For sophisticated traders and institutional investors, staying ahead of these changes is paramount. A significant development has just unfolded that promises to reshape the dynamic between the United Arab Emirates (UAE) and Brazil, particularly for those eyeing opportunities on the Brazil B3 Exchange.
As of April/May 2025, Brazil has officially removed the UAE from its “Low-Tax Jurisdictions” (LTJ) list, often referred to as a “tax haven” blacklist. This landmark decision, formalised by Brazil’s Federal Revenue Service (Receita Federal do Brasil) via Normative Instruction RFB No. 2,265/2025, marks a pivotal moment, ushering in a new era of clarity and reduced tax burdens for UAE residents investing in the vibrant Brazilian market.
The Game-Changing Delisting: What It Means for You
Historically, being on Brazil’s LTJ list meant transactions involving UAE residents were subject to punitive tax measures. This included a hefty 25% Withholding Income Tax (WHT) on income and capital gains, alongside stricter regulations designed to deter perceived tax avoidance.
With the UAE’s delisting, these automatic punitive measures are now eliminated. This directly translates to significant tax savings and improved net returns on Brazilian investments, as UAE residents will no longer face the automatic higher 25% Withholding Income Tax (WHT) simply because of their residency. Consequently, investors can operate with greater confidence and predictability, as the previous presumption of tax evasion associated with LTJ status has been removed, fostering a more investor-friendly environment.
The Double Taxation Avoidance Agreement (DTAA) Takes Center Stage
Brazil and the UAE have had a Double Taxation Avoidance Agreement (DTAA) in effect since May 27, 2021. While this treaty aimed to prevent double taxation, its effectiveness was previously hampered by the UAE’s inclusion on the LTJ list, as domestic anti-avoidance rules could override treaty benefits.
Now, with the delisting, the DTAA is expected to apply more robustly. This ensures that income and capital gains are taxed fairly, without an undue burden from either jurisdiction. While the DTAA allows Brazil to tax capital gains derived within its borders, the crucial point is that this taxation will now occur at standard rates, not the punitive “tax haven” rate.
Unlocking New Potential: Your Opportunity
The removal of the UAE from Brazil’s low-tax jurisdiction list is a strategic alignment that strengthens the economic ties between these two global players. For institutional traders and sophisticated investors based in the UAE, this change offers tangible advantages:
Cost Optimisation: Lower withholding taxes mean higher net returns.
Simplified Operations: Reduced regulatory complexity and increased predictability.
Expanded Market Access: Facilitates deeper engagement with the vast and liquid Brazilian capital markets, including opportunities in Non-Deliverable Forwards (NDFs) for managing emerging market currency (EMFX) exposure.
Strategic Positioning: Enables a more effective utilisation of the existing DTAA for tax-efficient cross-border investments.
This represents a prime opportunity to re-evaluate and optimise your portfolio’s exposure to Brazil. The pathway to potentially higher, more predictable returns from the B3 Exchange for UAE residents just became significantly clearer.
Trade the B3 Market with Confidence Through Orient Futures Singapore
To fully capitalise on this newfound advantage and the potential of the Brazilian market, partnering with a knowledgeable and well-connected brokerage is essential. Orient Futures Singapore, is the first brokerage in Asia to offer direct access to Brazil’s B3 Exchange, providing the robust infrastructure and expert support necessary for sophisticated trading.
As a leading brokerage firm in Asia with a proven track record, Orient Futures Singapore enables you to navigate and seamlessly execute your B3 strategies. Leverage our advanced trading platforms, deep liquidity access, and dedicated 24/5 client support to unlock the full potential of your Brazilian investments in this new, more tax-efficient era.
Start Trading with Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us, opening additional trading avenues.
Expect streamlined processes and an easy-to-use interface designed for minimal latency, accompanied by our team’s round-the-clock availability on trading days to provide assistance for all your trading needs.
