New law creating Infrastructure Bonds with tax benefits comes into force

January 22, 2024

New law creates important legal framework for attracting funds from local and foreign institutional investors for national infrastructure


Law No. 14,801 – sanctioned on January 9, 2024 – came into force on January 10, 2024. It creates infrastructure bonds with tax benefits("Infrastructure Bonds with tax benefits" or “Debêntures de Infraestrutura”, in Portuguese), making it possible to offer more attractive interest rates to the market and thus attract local and foreign investors to long-term infrastructure projects in the country.


Initially, it is worth clarifying that the bonds created by the new law do not replace the securities created under Law No. 12,431/2011 ("Tax-Free Bonds" or “Debêntures Incentivadas”, in Portuguese), whose main beneficiaries are individual investors, with a zero-income tax rate. These Tax-Free Bonds will continue to exist, complementary and in parallel to the Infrastructure Bonds with tax benefits. In Infrastructure Bonds with tax benefits, the tax benefit is granted to the issuer of the paper.




Some of the characteristics of this new type of debenture, including some in common with Tax-Free Bonds, are as follows:


Issuer: must be special purpose companies, concessionaires, permit holders, authorizers, or lessees, incorporated as a joint stock company, and/or their respective direct or indirect controlling companies.

Distribution: public.

Destination: implementation of investment projects in the infrastructure sector or economic production intensive in research, development, and innovation considered to be a priority as regulated by the Executive Branch.

Term of issuance: until December 31, 2030.

Remuneration: at a pre-fixed interest rate linked to a price index or the Reference Rate (TR), with no total or partial agreement on a post-fixed interest rate.

Weighted average term: over four years.

Repurchase and Early Settlement: prohibition on the repurchase of securities issued by the issuer itself or a related party in the first two years following their issuance, as well as early settlement through redemption or prepayment, subject to the rules and exceptions set out in Resolution 4,751 of the National Monetary Council.

Resale Commitment: there is no resale commitment made by the investor.

Periodic payment of income: at intervals of at least 180 days.

Registration: proof that the security is registered with BACEN (Brazilian Central Bank) and CVM (Securities and Exchange Commission).

Prohibition on persons linked to the issuer: Infrastructure Bonds with tax benefits may not be acquired by persons linked to their issuer, including those residing or domiciled abroad, under penalty of a fine equivalent to 20% of the value of the bonds and the income derived from them. The issuer will also be jointly and severally liable for the fine in cases of willful misconduct, fraud, collusion, simulation, or abuse of legal form or deficiency of economic substance.

Simplified procedure for allocating funds: 60-month lookback limit for reimbursement of costs and expenses incurred with the project (gradual transition from 24 to 60 months over 3 years), which comes into force on the 37th month following the publication of the new law, according to the transition period below:


Legal period allowed for repayment:


  • 24 months from the closing date of the public offering -> entry into force on January 10, 2024 (date of publication of Law No. 14,801/2024).
  • 36 months from the closing date of the public offer -> entry into force on February 10, 2025 (13th month from the date of publication of Law No. 14,801/2024).
  • 48 months from the closing date of the public offering -> entry into force on February 10, 2026 (25th month from the date of publication of Law No. 14,801/2024).
  • 60 months from the closing date of the public offering -> entry into force on February 10, 2027 (37th month from the date of publication of Law No. 14,801/2024).


The new Law No. 14,801/2024 will be subject to biennial regulation by the Executive Branch, with the first regulation scheduled for February 9, 2024 (30 days after the publication of the Law, which took place on January 10, 2024).



Tax treatment


As mentioned above, the Infrastructure Bonds with tax benefits created by the new law do not replace the securities created under Law No. 12,431/2011, including the Tax-Free Bonds, which give individual investors an incentivized zero income tax rate. These bonds will continue to exist, complementing and in parallel to the Infrastructure Bonds with tax benefits of the new law. However, unlike the Infrastructure Bonds with tax benefits, income earned by investors with the new Infrastructure Bonds with tax benefits will be subject to withholding income tax ("IRRF") at the regressive rates applicable to fixed-income financial investments, namely: 22.5% up to 180 days; 20% from 181 to 360 days; 17.5% from 361 to 720 days; and 15% from 721 days onwards.


The tax withheld at source will be considered: (i) as an anticipation of the tax due in the annual tax return, in the case of legal entities taxed based on taxable, presumptive, or estimated profit; or (ii) as definitive taxation, in the case of individuals and legal entities opting for registration with “Simples Nacional” or exempt. Tax withholding at source, however, does not apply to financial institutions, including insurance, pension and capitalization companies, securities and foreign exchange brokers, securities distributors, or leasing companies.


On the other hand, income from Infrastructure Bonds with tax benefits paid, credited, delivered, or remitted to foreign investors is subject to IRRF of 15% or, exceptionally, 25% if the beneficiary is resident or domiciled in a country of favored taxation and is a beneficiary of a privileged tax regime.


However, if the income is earned by funds that are exempt upon redemption, amortization, and sale of quotas or on the distribution of income, the IRRF rate will be 10%, such as the Infrastructure Equity Investment Fund (FIP-IE) and the Incentive Infrastructure Investment Fund (FI-Infra).


On the other hand, the new Law No. 14,801/2024 aimed to attract other investors to finance infrastructure, particularly pension funds, which are traditional partners in infrastructure in the rest of the world, but still play a minor role in financing in Brazil (except for the energy sector).


As these investors are not subject to income tax, new incentives had to be created to attract them. Thus, the new bonds have a structural difference, by providing the issuer with a tax benefit for five years, a timeframe that can be evaluated annually in accordance with the Budget Guidelines Law from the Federal Government (LDO in Portuguese).


The benefit created will allow the issuer, in addition to deducting the expense of interest paid, to exclude from the determination of taxable profit and the CSLL tax base an amount corresponding to 30% of the sum of the interest related to the bonds. The idea is that this tax saving will be taken into account by the issuer to increase the interest rates on the bonds to make them more attractive to investors.


Exchange Rate indexed Bonds


In addition to pension funds, the new law also sought to create mechanisms to attract international funds. The new rule also allowed fundraising for projects considered to be a priority by the Federal Executive Branch via the issuance of foreign bonds backed by Law No. 12,431/2011, as well as the issuance of bonds indexed to the exchange rate and structures that include the issue of mirror bonds abroad.


In these structures, the company issues bonds, under Brazilian law, which are subscribed by a company from the group domiciled abroad. This foreign company, in turn, issues bonds backed by Brazilian bonds, in a more usual format for foreign investors. This structure has been used in a few projects in Brazil but in reais (BRL). Allowing the bonds to be indexed will make it possible to reach a larger pool of investors.


In addition to the provisions relating to bonds, the new law also introduced the zero rate of Law No. 9,481/1997 for interest arising from the issuance of bonds at the international market for the implementation of infrastructure projects considered to be a priority. In this case, there would be no issuance of bonds at the domestic market, but directly of a bond in the international format. In this case, however, the benefit of excluding 30% of the interest in determining the taxable profit does not apply.


Investment funds


This new law, which amended the Legal Framework for Tax-Free Bonds and the Infrastructure Equity Investment Fund (FIP-IE), the Investment Fund for Participation in Economic Production Intensive in Research, Development and Innovation (FIP-PD&I), and the Incentive Infrastructure Investment Fund (FI-Infra), emerged at a good time, given that the New Regulatory Framework for Investment Funds (CVM Resolution No. 175) came into force recently, as of October 2, 2023, and brought in a number of relevant novelties, (i) the possibility of segregating assets in funds and limiting the liability of shareholders or investors, an important step, long awaited mainly by foreign investors, who viewed the lack of limitation of their liability in investment funds with legal uncertainty, and (ii) the imposition of the 10% IRRF rate on income from Infrastructure Bonds with tax benefits, when earned by exempt funds on redemption, amortization and sale of quotas or distribution of income, as mentioned above.




  • Eligible SPEs: SPEs that have already been set up due to a concession, permission, lease or authorization agreement between the company and a governmental entity become eligible for investment by FIP-IE and FIP-PD&I.
  • Eligible projects: also include other areas considered a priority by the Federal Executive Branch, in the form of Law No. 12,431/2011.
  • Framework deadline: the deadline for starting the fund's activities is increased from 180 to 360 days, counting from the operating registration granted by CVM, and the deadline for meeting the minimum framework requirements set out in Law No. 11,478 is increased from 180 days to 24 months.




  • Framework limits: the percentage of 85% that the fund must hold in assets referred to in Article 2 of Law No. 12,431 (and which may be 67% in the first 2 years from the date of the first payment of shares) is no longer levied on net assets but will be now levied on the fund's reference value.
  • Change in the definition of reference value: defined as "the lowest value between the fund's net assets and the average of the fund's net assets in the 180 days prior to the calculation date." The change allows for greater flexibility during the FI-Infra portfolio formation period.


Priority environmental projects


The issuance of Infrastructure Bonds with tax benefits, as well as Free Tax Bonds, aimed exclusively at investment projects that generate significant environmental or social benefits, will undergo a specific external evaluation for this type of issuance and must follow a simplified processing procedure, subject to a priority analysis concerning projects that do not generate environmental or social benefits.


Bond issuances have been fundamental to the development of infrastructure. In 2022, for example, more than R$40 billion were raised in bonds for projects in the most varied sectors. In addition to the volume, this security offers longer terms (from 15 to 20 years), which is essential for long-term projects. Participation of individuals, although welcome, also poses some challenges, especially in the early stage of projects, when deviations from the path can occur (cost increases, contractual changes), and waivers are necessary.  Increasing the participation of larger investors who are more familiar with the reality of projects has long been desired by the market.


To access the full text of Law No. 14,801/2024, click here.


Our team has also been closely monitoring regulatory changes and the evolution of incentivized debentures in the capital markets and is available to provide further information.

Publication produced by our Tax, Capital Markets, Infrastructure & Energy

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