits exciting pageofhistoryforPernambucoandBrazil. capitania que deu certo). That washowstartedanew and a Pernambuco, de Pioneirismos Land of Santa Cruz (Os before Pedro ÁlvaresCabral, in whatwould beknownas Vicente Pinzón arrived at Santo Agostinho , Cavalcanti, it was January1500whenSpanishnavigator According tosomehistorians, including Carlos Bezerra BUSINESS OPPORTUNITIES HISTORY, CULTURE ANDTOURISMAS Source: CarneirosBeach. Flickr. HISTORY, CULTURE ANDTOURISM natives canoffer. to theservicesandskilledlaborthatonlyPernambuco made feasible by economic and technological advances historical roots, andcontinue withthenewpossibilities The opportunitiesinPernambucobeginwiththestate’s kind regionsandtours,fromthe coast tothe hinterland. from to South,historical cities, listed heritage sites, one-of-a- North beaches beauty, natural with filled state A many otherculturalexpressions. types ofmusicasmaracatu, Mestre Vitalino andotherlocalcraftsmen,thedifferent Gonzaga, thefolkpoetryofcordel literature,theartof home to so many culturaltreasuresas: the baião of Luiz difficult problems. This is the reason why thestate is , manguebeat andso 02. tourists fromalloverthe world. According todata Pernambuco anextremely attractive destination for Its rich culture and unparalleled natural beauty make Source: PortodeGalinhasBeach.Flickr. of whomwereEuropean. approximately 70,000 international touristsin2015,70% from Brazil’s Ministryof Tourism, thestatewelcomed

09 HOW TO INVEST IN PERNAMBUCO 10 STATES

mechanisms that allowforpublicconsultation and state’s publicadministration. The modelalsocontains practices commonly usedinprivateenterprise tothe Pernambuco”, which seeks toemploy some management as “Allfor has beenpromotedthroughaprogramknown Over the last few years, development in Pernambuco Source: Economic Development Agency ofPernambuco. THE 12DEVELOPMENTREGIONS United NationsPublicService Award. several Brazilian states,inadditiontowinningthe2012 to itspotential. The has servedasabenchmark for aligning thestrategicdevelopment of each region (RDs), meetings heldacrossthestate’scity hall 12DevelopmentRegions local through priorities define to participation 03. INFRASTRUCTURE 04. 2 -Source: Civil Aviation Department. Available at:www.aviacao.gov.br/noticias/2015/04/passageiros-escolhem-o-aeroporto-do-recife--o-melhor-do-brasil for fasterintegration between severalproductiveareas, access tothe Suape complex. These workswill allow to BR-101,whichwillimprove and roadworks thestate capital, BR-232 highwayduplication toward hinterland, in of flow the enhance will which Arc, as a concession forconstruction of the Metropolitan by theLogisticsInvestment Program (called PIL), such paved roads. Other projects are currently under analysis have madeeverylocality within thestateaccessible by highways andonthe completion of newprojects that on maintaining main assets,duetoanemphasis existing welcome The state’sland transportinfrastructureis oneofits to ready area total of miles new businesses. square 13.1 has in theRecife Metropolitan Region. Overall, the state to welcomenewventures–13ofwhicharelocated The statehasmorethan30industrialdistrictsready Hinterland Channel. production hubs:theMetropolitan Arc and the Railway, which willconnecttheNortheast’s leading projects togetunderway, includingthe Transnordestina The attractionofnewinvestmentshasallowedmajor LAND INFRASTRUCTURE ( according todatabytheBrazilian Airport Infrastructure a currentcapacityof16.5millionpassengersyear, 6%). The GilbertoFreyreInternational Airport has America and around the world (both grew nearly to 2015,keepingupwiththegrowingtrendinLatin compared 2%increase a recorded Pernambuco traffic, In 2016,whileBrazilsawa7.4%declineinpassenger and departures. landings between flights, scheduled daily 156 of average the GilbertoFreyreInternational Airport operatesan given bytheBrazilian Civil Aviation Secretary. Currently, named “Aeroporto +Brasil”, the most prestigious award throughout theState. promoting qualityoflifeandeconomic development Northeast statecapitals. 24 different cities,andistheonlyairline to connect all for Azul Linhas Aéreas, which operates 32 daily flights to Recife’s international airport has alsobeenchosenasahub Aeroportuária -). a passengersurvey. In2015 Airport hasbeenchosenasthebestBrazilian airport by The AIR INFRASTRUCTURE Recife/ -GilbertoFreyreInternational mrs Baier d Infraestrutura de Brasileira Empresa 2 , theRecife terminal was

11 HOW TO INVEST IN PERNAMBUCO 12 STATES current capacityisof1.5millionpassengersayear. the São FranciscoRiver region andsurroundingarea. Its Nilo Coelhohelpsmeettheexportdemandforfruitfrom landing strip anda21,500-squarefeet cargo terminal, the Nilo Coelho International Airport. With a two-mile Another majorairportinPernambucoisPetrolina-Senador INTERNATIONAL DESTINATIONS (DIRECTFLIGHTS) and cargo. addition to the security needed to safeguard passengers berths andstorage space(warehouses andyards),in Port of Recife offers calm waters for mooring, also receives cruise ships at its passenger terminal. The import andexportofdomestic andforeigncargo. The Port of services to deep sea shipsandshort shipping for the The main activities of the Port of Recife are the provision (SEAPORTS) MARITIME INFRASTRUCTURE PORT OFRECIFE PORT TAP Cabo Verde TACV Meridiana Brasil Latam Linhas Aéreas Gol Condor Airlines Linhas Aéreas Azul ais ad rvds ces o ecsr n international trade routes. and to access provides and radius, Piauí, and Bahiaalllocatedwithin a620-mile states ofParaíba,RioGrande doNorte, , , nearly theentireNortheast regionofBrazil,withthe the state’s interiorandcoastalregions. The Portserves the shortestdistancestodistribution centersthatserve access tokeysiteswithinthemetropolitanarea, with within thecapitalofPernambuco,itoffers strategic differentials. Becauseitislocatedinanurbancenter The locationofPortRecifeisoneitsmain to 25,000tonsofgrain,each. 50,000 tons).Inadditiontoportsilosthatcanstore up TEUs) andgeneralcargo yards(withcapacityfor tons), containeryards(whichcanhandleupto6,000 warehouses (withcapacityforapproximately60,000 cargo storagespaceavailable,dividedintoindoor eight shipsatatime.Ithas1,227,000squarefeetof The PortofRecifehasthecapacitytoaccommodate andMiami Buenos Aires andMontevideo City Frankfurt Orlando DESTINATION VOLUME OF CARGO HANDLED BY THE PORT OFRECIFE(TONS) VOLUME OFCARGOHANDLEDBYTHEPORT leading investment destination and has been effectively The SuapePort andIndustrialComplex isoneofBrazil’s Flanges Brasil. manufacturers Gestamp, LM andGRI features that hub equipment power wind a and ; hub comprisedbythe Atlântico Sul and Vard Promar maritime a Ghisolfi; & Mossi and Suape is partofapetrochemical complex that also features which Refinery, e Abreu the include projects Such significant amount of jobs and a high level of investment. build anentireindustrywithinthestate,generating a few years–inother words, businessesthat have helped attract a series ofcornerstone enterprises over the last preservation areas. These attributes have helped Suape and servicesareas,aswellenvironmental and cultural square miles divided into port, industrial, administrative The industrialcomplexandthePortofSuapeoccupy52.1 North andNortheastregionsofBrazil. busiest portforcontainersandliquidbulkcargo inthe a widerangeofeconomic sectors. Itisconsidered the other firms currently building their facilities, representing more than150companiesalreadyinoperationand45 The PortofSuapeishometoanindustrialcomplexwith Source: PortofRecifeNewsletter. PORT OFSUAPE PORT Mercosur Deep Sea Short SeaShipping TRADE ROUTE 1,295,148 181,998 2014 35,037 all-time record sinceitsfirstyearofoperation in1978. which represents a14.98%increasefrom 2015,andan Suape handled 22.685 million tons of cargo in2016, constructive andenvironmental offsetting policy. the SuapeComplexhasadoptedapreventive, in the1970s, the Renewable Energy Equipment Hub. Since its creation and Metalworking Hub, the Maritime and Offshore Huband theSteel Hub, Petrochemical the Refinery, Lima comprise development hubs, suchasthe Abreu and The companiesintheSuapePortandIndustrial Complex wide rangeofbusinesses. treated water. The Complex offers conditions for a have supplyofnatural gas, electricity, rawwaterand constantly being upgraded,andinaddition, its facilities and highwaysthatare infrastructure, withrailways The complex relies on aproprietary land transport distributor ofcargo. Suape hasbeenstandingoutasamajordestinationand Africa. Portactivityhasbeenrisingatafastpace,and with direct shipping routestoEurope, North America and routes, it connects with over 160 ports on every , Strategically located along some ofthe world’s main trade 50 to 65 feet, as well as great potential for expansion. Its moderninfrastructureoffers waterdepthsrangingfrom serving as agrowthengine for the state of Pernambuco. 1,125,460 268,013 2015 16,787 2016 640,045 821,284 68,709

13 HOW TO INVEST IN PERNAMBUCO 14 STATES

PERNAMBUCO’S TRADEBALANCE by industryandagriculture. Another important sector for economy is basedmainly on the sector, followed SEPLAG),Pernambuco’s - Pernambuco de Gestão Estado do e Planejamento de Management (Secretaria According to the State Department of Planning and Source: MDIC,2016 dollars In USbillion -8 -6 -4 -2 0 2 4 6 8 2006 2007 2008 INTERNATIONAL ECONOMYANDTRADE 2009 2010 2011 2012 to checkinthegraphbelow. still importsmoreproductsthanexports,asitispossible Despite all the progressinexportsofPernambuco, it for 1.6%ofGDP andgeneratedmorethan20,000jobs. the state is 2013 Creative Economy, which, in 2015 accounted 2014 2015 2016 Balance Import Export 05. PERNAMBUCO’S EXPORTS Ministério da Indústria, Comércio Indústria, da Trade and Services (Ministério Recent datafromBrazil’s MinistryofIndustry, Foreign .raw was product than in the past,when its main exported Pernambuco’s exports are currently much more diversified EXPORTS Source: MDIC,2016 PACKING ACCESSORIES, OFBASE METAL STOPPERS, CAPS AND LIDS AND OTHER FRESH GRAPES OTHER CANE SUGAR , FRESHORDRIED PURE , INSOLID FORM OTHER CANE ORBEETSUGARS, CHEM. DIESEL FUEL PASSENGERS ENGINE, 1500

SHARE (%) 13.21 16.91 13.16 3.26 3.86 4.35 5.51 6.29 8.23 2.74

15 HOW TO INVEST IN PERNAMBUCO 16 STATES or finishedproductsbylocalmanufacturers. industrial inputsthatwillbetransformedintointermediate feature itemsthataretraditionallycharacterized as Following the state’s developingtrend,the list of imports IMPORTS Source: MDIC,2016 two countries: andtheUnitedStates. As foritsexport destinations, the next table shows that nearly 50% ofthe state’s exportsin 2016wereshippedtojust PERNAMBUCO’S IMPORTS DESTINATIONSPERNAMBUCO’S EXPORT OTHER GEARBOXES AVIATION KEROSENE FUEL OTHER LIQUEFIED PROPANE DIESEL FUEL DESCRIPTION DESTINATION SINGAPORE UNITED STATES ARGENTINA 381,006,652 USD FOB 323,144,807 118,824,554 98,955,521 44,737,046

products in2016were: topimported the and composition, imports diversified According to the MDIC, Pernambuco has a well 293,328,657 358,449,945 345,131,051 USD FOB 196,918,113 SHARE (%) 22.79 26.87 6.98 8.38 3.16 SHARE (%) 4.43 6.59 8.06 .76 7 7. Source: MDIC,2016 main tradingpartnersforimports,asthesourcesofalmost Argentina and theUnited StatesarealsoPernambuco’s that, aswasthecasewithexports, MDIC datashows PERNAMBUCO’S IMPORT ORIGIN PERNAMBUCO’S IMPORT Source: MDIC,2016 P-XYLENE CHAP. 87 VEHICLES, 1500

17 HOW TO INVEST IN PERNAMBUCO 06. TAX INCENTIVES

Pernambuco offers a wide variety of fiscal benefits at the minerals, plastics, , pharmaceuticals, federal, state and municipal levels, aimed at making the hygiene and cleaning; state more attractive to private investment. Requirements for eligibility vary by industry, type of investment and •AProdinpe – Pernambuco Maritime Industry number of jobs generated, but the main characteristics of Development Program: offers ICMS incentives the state’s tax incentive programs are described below: for manufacturers of ships and oil platforms, as well as for the industry’s entire supply chain; •AProdepe – Pernambuco Economic •AProdeauto – Automotive Industry Development Program: offers tax benefits for Development Program: offers several ICMS industrial activities and distribution centers, as well incentives for manufacturers of motor vehicles as implementation or expansion of investments in (automobiles, motorcycles, trucks, buses, various economic sectors. The presumed State and others), as well as for the industry’s entire Value-Added Tax (Imposto Sobre Circulação supply chain; and De Mercadorias E Prestação De Serviços - ICMS) credits are adjusted progressively •ARenewable Energy Incentive Program: according to the location of the investment. In provides ICMS incentives for manufacturers of order to be eligible for the incentives, businesses wind power (turbines, towers, blades) and solar must operate in the following priority industries: power (solar panels) generation equipment, as agro-industry, metalworking, electronics, well as for the suppliers of parts and components beverages, textiles and clothing, non-metallic in these industries. STATES 18 07. EDUCATION strategy isbasedontwofronts:meeting the demand and privateschoolsinallofBrazil. The educational 3 -INEP isamajorstakeholder andeducationalpolicy-maker, responsibleforthecontinuity ofeducationalqualityimprovements. Pesquisas INEP) Teixeira- e Anísio Educacionais Estudos de Nacional Teixeira (Instituto Institute forEducational Studies andResearch Anisio and currently has the lowest disparity between National schooling in morethan 300 public education institutions, for eachschool.Inaddition, Pernambuco offers full-time and theestablishment of goalsandperformance bonuses field, the in professionals other and teachers for policies administration principles, recognitionandincentive Educação of adevelopment modelfocusedonpeople, modern da Ideb). This leadership position is the result - Desenvolvimento Básica de Index (Índice according to the2016BasicEducation Development The statehasthebestpubliceducation system inBrazil, EDUCATION 3 scores for public other institutionsthatprovides In addition,thestate’s educational systemfeaturesseveral Ranking publishedbyINEP. skills. Pernambucowas1 students with important professional and entrepreneurial schools, aswell as sixtechnological centers that provide in the country. Pernambuco also has 27 state vocational of Pernambuco asoneofthe10bestfederal universities The 2016QSUniversityRankinglistsFederal MEC). - Educação da Ministry ofEducation (Ministério education institutionslicensedandauthorizedbythe areas of academic research. In all, there are 107 higher The state’s universities are regional leaders inseveral and productivitydriver. having education serve as the leading competitiveness and state, the into flowing investment the by generated st placeinthe2015IdebNational upport toitsstudents:

19 HOW TO INVEST IN PERNAMBUCO 20 STATES In addition,Pernambucoishometosixmajoruniversities: • ; and • Pernambuco; • • and vocationaleducation; high school,specialeducation, supplementary , pre-school, elementary school, • A A A A A 89 languageschoolsinthestate. 62 highereducation institutions intheRecife 417 highereducationinstitutionsin 84 vocational schoolsacrossthestate; 32,989 educationalinstitutionsbetween Technology ofPernambuco(IFPE). • (UNIVASF); and • (UFRPE); • • • • A A A A A A Federal InstituteofEducation,Scienceand Federal UniversityofSãoFrancisco Valley Federal RuralUniversityofPernambuco ofPernambuco(UPE–FCAP); Catholic (UNICAP); Federal University ofPernambuco(UFPE); 08. ENVIRONMENT ANDRENEWABLE ENERGY energy alsoincludes“SolarPE“,whichprovides totaling The state’s strategicplanforincentivestorenewable plants, photovoltaic 3 as well 75 MW incapacity. as MW, 272 of 10 otherwindfarms,foran additional installed capacity for a total capacity of 595.40MW. The state expects to add The state also has28windfarms currently in operation, 82 MW ininstalledcapacity. into operation in the next few years, and should add up to MW. 11 Newsolar plants are expected to go of capacity being operatedby Enel Green Power, with aninstalled industry. Today, the SolarFarmisalready of equipment, technology and knowledge for the the stateasageneratorofcleanenergy andaproducer planned andexecutedwiththepurposeofestablishing then, theprogramhasincorporatednewactionsthatare of 2013 by the Pernambuco State Government. Since production inBrazil,whichwascarried out attheend energy solar for tender public first-ever the of out born Sustainable PE isaforward-thinkingprogram thatwas 4 -FreeMarket: theconsumermay choosetoreceive energy suppliedby agenerator, orbyanenergy traderlocatedanywhereinthe country. consumers ofphotovoltaicenergy. Alternativas na América Latina - IDEAL) toacknowledge America for theDevelopment of Alternative Energies inLatin obtain the FreeMarket also currently responsible for authorizing companies to is Diper).TheTradingCompany AD - Pernambuco de Econômico Desenvolvimento de Pernambuco (Agência the guise ofthe Economic Development Agency of for thesaleofsolarenergy, whichiscurrentlyunder State Energy Trading Companywillberesponsible with thepublictenderheldinDecember2013, of theStateEnergy Trading Company. Inaccordance the NationalElectricity System authorizedthecreation the state’s productive sectors, theregulatory bodies of In ordertofosterconsumption ofrenewable energies in photovoltaic sources. funding topromotethegenerationofenergy from (Instituto para o Desenvolvimento de Energias de Desenvolvimento o para (Instituto 4 SolarSeal, issued bythe Institute

21 HOW TO INVEST IN PERNAMBUCO 22 STATES services, with internationalcertification andrecognition. for origin of region designated first world’s the also is It welcomed of Pernambuco’s rich culture take place, Digital has Located in the urban setting where the main manifestations of Pernambuco:Caruaruand . also spilledovertothetwolargest citiesinthecountryside moved intothearea. This effort tofosterinnovationhas urban spacethatwastransformedasnewenterprises center, PortoDigitaloccupies16million square feetof Located in the Santo Amaro district in Recife’s historic DIGITALPORTO (DIGITAL PORT) has ledtothecreationofnewbusinessesinseveralareas. from the docks to the hinterland. All of this innovation traditional production chains and promoted creative activities have added a new element to the state’s andother industry games the filmmaking, architecture, which hasemerged asavibrant creative center. Design, built in honoroflocal musical icon , and – and the Cais do Sertão Cultural Center and , Digital – oneofthe country’s leading technological of thesymbolsthisneweconomyincludePorto for thedevelopment of arobustcreative economy. Some diverse local culture makes Pernambuco an ideal place The recent economic growthcombinedwitharichand the regional offices of some major corporations. INNOVATION, RESEARCH &DEVELOPMENTAND Digital, suchas: Companies receive several benefits for setting up at Porto entrepreneurship industr provide infrastructure and support to the innovation and companies that offer related services andinstitutions that Center, ICT andcreative economy businesses,aswell and privatesectors,thePortoDigitalManagement BRL 45 million. The investments came from the public 257,344 square feet of space, at an estimated cost of There are works currently underway to renovate another feet ofrealestatethroughPortoDigital’s foundation. 106 million havebeeninvestedtorenovate 866,915square perimeter. Since its creation in 2000,approximately BRL Porto Digital invests torefurbishproperties along its creative economyventures. strengthening of innovative information technology and competitive conditions forthecreation,attraction and and a global model for technology parks byfostering the engine for Recife, a pillar of Pernambuco’s economy innovation environments, becoming a development benchmark inthemanagement ofentrepreneurshipand The mainobjectivesofPortoDigitalaretobecomea business channel forthecompanyin Recife, governance serves as a facilitator and single • A Lower transactioncosts:PortoDigital’s BUSINESS HUBS ies. 09. Warehouses locatedinCaruaruand Avenida Cruz Cabugá and Avenida Mario Melo), or in the as thesquareboundbyRua da Aurora, Avenida defined Norte, is which of latter (the district Amaro Santo the region: in the historic center of the Recife district and in industries, andbelocated within thepark’s designated and Communication Technology orCreative Economy Digital, companiesmustoperateintheInformation It isalsoworthnotingthat,inordertomoveintoPorto incubator withconsultancyservicesandothers. certifications, and infrastructure and urbanmobility improvements, training technical offering and theiremployees, geared towardsbusinesses Porto Digital’s governance develops projects • district; and that move intohistorical buildings intheRecife full exemption forupto10yearscompanies IPTU) rate, or - Urbano Territorial e Predial the Property Tax on UrbanReal Estate (Imposto • rate, from5%to2%; ISS) - Serviço Sobre Tax onServices(Imposto • information technologies; centers for researchanddevelopment of innovative company inclosecontact with leading national environment: beingatPortoDigital puts the • private sectors; streamlining relationship with thepublicand its A A A A Strengthening andcompetitivenessprojects: Property Taxreduction: 25%reductionin Tax onServicesreduction: reduction in the Presence inahighlydynamicinnovation Petrolina. primarily inthefollowingindustries: participate, those thatalready operateatthepark industries. While companies of all sectors areeligible to Porto Digital is home to companiesinawiderangeof for theservicesandprojectsoffered byNGPD. their requestisapproved,companiesareeligible to apply www.portodigital.org at Form available Boarding the out filling by NGPD) - Digital Porto do Gestão de Management Center (Núcleo must requesttheir“boarding pass” fromtheDigital Port Once ithasmoved into the PortoDigital, companies AREAS OF EXPERTISE AREAS OFEXPERTISE • • • • • • • • • • • • A A A A A A A A A A A A Web Development; Software Development; Hardware Development; Data and Analytics; Contact Center and Telecom; Consultancy andManagement; Computer Graphics; Cloud Computing,StorageandHosting; E-commerce; Film, and Animation; Mobile Applications; , InclusionandSustainability; andsubmitting it toNGPD. After

23 HOW TO INVEST IN PERNAMBUCO 24 STATES • Pattern Recognition; • • • • Marketing andSocialMedia; • • • • • • • A A A A A A A A A A A A Hardware Maintenance; Intellige Artificial IT Infrastructure; Marine and Mining Industries; 3D Printing; Content Management,Communications, Games andMultimedia; Photography; Engineering andRobotics; Energy; Education; Fashion Design; nce, NeuralNetworksand • • • • • • • • • • • • • A A A A A A A A A A A A A Training andCertification Tracking Systems; Software Testing; and Hospital and HealthSystems; Management Systems; IT Services, Software Factory and Outsourcing; Printing Services; Information Security; Access Provision; Cultural Productionand Tourism; Holdings; Music; Urban Mobility; . Source: PortoDigital. infrastructure andenhancingcompetitiveness: to improvethestate’s businessenvironment, providing partners – collectively known asthe Digital –help In addition toPortoDigital,otherimportant centers and AND PARTNERS IMPORTANT DIGITAL PARK CENTERS Creative Economy • • Development; • Institute; • Technology; • Software Technology; • University ofPernambuco; • projects forcompaniesinvarioussectors; through design and prototyping, to implementing the innovationprocess,fromideadevelopment, businesses. Itdevelopssolutionsforeach stage of center that creates ICT products,servicesand of PortoDigital. C.E.S.A.R isaprivate innovation leading innovation centers, it is one of the flagships and Technology (FINEP)asoneofthecountry’s Innovation Agency oftheMinistryScience Studies andSystems.ConsideredbytheBrazilian • A A A A A A A A Delta Zero Institute for the Development of PCR: Recife CityHall; SDEC: StateDepartment of Economic PMI PE:localchapterofProjectManagement SECTECI: Softex Recife:Recife Center forExcellence in CIN: ComputerCenter oftheFederal C.E.S.A.R: Recife Center for Advanced State Department of Science and ;

Amparo a Ciência e Tecnologia de Pernambuco - Facepe de Technology oftheState ofPernambuco(Fundação The Foundation for the Support of Science and development andeducational andresearchinstitutions. based enterprisesinPernambuco, integrating companies, are severalinitiatives in placetosupportinnovative- new sourcesofcompetitiveness withinaneconomy. There Research, development and innovation are key aspects of RESEARCH ANDDEVELOPMENT ICT researchanddevelopmentprojects. of the Information Technology Lawtoconduct beneficiaries are that companies MCTI),whichcanenterinto with agreements - Inovação e and Innovation (Ministério da Ciência, Tecnologia accredited by theMinistryofScience, Technology • (,Brazil);and centers located intheUSA,ItalyandBetim that willworkintegrated with othersimilar FCA and automotive engineering within Porto Digital a center for research, development, innovation • Information Technology Companies; • Pernambuco; • and Sustainability; • A A A A A A non-profit private foundation private non-profit A FITec: FCA: Chrysler Automobiles is setting up ASSESPRO: Brazilian Association of in office Culture of Ministry Office: MINC SEMAS: StateDepartment oftheEnvironment )

25 HOW TO INVEST IN PERNAMBUCO 26 STATES Growth inthenumber ofserviceindustryestablishmentsinPernambuco Source: MTEdatabase partnerships tofurtherdevelopthishub. direct jobs. The state is deeply committed to establish about 20,000patientsaday, generatingmore than20,000 largest inBrazil.Itoffers atotal of 8,200bedsandserves largest in the North and Northeast regions, and the second and diagnostic centers, Recife’s Medical Hub is the Composed ofmorethan 400 hospitals, clinics, laboratory INDUSTRY HUBS engineering, windandsolarenergy. focus oninformation technology, physics,, a with research, scientific of field the in leader national own and federal resources. Pernambuco is a regional and provides aseriesofgrantsandsubsidies,fundedbyits MEDICAL HUB 50,000 55,000 60,000 65,000 70,000 75,000 80,000 85,000 90,000 2007 2008 20092010 2011 2012 2013 2014 2015 60,133 62,317 65,760 67,649 from 60,000in2007to85,000in2015. 2015, and the number of establishments grew accordingly: service industry grewmorethan40%between 2007 and of growth significant a business andeventstourisminrecentyears. The state’s by led 2014, in 78% reached accounts forapproximately 70% ofthestate’s GDP, and Previdência MTE), Pernambuco’s service sector historically - Social e Trabalho do Employment (Ministério According todatafromtheMinistryofLaborand entire region. center, anditsserviceindustrysetsthestandardfor industrial, culinary, technological, cultural and university The capital of Pernambucoisamajor commercial, country. the in areas metropolitan largest five the of one With morethan3.8millioninhabitants,Recifeishometo SERVICES HUB SERVICES 72,779 74,568 79,169 82,570 85,311 is beingbuiltalongHighwayBR-101,tohouse A 393-acrePharmaceutical Hub inthecityofGoiana develop its Automotive Hub. state is continuously searching fornewventurestofurther region, with30companiesspecialized in theindustry. The track. There are also two othersupplyparkslocated in the park, a Research and Development Center and a testing Automotive Hubthatfeatures anintegrated supplier a year, Fiat Chrysler Automobiles (FCA) anchors an United States. With capacity to deliver250,000 vehicles the outside located factory Jeep first the of site the be to The region in the Norte was chosen andSantaCruzdoCapibaribe. in Pernambuco,mostofwhicharelocated in , than 22,000companies operating in theseindustries for thousandsofjobsacrossthe state. There are more The textile and garment industries are responsible PHARMACEUTICAL HUB AUTOMOTIVE HUB GARMENT HUB os Te tt i atvl sacig o nw etrs for ventures new for searching the hub. actively is state The jobs. expected to reach BRL 1 billion and generate 1,200 are currently under . The investments are operate atthesite,andcosmeticscompanyfacilities as well as suppliers.Hemobrásand White Martins already pharmaceutical, biotechnology and cosmetics companies, and Valedo SãoFrancisco. Ricard, inadditiontothewinemakersDãoSul,Botticelli Petrópolis (Itaipava), Coca-Cola, Cereser and Pernord Pernambuco, includingBrasilKirin, Ambev, Cervejaria Escada. Several drinks manufacturers already operate in fifth its started production facility in thestate,whichwillbelocated in has Unilever Meanwhile, Ajinomoto. conglomerates, such as BR Foods,Mondelez and Nissin already under construction. Producers include major food approximately 30 companies in operation or withfacilities and DrinksHuboccupies560acres,iscomposedof and foreign companies to thestate. At Suape,the Food the Northeasthasbeenincreasingly attracting Brazilian companies. Increased consumption of these items in Pernambuco iscurrentlyamajorhubforfoodanddrinks FOOD ANDDRINKSHUB

27 HOW TO INVEST IN PERNAMBUCO 28 STATES investment (FDI)attractionstrategyasthe4 Times, which named Pernambuco’s foreign direct development hasearnedtherecognitionofFinancial development. This proactivepolicytowardsfostering with staff selectionandtrainingthroughsupplychain all thesupportneededfornewventures,includinghelp attraction (InvestinPernambuco),Pernambucooffers In additiontoprovidingateamofexpertsininvestment agribusiness, ,serviceandhandicraftsectors. of Pernambuco by supportingthe state’s industrial, agency is to promote the economic and social development SDEC). The primaryobjective of the - Pernambuco ( under theStateDepartmentofEconomic Development public-private enterprise operated indirectly by the state The Economic Development Agency ofPernambuco isa Economic Development Agency ofPernambuco information aboutinvesting inthestate: The Agency also offers two platforms to disseminate 2016/2017). twiceconsecutively(2014/2015and ertra e eevliet Eoôio de Econômico Desenvolvimento de Secretaria th bestin Website: www.addiper.pe.gov.br Email: [email protected] Phone: +55(81)3181-7300 Recife –PEBrazil Av. RosaeSilva,347– Aflitos –52020-220 Pernambuco Agência deDesenvolvimentoEconômico de For furtherinformation,pleasecontact: www.atlasdoinvestidor.pe.gov.br www.investinpernambuco.pe.gov.br ABOUT OURSPONSOR 10. foundation for a creative economy, aswellforthe was developedover centuries today serves asasolid of producinggreattalents. Its immaterial heritage that built by variouscultural manifestations and byitstradition materialized into aricharchitectural and urbanensemble heritage, cultural and historical diversified and extensive Where thepastmeetsfuture. The statehasan can bedevelopedinthenearfuture. as cornerstonestonewindustries and supplychains that productive enterprises arrived andestablished themselves years, especially withregardstoindustrialactivity, asnew (to theSouth). This quality has been reinforced in recent hinterlands of (to theNorth)andSãoFrancisco twelve developmentregions,spreadfromthecoastto to atestament is the wide range of potentialities that are expressed in economy diversified Pernambuco’s potential forbusinessexpansion. established portandindustrial complexthat offers great of thePanama Canal. SUAPE isamodern and well- widening recent the with magnified was that advantage as ahubandtheproximitytolarge consumermarkets,an global integration, due to thePortofSuape’s condition state’s . The statealsohas greatpotential for center and allows itsmarket area to expand beyond the Northeast ofBrazil, which makesitaregional logistics Pernambuco enjoysastrategiclocation within the WHO ISINPERNAMBUCOALREADY INVEST, PRODUCEANDINNOVATE PERNAMBUCO: THEPERFECTPLACETO automotive industry’s footsteps. Pernambuco as a favorite destination, following inthe and businessresearch centers have recently chosen Several institutions supportinnovationwithinthestate, communication), amongothers. services (legal,economic/financial,management, medical andeducationalservices,provisionofbusiness such as activities for modern retail,consultiveengineering,advertising, ICT, growth significant is there but cities, alreadyoffer awiderangeofspecializedservices, and in particular its Metropolitan Area and larger inland economic sectorssuchasspecializedservices. The state, generates awiderangeofskillsthatareappliedin the countryandbestinregion. A structurethat within thestate,includingtenthbestuniversityin region forthemanyhighereducationinstitutionslocated important, PernambucostandsoutintheNortheast In aworldwherepeopledevelopmentisincreasingly in recentyearsandhasapromisingfuture. Agro-ecological has drawnalotofattention sheep andgoatfarming, dairy production, and others. with emphasis on irrigated fruit farming, poultry farming, andtitanium) andforthegrowthof agriculture, offer opportunitiesformineral extraction (especially for in itslarge swathsofsemiarid land. The ruralareasalso clean and renewable energies, especially wind andsolar, expansion inthenextfewyearsisgeneration of One oftheindustriesthatholdsgreatpotential for other optionsforthoselookingtogointobusiness. Strategic Plan: PE2035.Butthe state also offers several entertainment and tourismindustries, as mentioned in its

29 HOW TO INVEST IN PERNAMBUCO 30 STATES Economist andpartner atCEPLANConsultoria Tania Bacelarde Araujo the perfectplacetoinvest,produceandinnovate. For all of thesereasons,wecansafelysay, Pernambuco: interest groupsarewellregardednationally. are actively engaged, andthe“SSystem”ofprofessional support localentrepreneurs. The state’s tradeassociations state responsible fiscally government that has workedto attract investors and a with improving, continue The business environment is favorable and likely to to smile. future. They mayweepattimes,but theyalsoknowhow meu-boi, is a gritty and faithful people, who believe in the The peopleofthemaracatu,frevo , life bringsus. of hardworkandcouragetoovercome the challenges that should never be forgotten, and the conviction it takes a lot the thorny feet planted in the cracked earth ofthehinterland among natives to dream big and to bold dreams, but having their Contemplating the ocean’s infinitude inspires Pernambuco of thehinterlands. waters ofthe Atlantic, and itsfeetplanted in thedryearth Geographically, Pernambuco hasitshead bathed by the OUR STATE, OURPEOPLE brings the certainty that the reality , ofbumba- Pernambuco Businessman Paulo Sales you’ll bedelightedwithourbeachesandcountryside. needs a little rest and relaxation once in a while, we know the challengesofanewventure. Also, becauseeveryone with allthesupportyouneedandhelpovercome Come toPernambuco,wewillbehappyprovide you joint effort ofhundredsworld-class professionals. the worldwithrevolutionary solutions, resultingfromthe also can innovate: our Digital Port iscapable of impacting We caughteveryonebysurprisewhenweshowedthat so manyotherproducts. , aswellcars,batteries,cement,steel,and also learnedhowtomakesugarandcachaçaforour arms. Inadditiontoourmanyculinarydelights,wehave ready towelcomeanyonelookingsettleherewithopen to produce a wide variety of products – and we are always We arenotarichstate,butweoffer countlessopportunities and thenourportswerebornoutofthisincessantsearch. that facilitatethelogisticsforthisprocess.Ourindustries solutions out figure to and trade to us taught produced began asanindustrialstate,andtheneedtosellwhatwe the cane,andalcoholfromsugar. Oureconomyalready We havelearnedtoextractcanefromtheearth,sugar

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