Incentives for Mobile App development in Brazil

According to recent data, Brazilian smartphone users currently seek 92% of the applications from foreign developers, a harsh reality for a country that wants to confirm its presence in the digital environment.

With a growing group of national mobile app developers, Brazil is in serious need of mobile app production incentives. Some initiatives in the past have tried to promote app development with varied results, while present ones try to pave way for developers in the country.

Smartphone tax relief

A Brazilian law put in force in October 2013 called Lei do Bem releases smartphone manufacturers from paying certain taxes as an incentive for price reduction and wider adoption of these products by the population.

Smartphone manufacturers that qualify for this relief are awarded with a reduction in the tax burden of 9,25%. The relief is related to the PIS and Cofins taxes as a first measure to reduce prices to the final consumer.

When the law first came into effect to be eligible for this benefit it required manufacturers to include at least five apps developed in the country for smartphones. The number of national apps required for the tax deduction is 30 in Q3 2014, and will be increased to 50 by December 2014.

With this measure the government aimed to generate more visibility for national software to the population by spreading the apps to a whole generation of mobile devices.

Initiatives by private companies

Private companies have held mobile development contests and app incubator programs in Brazil for a variety of reasons. Most of them were directed to stimulate a developer environment for their own platforms in the country.

Some examples of past initiatives include:

• Embarcadero: North American database tool developer held a contest in 2013 for Brazilian Android and iOS developers called “Dê um App para quem precisa” which aimed to promote apps developed using the Pascal programming language and awarded the winner a BRL 10,000 gift card

• Nokia: Phone manufacturer that held a contest in 2013 called “Nokia Create” for app developers to come up with their own software environment that followed a set of “missions” set up by the company and awarded the winner a trip to the Mobile World Congress 2014

• Microsoft: Technology giant and owner of the Nokia brand launched a program called “DVLUP” designed to incentivise porting of apps from Android to their proprietary mobile operating systems, awarding devices and accessories to subscribing developers

• Blackberry: Phone manufacturer that held a contest called “Built for Blackberry” for developers to their proprietary operating system that awarded best apps within certain categories with financial prizes and mobile devices

Startup contests

Many Brazilian app developers enlist their projects as Startups on a variety of contests that seek to link the most promising enterprises to interested investors around the world.

Theses events, organized by a variety of companies and institutions, have served as a platform for investment and visibility gains for some of the most successful stories within the Brazilian developer world.

Some Startup contests relevant to developers in Brazil include:

• Startup Weekend: Event created by the UP organization and held in a variety of cities across the country that seek to educate and award entrepreneurs with the contact of investors eager to take part in and help the growth of their enterprises

• PREI: A contest for Startups organized by Brazilian media group RBS that awards the most promising entrepreneurs with a monetary sum and a trip to Silicon Valley

INOVApps contest

In August 2014 The Brazilian Ministry of Communications launched a contest for national developers of mobile apps with the aim of creating an incentive for production of this type of software in the country.

With this contest, called INOVApps, the national government seeks to expand the fraction of homegrown software in the hands of the country’s population.

The program will award developers a financial incentive for the production of free, useful applications for iOS, Android, Windows Phone, Blackberry, HTML 5 platform and the Brazilian interactive TV middleware Ginga.

Eligible software must fall into two categories: apps or “serious” games. The later one indicates interactive applications designed for educational and informative purposes that make use of regular game design.

Additionally, all software must be dedicated to the following themes or types of use:

• Consumer rights defense
• Education and teaching
• Health
• Urban mobility
• Public safety
• Tourism and Large Events
• Public utility collaborative management
• Public Policies data processing
• Publicity of public utility campaigns

Individuals or micro, small and medium companies are allowed to be contestants. Each must submit a maximum of two application projects to be judged by the ministry and chosen to be awarded the incentives.

By the beginning of November 2014, 25 national app developers will be chosen to receive BRL 80,000 as an incentive for their production while 25 chosen game developers will receive BRL 100,000. These sums will be paid during the first semester of 2015 following constant evaluation of the developed software.

All the applications developed will be released for free according to contest regulation.