Brazil’s investment rollercoaster

Tax exemptions increase the allure of Brazil's post-Covid entertainment industry.

Covid restrictions meant that Brazil’s vast theme park and tourist attraction infrastructure had to close doors. As vaccination rollouts continue, gates are reopening not just to guests but to new investment.

São Paulo is one example, where the owners of Hopi Hari – the country’s largest amusement park – are planning to invest BRL 150 million in the next four years. In Brasília, a long-awaited expansion of the airport will include no less than three distinct theme park areas targeted at different age groups.

A researcher with the Federation of Commerce of Goods, Services and Tourism of the state of São Paulo, explained, “The leisure sector is experiencing a strong rebound which is garnering political support to drum up investment buzz. In São Paulo state, governor João Doria is keen to capitalise on growing investment interest in the leisure industry. His administration has proposed plans to open a 40 square km tourist complex in the state which would also incorporate Hopi Hari and the Wet’n Wild aquapark.”

“The leisure sector is experiencing a strong rebound which is garnering political support to drum up investment buzz.”

Researcher, Federation of Commerce of Good, Services and Tourism, São Paulo

More leisure and entertainment infrastructure means more tourist revenue. In the view of the researcher, “… investment in the sector should be focused on providing experiences which are complementary to other types of tourism. That’s why I see Doria’s project which combines shopping, adventure sports, residential areas and even a third-age residency as the successful recipe for the continued growth of the theme park industry.” Nonetheless, the plan still needs the green light from the state congress who could oppose development on environmental and cost grounds.

Certainly, theme parks do form part of Brazil’s larger tourism sector. It makes sense that they should be developed as part of an integrated urban plan which appeals both to tourists and local communities alike. Innovation is key.

On the legislative front, earlier this month the federal congress voted to abolish president Jair Bolsonaro’s (“Bolsonaro”) veto on a law which limited tax payments for five years to the entertainment sector which also included theme parks. For the sector this is important, it will grant companies in the industry tax exemptions on the import of certain goods and equipment which can’t be sourced in Brazil.

“The government had vetoed the measure arguing that it was unconstitutional as it went against the ‘general interest’, i.e., it was viewed as disproportionately favourable to the sector. This really shows a lack of sensitivity and deep ignorance on how the sector works. State coffers will benefit from the economic activity generated by the entertainment sector by attracting more customers,” added the researcher.

“State coffers will benefit from the economic activity generated by the entertainment sector by attracting more customers.”

Researcher, Federation of Commerce of Good, Services and Tourism, São Paulo

Secondly, the veto exemplified the mistrust the Bolsonaro administration has towards the leisure and entertainment sector. Good news then that congress saw sense in helping the sector to grow, not strangling it.

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