Increase in the threshold offoreign equity holding in Brazilian Airline Companies

Yesterday, July 25th 2016, Vice-President Michel Temer, who is currently acting as President, sanctioned Law No. 13,319, which revokes the increases in foreign equity holding by foreigners in Brazilian airline companies brought by Provisional Measure No. 714, of March 1st 2016.

The main change introduced by such Provisional Measure was the increase, from 20% to 49%, the ceiling of voting equity that foreigners could hold in a Brazilian airline company, which could be of even 100% provided that there was reciprocity in the treatment of Brazilians in the country of origin of the foreigner wishing to hold equity in a Brazilian airline.

The reciprocity requirement had been excluded by Congress, which was strongly opposed by specialists in the field. It was expected, therefore, that Vice-President Temer would only veto the lack of need for reciprocity, preserving the advances brought by the Provisional Measure.

The political backstage is commenting that the Vice-President was strongly influenced by certain Senators, who are against the increase. The Senate is currently processing the impeachment application of President Dilma Rousseff.