Brazil removes cap on foreign ownership of airlines
The Brazilian government has eliminated restrictions on the foreign ownership of airline companies, repealing the 20 per cent cap that had been in place, and which is expected to increase competition in the Brazilian airline market and mitigate difficulties for national airlines’ financing.
The measure also eliminates the requirement that airlines be exclusively Brazilian managed, but maintains the requirement of the incorporation of a company according to Brazilian laws, and with its headquarters and management in Brazil.
This is not the first time that the government has attempted to end the restriction on foreign ownership in civil aviation, according to a bulletin by Lefosse Advogados. In 2016, former President Dilma Rousseff proposed raising the maximum foreign stake in airlines to 49 per cent, but the proposal was interrupted by her impeachment.
Current President Michel Temer also acted to raise the maximum stake to 100 per cent, but had to veto the measure due to strong pressure from the senate.
