Brazil has passed a new legislation allowing foreign companies to invest in private hospitals (Brazilian Federal Law # 13,097/2015). It changed Brazilian Federal Law # 8,080/1990 which regulates the conditions for the promotion, protection and recovery of health, as well as the organization and functioning of the corresponding services and agents authorized to perform activities related to the health sector.
As a result of this scenario, it is now allowed foreing players to make direct or indirect investments, including the acquisition of controlling shares, in hospitals (general or specialized), clinics, laboratories etc., even in institutions or corporations organized as non-profitble or philanthropic.
The participation of foreign capital, directly or indirectly, is allowed in the following cases:
- donations of international bodies associated to the United Nations, of technical cooperation entities and of financing and loans;
- legal entities with purposes to install, operate and exploit:
- general hospital, including philanthropic, specialized hospital, polyclinics, general clinic and specialized clinic; and
- actions and researches related to family planning;
- health services maintained, non for profit, by companies, for healthcare services for their employees and dependents, without any encumbrances to the social security; and
- other cases that may be regulated under specific legislation.
This new legislation created and added the Article 53-A to the Brazilian Federal Law 8,080/1990 to allow foreign investment in relation to laboratories that perform human genetic research, production and supply of pharmaceutical and other products for the health sector and laboratories for clinic analysis and diagnostics through images.
The end of the restriction that kept foreign investors from investing in Brazil will also allow local private healthcare providers to access an important form of financing at a time when loans from conventional financial institutions are becoming costly, or difficult, to reach. It also may imply that more middle-class Brazilians shall afford to shift over to private care instead of being forced to use the government doubtful universal healthcare system.
Finally, there are no big foreign players in healthcare in Brazil right now. Thus, this legislative innovation can be understood as an opportunity to invest in services and technology that are currently not available in the country.
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