Brazil ICT Datacenter Hub Latin America
The Brazilian government has introduced the REDATA policy through Provisional Measure 1,318/2025, aiming to position the country as a leading hub for digital infrastructure in Latin America. The program offers significant tax incentives for datacenter projects that meet sustainability and domestic-market-use requirements, creating opportunities for U.S. companies in digital infrastructure, cloud services, hardware supply, and AI/IoT ecosystems.
Under REDATA, qualifying projects are eligible for suspension or zero-rate of federal taxes on PIS/Pasep, Cofins, IPI, and import duties for equipment without a domestic equivalent. Brazil is targeting up to R$2 trillion (US$370.7 billion) in datacenter investments over the next decade, providing early-entry advantages for supplies of ICT infrastructure such as servers, cooling systems, and power equipment. U.S. datacenter operators and cloud-service providers can also establish or expand physical operations in Brazil, leveraging favorable cost structures and incentives to serve local and regional markets.
The policy mandates that at least 10% of datacenter processing/storage capacity serves the Brazilian market, opening pathways for U.S. providers to localize cloud services while benefiting from tax-efficient infrastructure. REDATA’s focus on renewable energy and regional decentralization (with reduced obligations for North/Northeast/Central-West regions) offers U.S. firms opportunities in the “green datacenter” space. While REDATA presents significant opportunities, U.S. companies must meet strict requirements, including investing a minimum of 2% of equipment value into R&D programs in Brazil and fulfilling sustainability metrics such as 100% renewable energy use. The provisional measure must be ratified by the Brazilian Congress within 120 days, introducing regulatory risk. Localization and compliance with Brazilian standards will require partnerships or joint ventures, and timing is critical as Brazil aims to attract global investment within a 2–3-year window.
For more information on opportunities for U.S. companies, please contact Patricia Marega Patricia.Marega@trade.gov, ICT Commercial Specialist, U.S. Commercial Service, São Paulo.