STATES INVEST IN RIO GRANDE DO SUL

STATES INVEST IN RIO GRANDE DO SUL

ACKNOWLEDGMENTS ACKNOWLEDGEMENTS The American Chamber of Commerce for Brazil, being the largest Amcham outside the United States is constantly serving its members by building bridges for Brazilian businesses worldwide. Our foreign investment attraction efforts have also been a key leading point for Amcham. The How to Series is part of this initiative. With the support of some of our corporate members we are putting together strategic information on the most various aspects of doing business in Brazil. As part of th BRICS (Brazil, Russia, India, China and South Africa) and representing the 6 largest economy of the world, Brazil has clearly demonstrated its importance in the global market. The country s business environment as well as foreign investment numbers, despite international crisis, continues very positive. Medium and high classes are increasing, which creates a solid internal market and contributes to maintain good results in the economy. The 2014 FIFA World Cup has been estimated in USD 56.8 billions and the 2016 Olympics in USD 19.3 billions in investments. These events have had an impact on direct investments in Brazil and in infrastructure projects needed to hold them in the country. It is now more than ever a strategic time for businesses opportunities in Brazil. We welcome you and hope that the information you are about to read serves you best. The American Chamber of Commerce for Brazil, being the largest Amcham outside the United States is constantly serving its members by building bridges for Brazilian businesses worldwide. Our foreign investment attraction efforts have also been a key leading point for Amcham. The How to Series is part of this initiative. With the support of some of our corporate members we are putting together strategic information on the most various aspects of doing business in Brazil. As part of BRICS (Brazil, Russia, India, China and South Africa) and representing the 7 th largest economy of the world, Brazil has clearly demonstrated its importance in the global market. The country s business environment as well as foreign investment numbers, despite international crisis, continues very positive. Medium and high classes are increasing, which creates a solid internal market and contributes to maintain good results in the economy. The 2014 FIFA World Cup has been estimated in US$ 56.8 billions and the 2016 Olympics in US$ 19.3 billions in investments. These events have had an impact on direct investments in Brazil and in infrastructure projects needed to hold them in the country. It is now more than ever a strategic time for businesses opportunities in Brazil. We welcome you and hope that the information you are about to read serves you best. Gabriel Rico - CEO, Amcham Brasil Gabriel Rico - CEO, Amcham Brasil Recent data on Rio Grande do Sul economic performance provides evidence of the state s dynamism. In 2013, the growth of the Rayes & Fagundes Advogados Associados is a full service law firm recognized for its expertise and experience in representing and advising foreign companies and individuals in Brazil. Over the years, we have learnt that it is important not only to provide specific legal support, but also to help our clients understand the whole environment in which they will make their decisions. The idea underlying this brochure is providing foreign investors and entrepreneurs with an overview of the main legal aspects for establishing a company or simply doing business in Brazil. Our relationship with Amcham is a long-standing one and comes from the great number of US companies and individuals we have been advising since the firm s inception. state s gross domestic product (GDP) led the national ranking, with a 5.8% increase, while the overall Brazilian rate was 2.3%. In addition, RS saw 6.8% industrial production growth, ahead of the 1.2% national average. Unemployment statistics (3.5%) and exports (+44.3%) also highlight Rio Grande do Sul s economic performance in comparison with the national average. These results are a reflection of a combination of different factors, such as Rio Grande do Sul s strategic location, the diversity of its economy and an environment that is favorable to business. It also reflects the work done by the state through its Industrial Policy, drawn up to promote Rio Grande do Sul s economic development. All these aspects are described in detail in this publication, which aims to supply interested parties with the information necessary to make investments in the state. João Paulo Fagundes, Founding Partner Rayes & Fagundes Advogados Associados Ivan De Pellegrin - CEO, Rio Grande do Sul Development Agency (AGDI) Lia Esposito Roston, Partner Rayes & Fagundes Advogados Associados

STATES

CONTENT 01 ABOUT RIO GRANDE DO SUL 02 ORGANIZATION AND DEVELOPMENT 03 ESTABLISHED ECONOMY 04 NEW ECONOMY 05 SUPPORT FOR INVESTMENTS 06 INNOVATION AND TECHNOLOGY 07 INFRASTRUCTURE 08 EDUCATION, SAFETY AND HEALTHCARE 09 TOURISM AND CULTURE 10 USEFUL CONTACTS 11 ABOUT OUR SPONSOR 06 14 17 22 25 27 29 34 37 39 42

01. ABOUT RIO GRANDE DO SUL 06 STATES Located at the southernmost tip of Brazil, Rio Grande do Sul is the country s fifth most populous state: it has over 11 million inhabitants living in 497 cities, on a total area of 281,730 km². Its capital city of Porto Alegre is close to other strategic cities: it is Brazil s closest city to Santiago, Chile, and lies between the cities of São Paulo and Buenos Aires, Argentina. The state is on the border with Uruguay and Argentina, in the exact center of the Southern Cone, just a few hours away from South America s main markets. View of Porto Alegre, capital of Rio Grande do Sul Credit: Camila Domingues/Palácio Piratini STRATEGIC LOCATION

DISTANCES BETWEEN PORTO ALEGRE AND THE MAIN BRAZILIAN AND MERCOSUR CITIES. City Bogota (Colombia) Quito (Ecuador) Lima (Peru) La Paz (Bolivia) Santiago (Chile) Km 4,560 km 4,401 km 3,330 km 2,289 km 1,875 km State Statistic Rio Grande do Sul s human development index is 0.746, classified as high (the index-ranges goes from 0 to 1). The state comes in sixth on the Brazilian ranking, standing out for quality of life and economic development Average life expectancy for Rio Grande do Sul s inhabitants is 75.38 years nearly 2 years more than the national average according to the 2013 Human Development Atlas of Brazil Brasília (Brazil) Rio de Janeiro (Brasil) 1,623 km 1,572 km *Source: Fundação de Economia e Estatística (FEE) São Paulo (Brazil) Buenos Aires (Argentina) Asunción (Paraguay) Montevideo (Uruguay) State Statistic Rio Grande do Sul s Gross Domestic Product (GDP) grew 5.8% in 2013, reaching R$ 310.5 billion in 2013* nearly three times higher than the national rate The state represents 6.42% of the national GDP 1,119 km 844 km 824 km 712 km The state was listed 9 th on the 2014 South American States of the Future ranking done by FDI Magazine, a bi-monthly publication produced by the Financial Times group. It is the third most promising state in Brazil. The survey evaluated economic and social data from 237 states and provinces in South America. This table presents Rio Grande do Sul in comparison to the largest states in South America according the evaluated criteria. City Ranking The state s agricultural industry earned R$ 20.9 billion in 2011, 9.2% of the Gross Value Added (GVA) The industry represented R$ 61.2 billion in the GDP, 26.9% of the GVA Economic Potential Human Capital 6 th 7 th The service sector contributed with R$ 145.6 billion to the GDP in this period, representing 64% of the GVA Rio Grande do Sul s industrial growth was 6.8%, ahead of the national average of 1.2%. The petroleum and alcohol refinery, automotive vehicles, rubber and plastic, machinery and equipment, and beverages presented the biggest gains 44.3% or US$7.7 billion were how much RS exports increased in 2013. The state was the third largest exporter, with 10.36% participation in the national total Rio Grande do Sul s GDP per capita is R$ 27,813.21 15.6% higher than the national average Infrastructure Favorable business enviroment HISTORY The Gaucho territory is made up of a mixture of peoples. Initially inhabited by indigenous peoples, little by little Rio Grande do Sul received waves of immigrants from around the world. This occupation began with the Jesuit settlements in the 17 th century, which later gave rise to 8 th 8 th 07 HOW TO INVEST IN RIO GRANDE DO SUL

Sete Povos das Missões, a region that became important for the state s economy with its production of yerba mate, leather and cattle. Portuguese Azorean immigrants arrived the following century and were mainly involved in wheat production. European immigration was strong throughout the 19 th century, and Rio Grande do Sul received mainly Germans and Italians, but there were also Poles, Africans, Japanese and Spaniards, among other nationalities in different periods. DIVERSITY Such a great variety of influences made the state s economy just as diverse as its culture. Agriculture and the transformation industry are sectors that have leveraged and continue adding to the region s development, which also relies on strong participation from the service sector. See just a few of the industrial sectors where Rio Grande do Sul is a Brazilian leader: The largest industrial complex for automation, biodiesel, road construction and bus implements, agricultural machinery and implements, leather and footwear, wine and sparkling wine, rice and wheat agroindustry. INTERNATIONALIZED ECONOMY International insertion is a determining factor for the state s competitiveness. Rio Grande do Sul s foreign trade chain, represented by the sum of its exports and imports, was responsible for 30.7% of the state s GDP in 2013. During this period, exports reached US$ 25.1 billion and grew 44.3%, while imports were US$ 16.7 billion and increased 9.1%. The state was Brazil s third largest exporter and fourth largest importer. In this context, the state has sought to promote its own businesses abroad and attract foreign investments. From 2011 to 2013, as part of the Rio Grande do Sul Business Participation in International Trade Show Support Program, 29 international trade shows were supported in Brazil and 19 abroad, with 715 participations of RS companies and R$ 105 million in business deals closed. In addition, in three years, the state participated in 63 international missions to 30 countries. The results of these actions were made real in the high number of undertakings from outside Brazil that installed themselves in the state. The second largest industrial complex for electronics, furniture, beverages, machinery and equipment, chemicals, metal-mechanical, plastic and rubber, and naval. The third largest center for wind power generation. 08 STATES The fourth largest industrial complex for food production and automotive vehicles.

By Country/ Exports Main Destinations 2013 (Jan/Dec) 2012 (Jan/Dec) Var% US$ F.O.B Part% US$ F.O.B Part% 2013/2012 Total of area 25,093,698,478 100.00 17,385,699,533 100.00 44 China 4,550,981,715 18.1 2,860,303,994 16.5 59 Panama 2,897,175,367 11.5 32,719,849 0.2 8754 Netherlands 2,522,376,128 10 642,024,893 3.7 293 Argentina 1,897,532,290 7.6 1,540,803,500 8.9 23 United States 1,641,621,935 6.5 1,357,877,737 7.8 21 Paraguay 715,954,437 2.9 529,216,228 3.0 35 South Korea 647,648,035 2.6 303,007,162 1.7 114 Germany 565,635,840 2.3 506,699,214 2.9 12 Belgium 545,835,711 2.2 412,318,445 2.4 32 Uruguay 484,837,585 1.9 447,365,271 2.6 8 Others 8,624,099,435 34.4 8,753,363,240 50.3-1 Source: Ministry of Development, Industry and Foreign Trade (MDIC), 2014. 09 HOW TO INVEST IN RIO GRANDE DO SUL

Main products exported by RS 2013 (Jan/Dec) 2012 (Jan/Dec) US$F.O.B Part% Net Kg US$FOB Part% Net Kg 2013/2012 Var% Total Exported 25.093.698.478 100.00 20,183,065,238 17,385,699,533 100.00 15,470,145,622 44.3 Total of Main Exported Products 16.108.081.263 64.2 14,470,317,130 8,892,277,779 51.1 10,924,674,027 81.1 Drilling or exploration platforms, floating or submersible 4.772.731.870 19.0 251,627,690 0 0.0 0 0.0 Soybeans, including triturated 4.226.178.875 16.8 7,873,641,969 1,975,539,621 11.4 3,587,491,509 113.9 Non-manufactured tobacco; scrap tobacco 2.270.109.006 9.0 435,409,351 2,191,302,280 12.6 444,206,726 3.6 Edible meat and tripe, fresh, refrigerated or frozen, of egg laying birds 1.276.971.806 5.1 664,578,270 1,276,474,799 7.3 682,836,340 0.0 Cakes and other solid waste from soybean oil extraction 1.202.313.640 4.8 2,526,481,448 1,153,891,902 6.6 2,625,254,378 4.2 Ethylene polymers, in primary form 816.530.722 3.3 507,550,507 747,957,742 4.3 482,608,638 9.2 Passenger and other automotive vehicles 455,693,827 1.8 45,930,927 170,950,855 1.0 19,340,972 166.6 Rice 379,480,598 1.5 881,942,032 497,435,217 2.9 1,055,270,837-23.7 Fresh, refrigerated or frozen pork 370,740,773 1.5 138,618,613 392,345,430 2.3 149,970,420-5.5 10 STATES Wheat and wheat mixed with rye 337,330,146 1.3 1,144,536,323 486,379,933 2.8 1,877,694,207 Source: Ministry of Development, Industry and Foreign Trade (MDIC), 2014. -30.6

Several multinational campanies are located in Rio Grande do Sul. Here are some examples: Company Origin Country Location at RS Gerdau Brazil Charqueadas, Sapucaia do Sul, Charqueadas, Porto Alegre, São Leopoldo John Deere USA Horizontina and Montenegro Monsanto USA Coxilha and Não-me-toque General Motors USA Gravataí Braskem Brazil Triunfo KMW USA Santa Maria Votorantim Brazil Candiota, Capão do Leão, Caxias do Sul, Charqueadas, Esteio, Lajeado, Montenegro, Novo Hamburgo, Passo Fundo, Pelotas, Pinheiro Machado, Porto Alegre, Santa Maria, Sapucaia do Sul, Viamão Dell USA Eldorado do Sul Foton China Guaíba CMPC Chile Guaíba Magna Cosma Internation Canadá Santo Antônio da Patrulha Alstom France Canoas Hyundai Elevator South Korea São Leopoldo Fujikura Amman Marcopolo Artecola Agrale Randon Lanxess Japan Switzerland Brazil Brazil Brazil Brazil Germany Montenegro Gravataí Caxias do Sul Campo Bom Caxias do Sul Caxias do Sul Triunfo 11 HOW TO INVEST IN RIO GRANDE DO SUL

Company Origin Country Location at RS Stihl Takeda Mitsubishi Electric Corp. Mahindra Manitowoc HT Micron Toyo Engineering Toyota Navistar International Honda AGCO Cargil Louis Dreyfus ADM Bunge Terex Weatherford Dupont Germany Japan Japan India USA South Korea Japan Japan USA Japan USA USA France USA USA USA Switzerland USA São Leopoldo São Jerônimo do Sul Guaíba Dois Irmãos Passo Fundo São Leopoldo São José do Norte Guaíba Canoas Xangri-Lá Ibirubá, Canoas and Santa Rosa Porto Alegre Pelotas, Cruz Alta and Rio Grande Rio Grande Rio Grande Cachoeirinha São Leopoldo and Caxias do Sul Santa Cruz do Sul, Santa Rosa and Esteio 12 STATES

Company Origin Country Location at RS SAP Germany São Leopoldo Noble Group Hong Kong Passo Fundo BRF Brazil Lajeado, Ijuí, Ivoti, Santa Rosa, Três de Maio, among others cities Pirelli Italy Gravataí Denso Japan Gravataí Gestamp Spain Gravataí Petrobras Brasil Passo Fundo, Canoas, Osório, Rio Grande, among others cities Johnson Controls USA Canoas Dana USA Gravataí TDK Japan Gravataí GKN England Charqueadas and Porto Alegre Philip Morris USA Santa Cruz do Sul Hyva Corporation Netherlands Charqueadas and Porto Alegre Danfoss Thyssenkrupp Elevadores Yara PPG Industries Denmark Germany Norway USA Porto Alegre and Caxias do Sul Guaíba, Capão da Canoa, Caxias do Sul, Gramado, Porto Alegre, among other cities Porto Alegre and Rio Grande Gravataí 13 HOW TO INVEST IN RIO GRANDE DO SUL

02. ORGANIZATION AND DEVELOPMENT ORGANIZATION Rio Grande do Sul is organized into 28 Regional Development Boards (Conselhos Regionais de Desenvolvimento da Região Sul Coredes), divided into nine Functional Planning Regions that are grouped according to economic, environmental and social homogeneity criteria, in addition to well adjusted variables like employment, healthcare and education. 14 STATES

15 HOW TO INVEST IN RIO GRANDE DO SUL

Created in 1994, the Coredes are spaces for discussion and decision making regarding policies and actions aiming to promote sustainable regional development and improved quality of life. DEVELOPMENT Economic and social development play a central role in Rio Grande do Sul s priorities. This matter is dealt with the Rio Grande do Sul Development System (SDRS), led by the Secretary of Development and Investment Promotion (SDPI) and also composed by the Rio Grande do Sul Development Agency (AGDI) and the following banks: Badesul, Extreme South Regional Development Bank (BRDE Banco Regional de Desenvolvimento do Extremo Sul) and Banrisul. In pursuit of Rio Grande do Sul s economic development, the main pillar is its Industrial Policy, a set of instruments with the goal of stimulating and strengthening sectors and companies, and attracting new undertakings to the state. One of the Industrial Policy s main axes is its Sectorial Policy, which prioritize 23 strategic sectors for development. In addition to these axes, the Policy also includes the Cooperative Economy Policy, Business Firm Policy, Transversal Instruments and Infrastructure for Development. 16 STATES

03. ESTABLISHED ECONOMY The state s established economy includes those production sectors that have already consolidated themselves in Rio Grande do Sul, but have the potential to grow even more, becoming even more relevant to the state and Brazil s development. Ahead there is a description of the main sectors already established in the state economy. of the livestock, predominantly composed of European breeds, is another striking difference. The state is responsible for nearly 5% of Brazil s production, with 327,000 ranches, 185 slaughterhouses and approximately 14.5 million head. In order to expand the sector s performance, the state promotes genetic improvement initiatives with subsidized distribution of insemination kits. PORK AGRIBUSINESS POULTRY FARMING Rio Grande do Sul s poultry farming industry is Brazil s third largest in terms of production and exports. The state has been involved in the activity for over half a century, and now nearly half of its cities are involved in at least one stage of the production chain. Rio Grande do Sul has adopted an active investment promotion and financial support policy for the industry through Banrisul (Rio Grande do Sul State Bank) lines of credit. BEEF Rio Grande do Sul s beef is produced in an environment with characteristics unlike those anywhere else in the world: the Southern Fields, including the Pampas eco-system, which extends across Uruguay and Argentina. The genetic quality With great production potential, a technologically advanced production system and industrial expertise, Rio Grande do Sul s pig industry receives international attention. It is Brazil s second largest producer and third biggest exporter, with regional offices for globally recognized brands. The state has adopted an active investment promotion policy, with R$ 82 million in the Investor s Room portfolio, and lines of credit available from Banrisul to provide working capital for businesses. RICE The Rice industry has been present in Rio Grande do Sul for over half a century. With a temperate climate and high level of farm efficiency, the state concentrates around 65% of the Brazilian harvest. IRGA Instituto Rio Grandense do Arroz [Rio Grande do Sul Rice Institute] encourages, coordinates and instrumentalizes the sector through technology and knowledge sharing. Brazil is 17 HOW TO INVEST IN RIO GRANDE DO SUL

number one in production and consumption outside the Asian continent. The construction of a center of excellence in the diffusion of rice production technology has led to increased productivity, which grew nearly 30% between 2003/2004 and 2013/2014. As a way of expanding the consumer market, the state promotes the image of Brazilian Rice abroad in collaboration with the Brazilian Trade and Investment Promotion Agency (Apex-Brasil), through the Brazilian Rice project. financing with special conditions and facilitation of the environmental licensing process. WHEAT AND WINTER CROPS A basic element in the human diet, wheat and winter crops are taking on increasing importance in the state s agro-industry. With its good temperate climate and growing farm productivity, in 2013, Rio Grande do Sul saw the largest wheat harvest in history, amounting to 58% of Brazil s total production and making it the country s biggest producer. The sector is on the rise in the state, with announced investments to the order of R$ 257.1 million during the 2013/2014 biennial. With the recent insertion of the Industrial Policy, it now relies on a privileged bracket in conceding tax incentives as part of the Fundopem/Integrar program. Rio Grande do Sul has a well established rice farming tradition and it is a point of reference in Brazil. The state is responsible for around 65% of the Brazilian harvest. Credit: Fernando Dias/Seapa SOYBEAN AND CORN 18 STATES Soybean and corn are two of the most important crops for Rio Grande do Sul s agro-industry. They involve large harvests, vast territorial dissemination and a broad range of derivative products. In addition, the two grains and their sub products are raw materials for other segments, such as milk and dairy products, poultry farming, pig farming and more recently, biofuel through soybeans. The state s focus is on expanding irrigation and grain storage on farms through Rio Grande do Sul harvested a record wheat crop in 2013 Credit: Fernando Dias/Seapa MILK AND DAIRY PRODUCTS The words quantity and quality define Rio Grande do Sul s milk production. Brazil s second largest producer, the state manufactures some of the country s best quality milk and relies

on environmental conditions identical to world leaders in the activity, such as New Zealand. The sector is present in 90% of the state s cities, with 60% of this production destined to other Brazilian states. In order to ensure the sector s organization, the Milk Production Chain Development Fund (Fundoleite) and the Rio Grande do Sul Milk Institute (IGL Instituto Gaúcho do Leite) were created. New investments in the area added up to R$ 411.8 million between 2011 and 2014. VITINICULTURE Rio Grande do Sul produces 90% of Brazilian wine. In addition to traditional table wine, the state is attracting attention due to the quality of its fine wine and sparkling wine and expansion of the market for its grape juice. The Brazilian Wine Institute (Ibravin Instituto Brasileiro do Vinho), an international reference point in the field, drives ongoing qualification. The focus of the state is to promote Gaucho wine s image internationally, participating in trade shows in Europe and Asia. Recently, Rio Grande do Sul received new investments to the order of R$ 105.6 million, with emphasis on cooperatives, which were responsible for over 70% of this amount. Wine production is one of the state s most well established activities, with 90% of Brazilian production based in Rio Grande do Sul Credit: Pedro Revillion/Palácio Piratini AUTOMOTIVE AND ROAD EQUIPMENT The Brazilian automotive sector holds a relevant position in the world market. Over 10% of the industry s Brazilian workforce is from Rio Grande do Sul, being responsible for 6.8% of the automobiles manufactured in the country. Rio Grande do Sul companies led the way in the national highway implements market, with 50% of market share, and are responsible for 63% of the nation s production of bus bodies and 12% of the nation s production of bus chassis. Starting with the new Brazilian automotive regime Inovar-Auto the state attracted investments like Chinese truck makers Foton and Shiyan Yunlihong, and investments by Rio Grande do Sul companies Randon and Marcopolo have been announced, together adding up to applications of over R$ 1.5 billion. CAPITAL GOODS MACHINERY, EQUIPMENT, INDUSTRIAL AND AGRICULTURAL IMPLEMENTS Rio Grande do Sul is one of the sector s protagonists in Brazil, responsible for approximately 13% of Brazilian capital goods production. In the agricultural implements segment, its participation is even greater, reaching 43.7% of the national total in 2013. As proof of this strength, the state has attracted companies like the American Manitowoc, and local companies like Stihl and Stara have expanded, tallying over R$ 1.3 billion in investments starting in 2011. In addition, the state provides incentives for the new undertakings to use raw materials, machinery and equipment produced by companies already installed in Rio Grande do Sul. Also, programs like Mais Água, Mais Renda [More Water, More Income] and RS Mais Grãos [RS More Grain] promote demand for irrigation and storage items, stimulating sector development. 19 HOW TO INVEST IN RIO GRANDE DO SUL

equipment, has great opportunities to intensify its production chains, as well as attract new companies. The state has focused on carrying out international missions to attract investments, as well as mapping of local companies, possible partners in joint ventures and business rounds. 20 STATES Rio Grande do Sul is a protagonist in the machinery, equipment and agricultural and industrial implement sector Credit: Pedro Revillion/Palácio Piratini WOOD, CELLULOSE AND FURNITURE Rio Grande do Sul s cellulose and Furniture industry is responsible for 15% of Brazilian production. It is responsible for 4% of the state s GDP and grosses over R$ 8 billion per year. With a striking social aspect, it directly employs nearly 60,000 people, a number that is going to grow even more with the finalization of CMPC s expansion project, which will invest R$ 5 billion, representing the largest private investment in Rio Grande do Sul s history. For its part, the furniture segment, which has its largest Brazilian hub in the state, is supported by the Local Production Arrangements Project (LPAs), which provides resources for projects that benefit companies belonging to the arrangement. EQUIPMENT FOR THE OIL & GAS INDUSTRY In Brazil, the Oil & Gas sector forecasts investments superior to US$ 250 billion over the next five years. Rio Grande do Sul, which already has skilled labor and companies to supply PETROCHEMICAL INDUSTRY, PLASTIC MATERIAL AND RUBBER PRODUCTS With active participation by Rio Grande do Sul, this sector is prosperous in Brazil. With R$ 2.5 billion in investments foreseen from now until 2020, the state is home to Brazil s most modern technology and innovation center, in the city of Triunfo. Among the main investments, there is the world s first green ethylene plant, operated by Braskem, worth R$ 500 million, as well as investments by Innova, Lanxess and Synthos. In the plastic and rubber segment, over thirty companies presented projects to install or expand operations from 2011 to 2014, for a total of approximately R$ 350 million. SOFTWARE Rio Grande do Sul s software industry relies on highly skilled professionals and 11 information technology (IT) hubs. There are over 150 undergraduate programs offered by internationally recognized institutions and 35,000 professionals in the state. With strong global growth, the segment is promising. The state promotes sector development through the LPA project, which supports arrangements in the Highlands and Central regions. In addition, Badesul has invested in the CRP Fund and supports the Criatec II Fund, which offer capital injections for innovative companies.

segment is promising. The state promotes sector development through the LPA project, which supports arrangements in the Highlands and Central regions. In addition, Badesul has invested in the CRP Fund and supports the Criatec II Fund, which offer capital injections for innovative companies. ELECTRONICS, AUTOMATION AND TELECOMMUNICATIONS The automation, telecommunications and electronics sector is significant in Rio Grande do Sul. In the automation and telecommunications segments, the state s companies meet 100% of the demand for certain products. Altogether, the two segments generate over 8,000 direct and 20,000 indirect jobs. In order to make the most of synergy between the companies, the state supports the Automation and Control Electronics LPA to further increase the sector s competitiveness. In addition, local brands rely on incentives to supply products to new investments in Rio Grande do Sul, which, from 2011 to April 2014, achieved nearly R$ 45 billion. FOOTWEAR AND ARTIFACTS The footwear sector is preeminent for Rio Grande do Sul s economy. The state is responsible for manufacturing one in three pairs of footwear in Brazil, and stands out with high value added products. The activity employs nearly 125,000 people and generates 6% of the local GDP. Well established in the state, the segment is increasingly concentrating its activities on higher value added products. The focus of its participation is to make domestic production feasible through the tax route, in contrast with products imported from eastern Asia. In addition, the participation of micro and small businesses is subsidized at the large Brazilian trade shows for the sector, encouraging sales of the state s footwear nationwide. 21 HOW TO INVEST IN RIO GRANDE DO SUL

04. NEW ECONOMY The New Economy is made up of those sectors that have yet to consolidate themselves in the state. These are linked to Brazil s broader development, such as the case with the naval and wind power generation industries and those with promising prospects on a national level, but that suffer some sort of deficit in Brazil, either in the trade balance or in technological updates. These main sectors are: Ocean Industry and Naval Pole; Recycling and Depollution; Wind Power; Biofuel Bioethanol and Biodiesel; Semiconductors; Advanced Helthcare and Medicine; and Creative Industry. All these sectors will be detailed ahead. OCEAN INDUSTRY AND NAVAL POLE Privileged by geographic conditions, Rio Grande do Sul is a protagonist for Ocean Industry growth in Brazil. Credit: Bianka Nieckel/AGDI RECYCLING AND DEPOLLUTION 22 STATES Privileged by its geographic conditions and diversified economy, Rio Grande do Sul is a protagonist for ocean industry growth in Brazil. Its consolidation is due to naval segment development, for which investments will be leveraged by new petroleum deposits in the maritime environment. Currently, the state has US$ 7.9 billion in Petrobras commissions for platforms, poles and drilling rigs, divided among four shipyards. Taking advantage of favorable geography, the state created the Jacuí and Guaíba naval hubs as a way to decentralize the sector. Rio Grande do Sul is a pioneer in recycling and environmental remediation. Ahead of other states, it has an environmentally aware population, has passed pioneering legislation and it is advanced in waste sorting and development of the recycling industry. There are mapping studies in progress, both to survey waste production and providing service companies, and this will make possible to identify business opportunities, partners and international investors. In addition, the state hosts one of the largest Brazilian trade shows for the sector, FIEMA (International Environmental Technology Trade Fair).

WIND POWER Rio Grande do Sul s wind is frequent and intense, representing 11% of Brazil s wind power potential. As of March 2014, there were 21 wind generation farms, with a nameplate capacity of 528 MW. One of them, located in Osório, is among the largest in Latin America. By 2018, another 1477.9 MW will be installed, adding up to 2005.9 MW. The state brings the sector s main actors together under the RS Eólica (RS Wind) program, which focuses both on making new parks feasible and creating a supplier chain. Concrete results can be seen in the large increase in nameplate capacity and announced investments by companies like Alstom and Impsa. demand. Starting in 2011, four new plants were inaugurated with the purpose of meeting demand, which grew after the increased mandatory bioethanol percentage in diesel from B5 to B7. For its part, bioethanol is a segment with a great future, considering that production in recent years has yet to meet 1% of the state s demand. As for ethanol, Petrobras made R$ 5.5 million available to research new plant species specifically geared to Rio Grande do Sul s climate conditions. SEMICONDUCTORS Rio Grande do Sul has made significant progress, mainly in encapsulation and design. Installed in the state, Ceitec will be the first company to produce wafers on a commercial scale in Latin America. The sector was marked in recent years by HT Micron starting production in 2011, initially on a reduced scale, and finally with the inauguration of a new factory in 2013. The industry has also benefited from consolidation of the Unisinos Semiconductors Institute (ITT Chip), which invests in research and offers services to companies. Growth of wind power generation creates opportunities for companies in the sector s production chain to install themselves in the state Credit: Pedro Revillion/Palácio Piratini BIOFUEL BIOETHANOL AND BIODIESEL In Rio Grande do Sul s the biodiesel segment is having a positive impact on the local economy. The state is a production leader, meeting a quarter of the nation s ADVANCED HEALTHCARE AND MEDICINE The Advanced Healthcare and Medicine sector includes two segments: the Medical, Dental, Hospital and Laboratory Equipment and Goods (EMHO) and Pharmaceutical segment. The first one grows 13% a year in Brazil, with eighteen manufacturers located in the state, that employ over 1000 people. There is also the Pharmaceuticals segment, which is growing more than 20% a year in Brazil. In Rio Grande do Sul, there are 29 manufacturers which grossed approximately 23 HOW TO INVEST IN RIO GRANDE DO SUL

US$ 500 million in 2011. Differential tax treatment is offered to companies that make investments in the state. In addition, reactivation of the RS Pharmaceutical Laboratory (LAFERGS) opens a new range of opportunities for state companies through signature of Production Development Partnerships (PDPs). launched the RS Criativo (Creative RS) program, which gathers all the initiatives focused on the sector. OTHER PRODUCTION SECTORS In addition to the strategic sectors already included in the state s Industrial Policy, other production sectors are receiving special attention due to the emergence of new growth opportunities. They are detailed ahead. DEFENSE AND AEROSPACE The Advanced Healthcare and Medicine sector is growing in Brazil and Rio Grande do Sul Credit: Camila Domingues/Palácio Piratini CREATIVE INDUSTRY The Rio Grande do Sul Aerospace Hub began with the signature of a letter of intent between the state government and AEL Systems during a mission to Israel in April 2013, and emerged with the confidence of the competencies already existing in the state. The hub aims to ensure the state s increasing presence in the industrial and technological base of the aerospace sector domestically. Starting off by mapping the technological competencies existing in Rio Grande do Sul for the production of microsatellites, a search for international partners with expertise in the sector has been conducted. CARBOCHEMISTRY 24 STATES Cultural diversity and traditions make Rio Grande do Sul a national hub for the creative industry. In the state, the sector generates R$ 5.2 billion annually, a 5.6% slice of the country s entire creative area, with a bonus: income of workers in creativity is ahead of the national average for formal labor. Through the LPA Project, the state supports the Audiovisual, Fashion and Gemstone, Jewelry and Precious Stone Hub arrangements, strengthening the sector s organization. In addition, since 2012 it has launched specific research grants for the sector every year, benefiting nine projects. Finally, in 2013, the state 89% of Brazil s coal deposits are located in the state of Rio Grande do Sul. In the Candiota region alone, the vast open-air, easily mineable deposit occupies a 45 x 45 km area. The quality of the state s coal makes it very attractive for the carbochemical industry, since it has a low heat generating capacity. In this way, initiatives by the state aim to prospect investors with technology to transform these reserves into wealth, based on the elaboration of chemicals originating from coal. Given the demand for these compounds, the sector is seen as one of the great opportunities for the future.

05. SUPPORT FOR INVESTMENTS One of the main advantages of Rio Grande do Sul is its large network of incentives to business undertakings of all sizes. INVESTORS ROOM The Investors Room is a model of both presence-based and online service that aims to professionalize and facilitate relations between entrepreneurs and government agencies. Created by decree in 2011, the channel provides instruction on subjects like tax incentives, financing, environmental licensing, infrastructure and industrial areas, for example. All of the state s secretaries and agencies involved in the project in question are brought together, and the project is then monitored by a specific manager. Any entrepreneur interested in investing in the state can access the Investors Room, via the www.saladoinvestidor.rs.gov.br website or telephone at +55 (51) 3288-1135. 420 R$ 44.6 Bi 59,200 INVESTORS ROOM projects belong to the Active or Completed Projects Portfolio is what that means in investments direct jobs should be created NEW FUNDOPEM/RS Rio Grande do Sul s new Operation Business Fund (Fundo Operação Empresa Fundopem/RS) is a tax incentive instrument that contemplates projects of all sizes, including cooperatives, and it is a partnership between the state government and the private initiative. Among others conditions for concession, those are most important: 149 The creation of jobs and salary mass; The realization of fixed investments; and Being in good standing with contractual transactions with Badesul, Banrisul and BRDE and other tax and environmental obligations. 149 R$ 4 Bi 12,000 FUNDOPEM projects supported since 2011 billion were invested direct jobs were created in the state 25 HOW TO INVEST IN RIO GRANDE DO SUL

26 STATES INTEGRAR/RS Rio Grande do Sul s Industrial Development Harmonization Program (Integrar/RS) is an incentive in addition to Fundopem. It is a deduction ranging from 10% to 90%, levied on each portion of the financing to be repaid, including the principal and respective charges. The percentage is determined in accordance with the undertaking, and the criterias include: the city where the project is located, jobs created and increase in salary mass, and possible environmental impact. Those undertakings located in regions with socioeconomic development indicators inferior to the state average for that indicator can access the program. To learn more, just contact SDPI at +55 (51) 3288-1000 or at the website www.sdpi.rs.gov.br. RIO GRANDE DO SUL FINANCING SYSTEM Rio Grande do Sul s financing system includes Banrisul, Badesul and BRDE banks, which act as development inducers for the state. The initiative makes lines of credit available with the use of own resources, with those coming from the Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e Social BNDES), or other sources and provision of assurances, in addition to working to set up participation funds and offer other services. In 2013, the three banks injected R$ 3 billion in the state s economy via BNDES. Altogether, BNDES invested R$ 15.49 billion in the state, 56% more than in 2012. The system operates the Inovacred line in collaboration with the Financing of the Brazilian Innovation Agency (FINEP), for projects and studies which makes resources available to finance innovative projects. As a group, the three banks rely on a total of R$ 240 million to this end, encouraging company development. LOCAL PRODUCTION ARRANGEMENTS (LPAS) The LPA Project is one of the strategic projects that are part of the Economy of Cooperation policy towards promoting local sustainable development and income appropriation. These arrangements can be defined as agglomerations of companies, producers and institutions in a single territory with cooperative ties. The project aims to strengthen local governance through a managing entity. By agreement, resources are passed on to maintain the governance activities. Between 2011 and 2013, governance of 20 LPAs from 19 regions in the state were supported, and training courses were carried out for 55 managers and technical assistance of those LPAs, which cover 15,000 undertakings and 285,000 workers. More information at www.agdi.rs.gov.br or via email at apl@agdi.rs.gov.br. EXTENSION PROJECT The Production and Innovation Extension Project aims to increase production, employment and income, providing direct advisement to promote efficiency and competitiveness in businesses in the industrial sector. The initiative advises planning and gives support in formulating projects. Rio Grande do Sul Development Agency (AGDI) sets up Production and Innovation Extension Groups in collaboration with universities and technological institutions. 17 groups in 23 regions have already been implemented, serving 2296 companies. Manufacturers and agro-industrial companies, preferably small and medium-sized from all over Rio Grande do Sul, can access the project on the www.agdi.rs.gov.br or by sending an email to extensao@agdi.rs.gov.br.

06. INNOVATION AND TECHNOLOGY When the subject is innovation, Rio Grande do Sul s policy is a point of reference. In recent years, the state has increased its investments in technology by over 420%, and by the end of the year intends to triple its number of established technological parks, with investments of over R$ 50 million to install new companies. In addition, Rio Grande do Sul also develops a variety of projects and initiatives to strengthen the sector and promote the state s economy. INNOVATION ACT The state invests in specific policies to promote innovation, science and technology, and one of the main examples of this is the Innovation Act (Act no. 13196, July 13, 2009), which aims to promote the creation of strategic partnerships concerned with the pursuit of technological autonomy, training and competitiveness. Among the measures foreseen by the law are differential and simplified treatment for suppliers in the state configured as small-scale microcompanies involving innovation; support for implanting and consolidating scientific and technological parks and incubators; and authorization to institute financial and tax incentive policies, funds or special lines of credit, having as beneficiaries universities and other entities that have research units and scientists installed in the state. PRO-INNOVATION (PRÓ-INOVAÇÃO) A tax incentive program, Pro-innovation is supported by the Innovation Act and provides incentives towards the creation of new products (goods and services) and processes, but also the improvement of previously existing ones, in addition to marketing and organizational innovation activities. The companies receiving incentive from the program may simultaneously request to be included in other tax and financing incentives instituted by the state, provided their fruition is not concomitant. INNOVATE TO UNDERTAKE (INOVAR PARA EMPREENDER) The Innovate to Undertake program seeks to promote a public space for presenting science, technology and innovation projects that may have an impact on Rio Grande do Sul society. The initiative offers the opportunity for inventors and entrepreneurs to obtain guidance towards development and implementation of their creations. The program is run through a partnership between the Secretary of Science, Innovation and Technological Development, the Foundation of Science and Technology, the Brazilian Micro and Small Business Support Service and the Rio Grande do Sul s Network of Business Incubators and Technological 27 HOW TO INVEST IN RIO GRANDE DO SUL

Parks, which together select the projects to be presented. More information can be obtained via email inovarparaempreender@scit.rs.gov.br. RS TECHNO-HUB (RS TECNÓPOLE) The RS Techno-Hub program is active in regional technological development, having among its objectives the creation of a network of technological parks and promotion of innovation and entrepreneurial culture. The expansion of the parks respects each region s vocation and contemplates different sectors of the economy. Through financing from Proredes, BNDES and IRBD International Bank for Reconstruction and Development, RS Techno-Hub has a foreseen budget of R$ 80 million by the end of 2014. consolidated parks are: Tecnopuc in Porto Alegre, Tecnosinos in São Leopoldo, and Valetec in Campo Bom. TECHNOLOGY HUBS The Technological Innovation Hubs Support Program was created to integrate universities and research centers with the production sector, aiming to develop technology appropriate to each of the state s regions. There are 26 hubs in 456 cities distributed across 24 regions, for a total of 90 projects supported since 2011. TECHNOLOGICAL PARKS Technological parks are environments that can either constitute business condominiums or incubators focused on development and innovation. Altogether, the state is home to fifteen parks three consolidated and another twelve to be consolidated and the 264 companies installed in them have created 14,234 direct jobs. Since 2011, 22 projects have been supported. The three Research at University of Passo Fundo s Plateau Scientific and Technological Park Credit: Camila Domingues/Palácio Piratini 28 STATES STATES

07. INFRASTRUCTURE The state s transportation system is diverse: there are highways, waterways, railways, pipelines and airports. The highways are the most frequently used mode of transport, followed by railways and waterways. HIGHWAYS The highway system is predominant in Rio Grande do Sul, over 80% of passengers and cargo loads are transported by this mode. There are 153,960 km of highways. Easy access to the neighboring countries of Argentina and Uruguay is one of the state s main advantages. Among the main highways passing through the state are Highway BR-101, which connects Rio Grande do Sul to eleven BR-116 is one of Brazil s main highways, passing through ten states. In the photo, a stretch between Porto Alegre and Canoas Claudio Fachel/Palácio Piratini HOW TO INVEST IN RIO GRANDE DO SUL LOGISTICS other states; Highway BR-116, which comes all the way from Ceará, passing through ten Brazilian states before reaching Jaguarão at the Brazilian border with Uruguay; Highway BR-290, which crosses the state from the northern coast westward, arriving in Argentina; Highway BR-472, which cuts through the state s far Western region and reaches Barra do Quaraí on the Triple Frontier between Brazil, Uruguay and Argentina; and Highway BR-285, which starts in the state of Santa Catarina and reaches the city of São Borja, a RS city on the border with Argentina. The state has Brazil s fourth largest fleet of vehicles, 8% of the national total. 29 Investing in logistics, energy and communication is essential towards ensuring industrial competitiveness, and for this reason is a priority for Rio Grande do Sul. These axes are given priority treatment by the Secretary of Infrastructure and Logistics (SEINFRA). For its part, AGDI approaches the theme through the Board of Infrastructure and Energy, which is responsible, among other subjects, for the infrastructure plan towards development of production activity in Rio Grande do Sul, focused on diagnosing the state s current situation and proposing improvements.

WATERWAYS AIRPORTS 30 STATES Proportional to its area, Rio Grande do Sul is the Brazilian state with the most navigable waterways, 758 km. Rivers, lakes and lagoons with this purpose are divided into three watersheds: Uruguay, Guaíba and Coastal. The main navigable rivers are concentrated in Guaíba and Coastal. The connection with Uruguay is one of the main competitive advantages of the state s watershed. In addition, the state relies on ports in different regions, the main ones being in Porto Alegre, Rio Grande and Pelotas. The main route is Porto Alegre- Rio Grande, where mainly petrochemical, petroleum derivatives, soybean meal and oil, and paper pulp are transported. Between 2011 and 2013, investments in water based transportation added up to R$ 28.6 million. Port of Rio Grande Consolidated as the main port for the Southern Cone, the Port of Rio Grande has a total area of 80,000 m² and 850 m of docks. Access via highway, railway and waterway makes it one of Latin America s most strategic ports. In 2013, 626,382 containers passed through Rio Grande, for a total of 33,248,729 tons. Soybeans are the main product, with 673,576 tons being unloaded and 8,269,144 tons being loaded in 2013 alone. The Port of Rio Grande is strategically located between Southern Cone countries. Credit: Pós Produção/Divulgação SUPRG Rio Grande do Sul has airports in different cities. The main ones besides Porto Alegre s Salgado Filho International Airport are in the cities of Caxias do Sul, Passo Fundo, Rio Grande and Pelotas. Also foreseen is the construction of a new international airport in the Porto Alegre Metropolitan region, with a capacity for 40 million passengers per year. Porto Alegre International Airport Salgado Filho Salgado Filho Airport is one of Brazil s most important, with direct flights to Europe and South, Central and North America. It is the third busiest in terms of international passengers, just behind Galeão in Rio de Janeiro and Guarulhos in São Paulo. In 2012, according to Infraero s Operational Statistics Yearbook, Salgado Filho saw 96,693 aircraft operations, carried 8,261,355 passengers and handled 30,448 tons of cargo. With nearly 40,000 m² of developed area and four floors, the passenger terminal can simultaneously handle up to 28 large aircrafts. There are 32 check-in counters and ten arrival and departure jet bridges. The Air Cargo Terminal features 9500 m² of area and is capable of handling the 1500 tons of cargo exported and 900 tons of cargo imported every month. Porto Alegre s Airport is constantly being modernized and expanded, and until 2015, the runway enlargement will allow takeoff weight limits to increase from the current 333 to 362 tons. One of Salgado Filho s main advantages is its location on Porto Alegre s North Side,just 10 km away from downtown.

The state has a 3259 km network of railways and branch lines, used exclusively for cargo transport. Four terminals stand out due to their concentration of large quantities of cargo: Metropolitan Region, Passo Fundo, Cruz Alta and Uruguaiana. The main products transported are fuel, fertilizer and soybeans. HOW TO INVEST IN RIO GRANDE DO SUL Located in Caxias do Sul, one of the state s main cities, the airport serves over 34 cities in the state s highland region. The terminal has flights to São Paulo and Curitiba, and its 2000 m long runway is able to operate with medium and large aircraft, such as Boeing 737-700s. In 2012, the terminal carried 293,000 passengers. RAILROADS 31 Caxias do Sul Regional Airport Hugo Cantergiani

ENERGY Rio Grande do Sul has over 200 undertakings in operation, with 9,197,636 kw of power capacity, according to the Brazilian Electricity Regulatory Agency (ANEEL). In coming years 2,412,601 kw are scheduled to be added to the state s generation capacity, coming from 23 undertakings under construction and another 39 that have been recently approved. The state s energy supply comes from hydroelectric dams, thermoelectric plants powered by fuel oil, natural gas and coal, and alternative energy sources such as wind and small thermal. Rio Grande do Sul has also been investing in developing biofuel, such as biodiesel, ethanol and biogas. The state already has six plants to manufacture biodiesel, with annual production of 606,000,000 L and annual nameplate capacity to produce 1,363,439 m³, being Brazil s largest producer. Electricity distribution is achieved mainly through three large concessionaires: Distribuidora Gaúcha de Energia S.A. (AES Sul), Companhia Estadual de Energia Elétrica (CEEE) and Rio Grande Energia S.A. (RGE). There are also five small concessionaires and 15 rural electrification cooperatives. COAL Rio Grande do Sul is the Brazilian state with the largest number of thermoelectric plants four of the 13 plants installed in the country. Nearly 90% of Brazil s coal reserves are in the state, which represents 28,000,000,000 tons. Brazil s largest coal deposit is in the city of Candiota, 38% of the national total. The city is home to Presidente Médici plant (446,000 kw) and Candiota III (350,000 kw). The other two plants are in Charqueadas (72,000 kw) and São Jerônimo (20,000 kw). The state seeks to promote development of technology that aims to make the best use of coal, researching alternative uses, in addition to direct burning to generate electricity. Another priority is to study the potential of using the state s coal for the carbochemical industry. WIND FARMS Rio Grande do Sul has Brazil s greatest potential for wind power generation it concentrates 11% of the nation s potential, and Latin America s largest wind farm is found in Osório, on the Northern Coast. In step with the rest of the country, Rio Grande do Sul has been investing strongly in this source of energy since 2006, and there is potential to grow even more. By 2018, the state will have nameplate capacity of 2005.9 MW on 89 farms, adding up to investments of R$ 8.4 billion. Wind power potential in the state is estimated at 115 GW at a height of 100 meters. 32 STATES In addition, there is good infrastructure for power lines and electricity distribution in the state, and ease of connection with the regions with the greatest wind potential.

It also presents solid interconnection between the power transmission systems of the Southern and Southwestern Region. The fact of having manufacturers and suppliers of equipment and service specializing in the wind power chain is one of the state s main competitive advantages, and also presents itself as an opportunity for introducing factories to feed this chain, such as wind turbines and converters. broadband Internet. According to a survey published in April 2014 by the National Telecommunications Agency (ANATEL), the state has 1.41 million fixed broadband subscribers and 36.67% density (access to each 100 households). In addition, the state ended February 2014 with 16,307,592 active mobile telephone lines and teledensity of 145.64 accesses per 100 inhabitants, one of Brazil s highest percentages. RIO GRANDE DO SUL S DIGITAL INCLUSION PROGRAM Latin America s largest wind farm in operation is in Osório Credit: Claudio Fachel/Palácio Piratini COMMUNICATION Investment in communications is another pillar towards strengthening and expanding Rio Grande do Sul s industry. In order to ensure advancement of technology development, the state is betting on digital inclusion and expansion of This initiative aims to integrate the government and society through the Internet, promoting the practice of citizenship and the economic and social development of Rio Grande do Sul. The idea is to create a highspeed public network capable of expanding government services electronically and via mobile communications, improving and adding to public information and service to society. The digital inclusion program is based on a policy of reusing computers and expanding public broadband access in Rio Grande do Sul. At the Computer Reconditioning Center in the city of Viamão (CRC Viamão), young people from low income communities learn to refurbish donated equipment, in addition to being trained in the use of computer languages. 33 HOW TO INVEST IN RIO GRANDE DO SUL

08. EDUCATION, SAFETY AND HEALTHCARE EDUCATION Rio Grande do Sul is a reference point in education, with some of Brazil s best rates in the sector, which reflects on the high quality of the state s labor force. According to the Brazilian Institute of Geography and Statistics (IBGE), the state has one of Brazil s lowest illiteracy rates, only 4.5%. The average expectancy for formal education is 10 years, ahead of the national average of 9.54. The state also has one of the highest percentages of the adult population that has concluded elementary, secondary or higher education, always ranking in the top ten. In 2013 alone, the state invested R$ 7.1 billion in education. PROFESSIONAL TRAINING The state has broad technical education coverage, with over 400 establishments concerned with professional education, adding up to over 2000 courses in a variety of institutions. Among the initiatives that seek to foster and train the sector, the Rio Grande do Sul Secretariat of Education (SEDUC) promotes initiatives like the Professional Education School Show (Mostra das Escolas de Educação Profissional), which discloses research work done in classrooms of the state and city s public school network. With the same idea, it promotes the Professional Education Science and Technology State Fair (Feira Estadual de Ciência e Tecnologia da Educação Profissional). In addition, the Rio Grande do Sul Pact for Professional, Technical and Technological Education (Pacto Gaúcho pela Educação Profissionalizante) aims to organize a collaborative network between government, university, business and workers institutions in Rio Grande do Sul, integrating service of regional demands for professionalization with the state s new development agenda. 34 STATES Rio Grande do Sul has one of Brazil s highest literacy rates. Credit: Camila Domingues/Palácio Piratini The initiatives aim to promote knowledge, research, and professional, technical and technological qualification, as well as educating state public professors and servants. The role of the state is to, after identifying each region s needs for training, articulate and coordinate all the

programs that benefit the society. Another initiative, the National Program for Access to Technical Education and Employment (PRONATEC), by the federal government, aims to expand and internalize the supply of qualification courses. Rio Grande do Sul is the state with the largest number of students enrolled in the program. Coordinated by SEDUC in the state, the courses are taught at SENAC (National Service for Trade Trainning), SENAI (National Service for Industrial Trainning), the Rio Grande do Sul Federal Institute (IFRS), the Farroupilha Federal Institute (IF Farroupilha), the Rio Grande do Sul Institute, and Frederico Westphalen Agricultural School. In 2013, funding to professional education schools increased from R$ 3.6 million to R$ 9 million a year, which represents 150% growth in comparison with 2012. HIGHER EDUCATION Rio Grande do Sul has some of the country s best higher education institutions, such as the federal universities of Rio Grande do Sul (UFRGS), Santa Maria (UFSM), Pelotas (UFPel), and the private Universidade Católica of Rio Grande do Sul (PUCRS) and Universidade do Vale do Rio dos Sinos (University of the Sinos River Valley UNISINOS). In the General Course Rating, the Brazilian Ministry of Education s indicator of higher education institution quality, the state has two universities among the country s ten best: UFRGS and the Universidade Federal de Ciências da Saúde de Porto Alegre (Porto Alegre Federal University of Health Sciences UFCSPA). Altogether, Rio Grande do Sul has 125 higher education institutions, sources of research and technological innovation. Of these, ten are public nine federal, including institutes, universities and foundations, and one belongs to the state, the Universidade Estadual do Rio Grande do Sul (Rio Grande do Sul State University UERGS). EXTENSION PROGRAMS Rio Grande do Sul has 356 graduate programs and courses (doctorate, master s and professional master s) recognized by the Coordination of Higher Education Personal Improvement (CAPES). The state has 6.25 master s and 2.26 doctors for every 1000 inhabitants, the highest rate in southern Brazil, and the fourth highest nationwide, behind only Rio de Janeiro, São Paulo and Federal District, according to a study by Centro de Gestão e Estudos Estratégicos (Center for Management and Strategic Studies). SAFETY According to data from the Brazilian Public Safety Yearbook, in 2012, Rio Grande do Sul invested 5.5% of its budget in safety. In 2013, the state increased the amount by 27.8% over the 2007-2010 average, with R$ 348.1 million being added to the amount from the previous year, for a total of R$ 2.5 billion. The state has the fourth lowest homicide rate in the country and every year, this and other rates of criminality are going down as a result of this increase in investments in safety. HEALTH With Brazil s third highest life expectancy and second lowest infant mortality rate, Rio Grande do Sul has 21,230 healthcare establishments, including 763 health clinics, 318 general hospitals and 17 specialized hospitals. 35 HOW TO INVEST IN RIO GRANDE DO SUL

A report by the Court of Auditors of the Union published in 2014 showed that the state is the second in number of hospital beds per thousand inhabitants, with 3.05 the national average was 2.6, and fourth in number of doctors, 2.37 for every 1000 inhabitants. In 2013, investments in healthcare reached their highest percentage in the history of the state s public management, with R$ 2.8 billion. In terms of total spending in the sector, this amount is 12.3% of the Net Revenue from Taxes and Transfers, 43% higher than the previous year. Rio Grande do Sul also relies on some of the largest centers of reference in the field of healthcare, such as the Instituto do Cérebro (Brain Institute), o Hospital de Clínicas de Porto Alegre (Porto Alegre Clinical Hospital) and Dom Vicente Scherer Hospital, part of the Complexo Hospitalar Santa Casa da Misericórdia (Santa Casa Hospital Complex), which rely on a variety of specialties and are internationally recognized. 36 STATES

9. TOURISM AND CULTURE The Capital of Porto Alegre is one of the main destinations for cultural and business tourism. Porto Alegre has one of Brazil s most complete event centers, the FIERGS Event Center, prepared to host activities of different sizes from shows to conventions, with a total area of 36,724.85 m², just 15 km from downtown and 12 km from Salgado Filho International Airport. The city is sixth in the number of international events organized in Brazil. For its part, the Gaucho Highlands are the ideal destination for eco-tourism and adventure tourism, on account of the large number of waterfalls and nature reserves. The Antas River Adventure Hub is a well-established destination for fans of radical sports like hang gliding and rafting. Especially in the winter, the cities of Gramado and Canela receive thousands of tourists from all over the world, The state also features nature reserves like Aparados da Serra National Park, home to Itaimbezinho, one of Brazil s largest canyons, and Taim Ecology Station, a 34,000 hectare reserve that protects species like capybara, river rats, crocodiles, turtles, crested screamers and cattle egrets, among others. 1 - The Christmas Lights of Gramado are a well established event in the state Credit: Leonid Strelioev 2 - In Vineyard Valley, in the Gaucho Highlands, tourists can learn about the state s wine production up close Credit: Fabiano Mazzotti 3 - Full of parks, nature reserves and waterfalls, RS is the right destination for anyone wanting to be in contact with nature Credit: Camila Domingues/Palácio Piratini HOW TO INVEST IN RIO GRANDE DO SUL Rio Grande do Sul has diversified vocations for tourism, leisure and business, from the landscapes of the Gaucho Highlands (Serra Gaúcha), to the large supply of event centers in Porto Alegre. According to a survey by the Secretary of Tourism, in 2013, the state had 1271 lodging establishments. These establishments provided 45,800 units and 107,387 beds. From 2011 to 2013, the budget destined to tourism rose from R$ 15.1 million to R$ 40.8 million. attracted by the region s low temperatures. In Gramado, the movement increases further during events like the Film Festival, in addition to Natal Luz (Christmas Lights) and Chocofest at Easter. Vale dos Vinhedos (Vineyard Valley) is another famous destination, with Brazil s highest concentration of wine producers. 37 TOURISM

CULTURE Rio Grande do Sul has 397 museums, among them, outstanding attractions like the Iberê Camargo Foundation and the Rio Grande do Sul Museum of Art. Admittance to both is free of charge. According to the study Museus em Números (Museum Statistics), conducted by the Brazilian Institute of Museums in 2011, the state comes in the first place in number of institutions per inhabitant. There is approximately one museum for every 26,600 people, while the national average was one institution for every 60,822 people. its 60 th edition in 2014. In the most recent addition, the fair was visited by approximately 1,450,000 people, selling 420,384 books over 17 days, 2.26% percent more than the previous year. The Mercosur Biennial is another well-established event in the state. The international contemporary art show has been held in the capital since 1997, and the last edition in 2013 brought 60 artists from 25 countries, with over 1 million visitors of different nationalities attending the event. A survey by the Ministry of Culture points out that Rio Grande do Sul has 76 theaters, the fifth highest number in the country. In its capital, the proportion is 38,000 citizens per theater, putting the city in second place in Brazil. One of Brazil s most traditional theaters is found in Porto Alegre, Theatro São Pedro, one of Latin America s largest cultural complexes. Rio Grande do Sul also has the highest number of public libraries in southern Brazil at 465 institutions. Among the main cultural events carried out in the state is the Feira do Livro (Book Fair) held every year on Praça da Alfândega in downtown Porto Alegre. The fair celebrated The Iberê Camargo Foundation is one of RS s main museums and is located in Porto Alegre Credit: Alfonso Abraham 38 STATES

10. American Chamber of Commerce Porto Alegre Av. Dom Pedro II, 861-8 th floor Porto Alegre - RS - Brazil Zipcode: 90550-142 Phone: +55 (51) 2118-3705 amcham.portoalegre@amchambrasil.com.br www.amcham.com.br/porto-alegre Badesul Rua General Andrades Neves, 175 Porto Alegre - RS - Brazil Zipcode: 90010-210 Phone: +55 (51) 3284-5800 faleconosco@badesul.com.br www.badesul.com.br Banrisul Rua Caldas Júnior, 120 Porto Alegre - RS - Brazil Zipcode:90018-900 ouvidoria@banrisul.com.br Phone: +55 (51) 3215-1515 www.banrisul.com.br USEFUL CONTACTS Extreme South Regional Development Bank (BRDE) Rio Grande do Sul Agency Rua Uruguai, 155-1 th floor Porto Alegre - RS - Brazil Zipcode: 90010-140 Phone: +55 (51) 3215-5000 brdepoa@brde.com.br www.brde.com.br FIERGS (Federation of Industries of the State of Rio Grande do Sul) Av. Assis Brasil, 8787 Porto Alegre RS - Brazil Zipcode: 91140-001 Phone: +55 (51) 3347-8787 fiergs@fiergs.org.br www.fiergs.org.br International Relations and Cooperation Advisory Council Avenida Borges de Medeiros, 1501-17 th floor Porto Alegre - RS - Brazil Zipcode: 90119-900 Phone: +55 (51) 3288.6138 acri@gg.rs.gov.br www.relinter.rs.gov.br 39 HOW TO INVEST IN RIO GRANDE DO SUL

Rio Grande do Sul Commerce Registry (JUCERGS) Avenida Júlio de Castilhos, 120 Porto Alegre - RS - Brazil Zipcode: 90030-130 Phone: +55 (51) 3216-7500 atendimento@jucergs.rs.gov.br www.jucergs.rs.gov.br Secretariat of the Environment Av. Borges de Medeiros, 261 Porto Alegre - RS - Brazil Zipcode: 90020-021 Phone: +55 (51) 3288-8100 sema@sema.rs.gov.br www.sema.rs.gov.br Rio Grande do Sul Development Agency (AGDI) Travessa Francisco de Leonardo Truda, 40-23 th floor Porto Alegre - RS - Brazil Zipcode: 90010-050 Phone: +55 (51) 3079-7000 info@agdi.rs.gov.br www.agdi.rs.gov.br Secretariat of Infrastructure and Logistics Av. Borges de Medeiros, 1501 7 th floor Porto Alegre - RS - Brazil Zipcode: 90119-900 Phone: +55 (51) 3288.5300 gabinete@seinfra.rs.gov.br www.seinfra.rs.gov.br Secretariat of Culture Av. Borges de Medeiros, 1501-19º andar Porto Alegre - RS - Brazil Zipcode: 90119-900 Phone: +55 (51) 3288-7540 gabinete@sedac.rs.gov.br www.cultura.rs.gov.br Secretariat of Science, Innovation and Technological Development Av. Borges de Medeiros, 1501-7 th floor Porto Alegre - RS - Brazil Zipcode: 90119-900 Phone: +55 (51) 3288-7400 gabinete@scit.rs.gov.br www.scit.rs.gov.br 40 STATES Secretariat of Development and Investment Promotion (SDPI) Av. Borges de Medeiros, 1501-7 th floor Porto Alegre - RS - Brazil Zipcode: 90119-900 Phone: +55 (51) 3288-7400 gabinete@scit.rs.gov.br www.scit.rs.gov.br Secretariat of Solidarity Economy and Support for Micro and Small Businesses Av. Borges de Medeiros, 1501-16 th floor Porto Alegre - RS - Brazil Zipcode: 90119-900 Phone: +55 (51) 3288-5550 comunica@sesampe.rs.gov.br www.sesampe.rs.gov.br

Secretariat of Tourism Av. Borges de Medeiros, 1501-10 th floor Porto Alegre - RS - Brazil Zipcode: 90119-900 Phone: +55 (51) 3288-5400 secretaria@turismo.rs.gov.br www.turismo.rs.gov.br 41 HOW TO INVEST IN RIO GRANDE DO SUL

11. ABOUT OUR SPONSOR Rio Grande do Sul Development Agency (AGDI) is the executive branch of the Secretariat of Development and Investment Promotion (SDPI) and belongs to the State Development System, along with the Extreme South Regional Development Bank (Banco Regional de Desenvolvimento do Extremo Sul BRDE), Badesul and Banrisul. Infrastructure for Development (Infraestrutura para o Desenvolvimento), Program to Strengthen Production Chains and Local Production Arrangements (Programa de Fortalecimento das Cadeias e Arranjos Produtivos Locais) and the Production Extension and Innovation Project (Projeto Extensão Produtiva e Inovação). 42 STATES It works by prospecting new economic opportunities for Rio Grande do Sul, with the mission to promote economic development, improving the regional production environment and stimulating innovation, competitiveness and local management. It is among its attributions the promotion of activities and the state s participation in national and international events with the goal of attracting investments, as well as hosting entrepreneurs interested in investing in the state, bringing them closer to different government spheres. AGDI participates in collaborating and carrying out the Industrial Policy, a set of instruments to promote the state s economic development. Among the programs coordinated by the agency are RS Ocean Industry (RS Indústria Oceânica), RS Wind (RS Eólica), Commercial Promotion and Investments Attraction (Promoção Comercial e Atração de Investimentos), For more information, please contact: Rio Grande do Sul Development Agency (AGDI) Travessa Francisco de Leonardo Truda, 40-23 th floor Porto Alegre - RS - Brazil Zipcode: 90010-050 Phone: +55 (51) 3079-7000 info@agdi.rs.gov.br www.agdi.rs.gov.br RIO GRANDE DO SUL STATE GOVERNMENT OF STATE DEPARTMENT OF DEVELOPMENT AND INVESTMENT PROMOTION

43 HOW TO INVEST IN RIO GRANDE DO SUL