The EU Artificial Intelligence Act and the Brazilian AI Market

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Introduction

The Artificial Intelligence Act (EU AI Act), enacted in 2024, marks a new phase in the global regulation of artificial intelligence by establishing a structured legal framework governing the development, deployment, commercialization, and use of AI systems within the European Union. It represents a regulatory milestone that consolidates artificial intelligence as an autonomous legal object, a truly sui generis category within contemporary technological regulation.

As with any regulatory intervention affecting economic activity, particularly in highly complex technological sectors, the implementation of the EU AI Act entails significant structural and compliance costs, requiring companies to adopt documentation procedures, algorithmic governance mechanisms, risk management systems, and ongoing supervisory controls.

Within this context, international markets increasingly emerge as strategic alternatives for innovative companies seeking legally stable environments that are less densely regulated with respect to artificial intelligence. It is in this global landscape that Brazil appears as a potentially attractive jurisdiction.

A Necessary Clarification

This article does not intend to suggest that Brazil lacks regulation, nor does it seek to promote the misconception that the Brazilian digital environment operates in a regulatory vacuum.

On the contrary, although Brazil has not yet enacted a consolidated and specific regulatory framework governing artificial intelligence, its legal system provides sufficient mechanisms to prevent technological abuse, whether by domestic or foreign companies.

The absence of sector-specific legislation does not equate to a normative void. AI systems remain subject to general civil liability rules, the principle of objective good faith, consumer protection regulations, competition law, and other applicable statutory frameworks.

Particular attention must be given to foundational digital statutes such as the Lei Geral de Proteção de Dados, Brazilian General Data Protection Law, Law No. 13,709/2018, and the Marco Civil da Internet, Brazilian Civil Rights Framework for the Internet, Law No. 12,965/2014, which impose rigorous standards regarding personal data processing, intermediary liability, and digital governance.

Accordingly, the structural legal costs of a technology company, whether AI-focused or operating in more traditional technological fields, remain substantially aligned with those applicable to other business sectors, subject to the particularities of each business model.

Brazil’s competitive distinction lies not in the absence of regulation, but rather in the current lack of a comprehensive AI-specific regime equivalent to the EU AI Act, thereby eliminating additional compliance expenditures associated with risk classification systems, mandatory audits, and prior certifications typical of the European model.

Furthermore, Brazil offers relevant tax incentives for companies engaged in information technology and software development, strengthening its economic attractiveness.

Brazil as a Strategic Jurisdiction

Brazil ranks among the largest technology consumer markets in the world. It is the fifth-largest gaming market globally and among the top fifteen countries in revenue generation within the sector, generating billions of dollars annually.

Recent studies indicate that approximately 54% of the Brazilian population already uses some form of artificial intelligence-based solution, a rate exceeding the estimated global average of 48%.

At the corporate level, in Brazil, AI adoption has tripled over a two-year period.

These indicators demonstrate strong societal and business receptivity to technological innovation, creating a favorable environment for testing, development, and expansion of AI-driven solutions.

Tax Incentives

Brazil’s so-called Lei do Bem, Law No. 11,196/2005, remains in force, establishing tax incentives for technological innovation. The statute created, among other mechanisms, the Special Tax Regime for the IT Services Export Platform, REPES, and the Special Tax Regime for Datacenter Services, REDATA.

These regimes provide for the suspension or reduction of certain federal taxes levied on the acquisition of goods and services intended for research, development, and technological innovation, thereby lowering operational costs for companies engaged in software development and IT service exports.

From an economic perspective, these instruments contribute to positioning Brazil as a competitive jurisdiction for technology-driven activities.

The Risks of Establishing a Tech Company in Brazil

Companies that perceive Brazil merely as a regulatory loophole commit a significant strategic miscalculation. The absence of AI-specific legislation does not imply the absence of legal accountability.

The Brazilian General Data Protection Law imposes robust obligations concerning transparency, information security, governance, and accountability, elements that are central to any algorithmic architecture.

Additionally, the Consumer Defense Code and the general civil liability framework allow for expansive judicial interpretation, including the potential application of strict liability in cases involving damages arising from automated systems.

Brazil’s institutional environment also warrants attention. The Public Prosecutor’s Office has historically adopted a proactive stance in matters involving technology and fundamental rights, and Brazilian courts demonstrate a consistent tendency to prioritize consumer protection and human dignity.

In this context, regulatory fragmentation does not reduce legal risk, it merely redistributes it in less predictable ways for inattentive operators.

Financially, Brazil may represent a significant opportunity. Legally, however, such opportunity materializes only when accompanied by solid governance structures, preventive regulatory planning, and a multidisciplinary risk management approach.

Temporal Considerations and Regulatory Convergence

The legislative debate concerning artificial intelligence in Brazil remains ongoing. It is plausible that a future national regulatory framework may incorporate international standards, potentially influenced by the Artificial Intelligence Act.

Companies entering the Brazilian market without anticipatory legal architecture may face substantial restructuring costs should comprehensive regulation be enacted.

Strategic expansion into Brazil should therefore not be grounded in the absence of specific regulation, but rather in structured planning and governance models capable of adapting to dynamic regulatory scenarios.

Conclusion

The Artificial Intelligence Act may indirectly encourage technology companies to consider emerging markets as part of their international expansion strategies, particularly in light of increased compliance costs and regulatory complexity within the European Union.

However, interpreting such movement as mere regulatory evasion is overly simplistic. The contemporary global environment favors companies capable of structuring consistent transnational legal models that operate efficiently across multiple regulatory systems.

The true competitive advantage lies in building an integrated legal architecture, one that harmonizes governance, compliance, risk management, and contractual structuring across jurisdictions.

In the current technological race, success does not belong to those who select the “least regulated” country, but to those who design resilient structures capable of navigating regulatory borders with predictability, stability, and legal certainty.

Clara Tackla de Oliveira

Brazilian Lawyer (OAB/ES 36.495) - Strategic Legal Architect for Scalable Digital Governance

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