Researchers point out the need to diversify the productive base of the Tierra del Fuego Free Zone.

An investigation carried out by Argentina’s Fundar study center estimated that the tax exemption regime in the Tierra del Fuego Free Zone currently has a fiscal cost of just over US $1 billion per year. This figure equals 0.22% of the country’s Gross Domestic Product (GDP). Because of this, the organization proposes to reorganize the Free Zone following a productive diversification plan to be developed during the period 2024-2035.

The work on this issue was directed by Tomás Bril Mascarenhas, director of Productive Policy at Fundar, and Juan Carlos Hallak, a researcher at the University of Buenos Aires and Conicet, Argentina’s National Scientific and Technical Research Council. They affirm that if the initiative materializes, it will result in savings for Argentina totaling US $5.9 billion over 11 years and US $900 million annually in subsequent years. However, the proposal received criticism from the electronics sector in the Free Zone, which maintains that the change in the productive structure of the Free Zone “is already in underway.”

Fundar proposes to reorganize the Tierra del Fuego Free Zone

Specialists maintain that the geopolitical objective of Law 19,640, the regulations that established the Tierra del Fuego Free Zone in 1972, of promoting population growth “has been more than fulfilled.” The island went from 13,000 inhabitants that year to 190,000 in 2022. “The free trade regime encouraged the establishment of new productive establishments and the expansion of private employment for the growing population.

The research conducted by Fundar includes a diagnosis and a proposal to reformulate the system, which has as its central point “to stop rewarding the turnover of companies and to start encouraging the addition of local value and exports.”  The proposal refers to the series of tax and customs benefits established for the industry that is located in the Tierra del Fuego Free Zone. These include an exemption from payment of import duties, a tax credit for VAT on sales made, and the lowest rate of internal taxes for manufactured electronic products, among other incentives.

The work confirms that the industries located in the Tierra del Fuego Free Zone employ some 11,000 people. This number equals 30% of the total registered wage earners in Tierra del Fuego’s private sector. The electronics sector is the largest employer, generating some 8,500 jobs. Activities in the Tierra del Fuego Free Zone include printed circuit assembly, and the assembly and the final test of cell phones, televisions, and air conditioners. The Fundar study proposes the expansion of the productive base to promote new sectors such as tourism, the knowledge economy, energy, and petrochemicals, among others.

Long-term project for the Tierra del Fuego Free Zone

The proposed revision of the fiscal incentives program establishes a gradual implementation schedule between 2024 and 2035. These new rules stipulate removing all non-tariff restrictions and eliminating the internal tax gap between national and imported electronic products. It establishes a common rate of 6.55%, except for cell phones, for which it will be gradually reduced to 0%.

Then, between the second and the sixth year, the importation of inputs would gradually pay VAT, while between the seventh and eleventh year, it would pay the corresponding tariffs. According to the project, the value added in Argentina would continue without paying VAT and would also benefit from the effective protection provided by tariff escalation.

According to the estimates of the researchers, whose proposal they consider should go through the National Congress by 2035, the production of cell phones in the Tierra del Fuego Free Zone will have ceased entirely.

Regarding employment, they consider that 7,254 jobs would be lost during the 11 years of implementation. However, they would be compensated with a social protection and labor retraining program related to filling positions in the new production base. This initiative would have a fiscal cost to Argentina of between US $300 and US $500 million over the decade it will be implemented.

“The reorganization of the Tierra del Fuego Free Zone is projected to generate significant fiscal savings, both due to the gradual substitution of national production (which does not pay taxes) by imports (which do), as well as the taxes on imported inputs that the activity on the island would begin to pay.” This has been affirmed by Fundar. For this sum, “the accumulated tax savings would add up to approximately  US $5.8  billion in the 11 years, plus the additional US $881 million each year starting in 2034. “(This represents 82.4% of the current fiscal cost of the regime) . “

The vision of electronics in the Tierra del Fuego Free Zone

The Association of Argentine Terminal Electronics Factories ( Afarte ), which brings together the leading consumer electronics manufacturers in the Free Zone, was critical of Fundar’s project. “The document raises the need to review the free trade regime to carry out a change in the province’s productive structure, which already exists.” Representatives of Afarte explained that “it is precisely what was reflected in the last extension of the free trade zone regime that was carried out in 2021 and that provided for the creation of the Fund for the Expansion of Tierra del Fuego’s Productive Matrix.”

“It is a fund to which companies are already contributing a percentage of their income and which is administered by the State,” assured representatives of Afarte. Said contribution, which they estimate at a total of US $100 million per year, “has two objectives: to finance the improvement of the competitiveness of the current industry in the Tierra del Fuego Free Zone (through infrastructure, logistics,  and connectivity, etc.) and, on the other hand, the development of new productive ventures aimed at expanding the economy of Tierra del Fuego to include sectors such as the knowledge economy, tourism, energy, and others.”

2022 was a year of immense challenges. The war in Ukraine, inflation, and increases in interest rates, as well as Colombia’s electoral climate that brought uncertainty due to a change in government, negatively affected the influx of investments in the country. However, according to the estimates on the balance of Foreign Direct Investment for 2022 for the Bogotá Region, carried out by the world-class investment promotion and event attraction agency, Invest in Bogota, the capital remains the preferred destination for foreign direct investment in Colombia.

Said balance reveals that, in addition to being the recipient of 64.7% of the country’s new and expansion FDI projects, foreign direct investment in the Bogota region created 64.5% of the country’s new jobs last year.

Most foreign direct investment in Colombia landed in Bogotá

“In 2022, 143 projects for new and expanded foreign direct investment in Colombia were carried out in the Bogotá Region. In total, these were valued at approximately USD 1.5 billion. This economic activity generated 20,952 quality jobs,” says Isabella Muñoz, executive director of Invest in Bogota. More than 30 different countries invested in the city last year. The diversity of interested markets shows the potential and confidence of foreign companies to expand their operations in Bogotá and its metropolitan area.

The balance also shows that most of the investment projects that the city received come from countries such as the United States (30.8%), Spain (9.1%), Mexico (6.3%), and Argentina (6.3%). However, other Latin American countries such as Brazil (4.9%) and Chile (4.2%), European countries such as Germany (4.9%) and Switzerland (3.5%), and finally, Japan (3 5%), which was the leading Asian investor, surpassing China, contributed to foreign direct investment in Colombia and the country’s capital.

Regarding the sectors where FDI projects were carried out, software and IT services are positioned as the leader in attracting investment to the Bogotá Region. During the last five years, this industry represented 20.2% of the city’s new FDI projects.

With a participation of 16.8%, corporate services are positioned as the second sector with the highest number of completed projects for foreign direct investment in Colombia and its capital city. These figures show the vocation of Bogotá as a city of services. The availability, quality, and cost of labor, advances in bilingualism, and the strategic position of the metropolis have contributed to investors perceiving the region as an ideal destination for developing their services and programming activities.

Investment in the communications industry is also gaining relevance in the realm of foreign direct investment in Colombia. In 2022, this sector had the third-highest investment projects, representing 9.1%. The pandemic also increased the demand for digital services, which require more significant investment in data processing and hosting services such as data centers, ICT, and internet infrastructure.

Finally, other vital sectors in attracting FDI in the Bogotá Region in 2022 were financial services (7.7%), textiles (4.2%), automotive (3.5%), and consumer products (3.5%).

Foreign Direct Investment (FDI) Outlook for 2023

The prospects for world FDI in 2023 are down since the world’s leading economies may enter a recession or register low growth. Under this scenario, many companies contemplate strengthening their current operations instead of expanding into new markets.

Despite this projection, the outlook for Latin America would be different since FDI trends indicate that, during 2023, the relocation of operations by multinationals near their headquarters (nearshoring) will boost investment projects. Thirty percent of the companies that developed FDI projects in Latin America during the last two years indicated that proximity to markets and consumers was the main reason for expanding in the region.

In this sense, the prospects for investment in Colombia and its capital city during 2023 are also positive. According to a survey carried out by Invest in Bogota of 56 foreign companies, 75% of them have contemplated investment projects in the Bogotá Region for this year. This figure reflects a high level of optimism regarding the city’s business climate for this year, particularly in IT, BPO, and creative industries.

Macroeconomic and reform issues affect decision-making

However, at the national level, the fluctuation of the exchange rate and inflation could affect the flow of foreign direct investment in Colombia this year. Additionally, concerning the new government’s reforms, 64% of the companies surveyed stated that the tax and labor reforms would affect their investment decisions in the city.

Although 2023 is shaping up to be a year of significant challenges to attract relevant foreign direct investment in Colombia, there are also immense opportunities for expanding and reinvesting in already established foreign companies.

“In 2023, a moderate increase in the number of FDI projects arriving in Bogotá can be expected, which may be greater if good macroeconomic results occur at the country level,” says Muñoz. “Invest in Bogota has identified 73 investment opportunities, which would generate an estimated investment of USD 1.3 billion and approximately 20,500 jobs,” she concludes.

Now that Chile is a member of the Trans-Pacific Partnership Agreement, the treaty provides for tariff relief related to approximately 1,200 products.

As of February 2023, Chile is a member of the Trans-Pacific Partnership Agreement (CPTPP). The ambitious free trade network that connects 11 countries on both shores of the Pacific is also known as TPP11. After almost five years of negotiations, the Government of Gabriel Boric announced the entry into force of the controversial trade pact that his coalition, the Broad Front, rejected in Congress. With the promulgation of the treaty, around 1,200 products will be subject to tariff relief. “In some cases, it will benefit our exports to the countries that are members of the treaty, and in other cases, we will be able to import some products at a lower cost,” explained the Minister of Economy, Mario Marcel, when asked for comments.

The Trans-Pacific Partnership currently has ten members

Now that Chile is a member of the Trans-Pacific Partnership Agreement, it is the tenth economy to become a full member of the trade pact promoted in 2018 under the second government of Michelle Bachelet. The other countries that are part of the fourth-largest commercial integration treaty in the world are Australia, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and Brunei Darussalam. It only remains for the latter to ratify it. Together, the member countries represent 12.2% of the world economy. Other countries have shown interest in joining or have formally applied. The most advanced is the United Kingdom, which is working to become the first European member of the bloc to join this year and, as reported by the British Administration, “negotiations are progressing well.”

With the full entry into force of the CPTPP, there will be reductions in around 3,000 tariff lines: 1,228 subheadings or products, of which 48% belong to manufacturing, 33% to agriculture, and 15% to fishing and aquaculture. In 2022, 14% of Chilean exports went to the rest of the treaty’s member countries. The ten countries represent about 34% of the stock of foreign investment in Chile as of 2021 and 31% of Chilean investments abroad.

A meeting in February was the first time Chile participated as a full member in a virtual meeting of senior officials of the CPTPP, coordinated by New Zealand as the host country. This is according to the Chilean Foreign Ministry. During the meeting, the strategic aims of the treaty for the current year were discussed. These priority issues include the green economy, electronic commerce, and the integration of new members.

The Undersecretary of International Economic Relations, José Miguel Ahumada, contrary to certain aspects of the agreement, said Tuesday that the department he leads would evaluate the impact of the treaty on Chile’s export matrix, “emphasizing the analysis of products with greater technological content, environmental issues, gender and trade and the inclusion of small and medium-sized enterprises.”

Chile is a member of the Trans-Pacific Partnership Agreement that objects to its investor-state dispute-resolution mechanisms

Ahumada has insisted that the agreement produces “marginal” trade gains and has worked with the other member countries to exclude Chile from the investor-state dispute resolution mechanisms incorporated into the text. As a result, Chile and New Zealand signed a bilateral letter, or side letter, that annuls the mechanism this past February. Mexico and Malaysia have also committed to doing the same. “The Undersecretariat for International Economic Relations ( Subrei ) will continue to work together with its commercial partners within the CPTPP and in other bilateral and multilateral spaces to substantially reform the dispute resolution mechanisms between investors and States to protect the autonomy strategy of the State,” said the Subrei in a statement issued recently.

In 2019, the Chamber of Deputies approved Chile’s entry into the treaty with 77 votes in favor and 68 against. The right bloc and a few members of the Christian Democrats, the Radical Party, and the Socialist Party gave the bill the green light to continue advancing in the Senate. However, most left-wing parliamentarians, including then-deputy Gabriel Boric, rejected it, arguing possible adverse effects on Chilean interests in labor, environmental, and agricultural matters.

Chile expects that trade will expand as a result of its participation in the CPTPP

The Senate approved the entry in October last year with 27 votes in favor and ten against. “Many at that time questioned the government’s commitment to official ratification, the deposit of the instrument, and its entry into force,” said Minister Marcel, alluding to the criticism made for the slowness of ratification. “Shortly after the beginning of the year, we already have the entry into force of this treaty, which is very important. Many of that time’s fears, apprehensions, and mistrust are largely belied by the reality of what is happening,” he added. Now that Chile is a member the Trans-Pacific Partnership Agreement, the country’s trade officials anticipate that the overall value of commerce with the countries that are party to the pact will increase significantly.

After the pandemic, the Mexican aerospace industry experienced numerous challenges in recovering production and strengthening the supply chain.

According to Luis Lizcano, executive president of the Mexican Federation of the Aerospace Industry (FEMIA), in the last 15 years, the aerospace industry in Mexico has maintained an average annual growth of 14%.

While by the end of 2023, Lizcano said that a growth of 13% is expected, and by 2024, the growth is estimated to reach 12%.

” It is expected that we will recover to 2019 levels in a 2023 and 2024 time frame. The pandemic hit was significant, so the recovery will be gradual. We hope that the same growth trend will result in the coming years,” Lizcano pointed out.

The executive explained that Mexico currently participates in almost all aircraft systems, ranging from propulsion components (engines) and aerostructures to aircraft interiors, landing system components, electrical and electronic systems, precision machining, engineering design, surface treatments, maintenance, and repair services.

“The Mexican aerospace industry has a great presence in the most important commercial aircraft in the world; for example, the entire set of doors on the Dreamliner is made in Mexico. Like the signal transmission system and all the wiring, it is manufactured and designed in the country. Likewise, the interiors of Embraer’s E2 regional jets are also made in Mexico,” Lizcano said.

Lizcano went on to express that, although it is difficult to assess Mexico’s participation in the world market, within the context of exports from the aerospace industry, the country maintains an important place and is located in the top 10 exporters in the sector.

For his part, René Espinosa, president of FEMIA, said that Mexico is a relevant and strategic player in the aerospace supply chain for North America and Europe today.

“We cannot talk about the growth and development of the Mexican aerospace industry if we do not carry out projects that stimulate the advancement of national companies, as well as the training of talent based on the development trends of new technologies and cutting-edge materials,” Espinosa said.

He added that it is essential to align the educational opportunities offered with the current and future needs of the industry by strengthening regional and national strategies with a comprehensive vision to meet the sector’s needs.

“One of the factors and a great differential that represents us and gives us a competitive advantage as a country in this sector is our talent. In addition, our technical and engineering capacity make Mexico a fundamental pole for supply strategies with large OEMs and leading companies in this sector,” added the executive.

In this sense, he explained that, for example, the industrial sector in the United States is currently facing a great talent crisis because, in the next five years, 53% of its engineers and technicians are about to retire: “This makes Mexico a destination strategic with industrial capacity and talent in one of the most important regional economic blocks, such as North America.”

Strategic agenda of the Mexican aerospace industry for 2030

Recently, Jorge Gutiérrez de Velasco, president of the Mexican Council for Aerospace Education (COMEA) and former rector of the Aeronautical University in Querétaro (UNAQ), presented the “Aeronautical and Space Strategic Agenda for Higher Education Institutions 2030.”

The vision of the strategic agenda is to generate knowledge and train people to solve the challenges facing the Mexican aerospace industry.

He said the intention is to potentiate the aerospace industry through the close linkage of educational processes and activities of greater added value, such as research and development of leaders who face the challenges the sector demands and will demand.

The president of COMEA specified that education is a critical element in the logic of the triple helix to develop the capacities that the sector requires and that they have already identified.

“This effort has involved 31 educational institutions in Mexico. The logic of the strategic agenda is to map the needs of the aerospace Mexican aerospace industry regarding its technologies and personnel. In addition, we also examine an overview of what the industry itself is identifying that will impact or has impacted”, explained Gutiérrez de Velasco.

In this sense, he went on to raise some of the technological trends that will impact the Mexican industry between the present and 2030, which include:

• A higher percentage of composite materials in aircraft
• Increased participation in additive manufacturing and composite materials with 3D fabrics
• Morphing Aircraft Systems
• Smart materials in structural components
• Digitization and incorporation of advanced technologies to improve MRO efficiency
• New product segments and attention to new customers
• Replacement of the aging fleet and revision of old technologies
• Trends toward the approval of maintenance systems and procedures
• Technological developments 4.0, along with the development of cybersecurity systems
• Evaluation of large volumes of data and decision-making in real-time
• Updating operating procedures for new digital technologies
• Autonomous maintenance-free systems
• New power cells
• Fully electronic flight control innovations
• Analysis of big data volumes for satellites
• Maintenance programs for orbiting satellites
• Development of nanosatellites to transmit information
• Composite materials with resistance to very high temperatures
• Clean and quiet electric drive
• Better electrical energy storage with less impact on the environment.

For FEMIA’s René Espinosa, there has been talk in the Mexican aerospace industry of the future and its global relevance in recent years: “We see it as a response to increasing our country’s regional competitiveness and productivity. For example, additive manufacturing and virtual reality are standard and familiar topics for the aerospace industry and other industrial sectors today.

The importance of human capital in the Mexican aerospace industry

Gutiérrez de Velasco said that, as part of the strategic agenda, a prospective exercise was carried out towards the year 2030 to identify the human capital needs of the Mexican aerospace industry.

“Something that caught our attention is the distribution of personnel that will be required at the end of the decade. The vocation in Mexico will continue to be manufacturing and labor-intensive since 67% will be assembly line workers. In other words, it will continue to be the operational staff that dominates the training area”, explained the manager.

He pointed out that, by 2030, more than 105,000 specialized professionals will be required, of which 19% must have higher education and training.

“This invites us to reflect on what else we have to do so that the number of engineering-level personnel, depending on the processes and products with the highest added value, is higher, from the field of public policy or of the productive organizations,” he indicated.

Furthermore, Gutiérrez de Velasco pointed out that eight programs and eighteen projects seek to close the gap between the human capital needs of the Mexican aerospace industry and the vision for the future. The eight programs include technological and skill strengthening for teachers; the creation and availability of spaces and sustainable infrastructure; the link with the sector and society; research, technological development, and innovation; the relevant and agile academic offer; the management of comprehensive educational quality; digital transformation and appropriate budget allocation.

“It is necessary for the industry that specialized higher education have high-level coordination that deploys the projects. It is said that it should be in a triple helix. We know that combining the efforts, the intention, and the will of all is a challenge per se. Still, I believe that if we do not lose sight of it, we have a great possibility, both within the educational institutions and the Mexican aerospace industry”, indicated Gutiérrez de Velasco.

In this regard, Luis Lizcano said that the aerospace sector is based on knowledge and skills: “So, we have to prepare ourselves. We must prepare our people to develop these skills so that our companies can compete more effectively. We must be prepared to price better and deliver higher quality products.”

The challenges of supply in the Mexican aerospace industry

René Espinosa expresses that, on the world stage, large manufacturers have been forced to undertake tactics of geographical relocation of their suppliers to be more strategically nimble. In this regard, Luis Lizcano explained that the geopolitical situation poses an important opportunity for Mexico as an industrial sector.

“We need to be prepared to take advantage of the opportunities that present themselves. Therefore, we need to do our homework internally; that is, we must be prepared so that when the contracts come and the possibilities of a listing materialize, we can do it successfully,” he explained.

For his part, Arnoldo Castilla, general director of Business Consulting and president of the Supplier Development Commission of the Baja California Aerospace Cluster, said that one of the main challenges for suppliers is the ability of suppliers to deliver on time.

“It is a crucial area. The aerospace industry is very dispersed around the world, and the ability to deliver on time always exists and is the one that worries the industry the most,” he explained.

He said that the second major challenge is the ability of suppliers to meet quality requirements: “It is not a quality requirement as the commercial industry knows it, for example, with ISO 9001 certification. The industry has multiple stringent requirements.”

Finally, he pointed out that the third challenge is the cost on a global scale: “Competitiveness occurs in delivery times, ability to meet quality requirements and ability to work within market targets.”

The specialist specified that suppliers need to demonstrate that they are consistent in what they do and do it well all the time: “With the ability to innovate and improve since it is a changing high-tech industry, which requires its suppliers the ability to grow and innovate.

In turn, Frida Fuentes, sales manager of APCA Ingeniería, pointed out five aspects that identify a good supplier:

1. Meets industry standards. Buyers must know that suppliers do not pose additional risks to their organizations.
2. Keeps information up to date. Companies must ensure that the data is accurate and regularly updated.
3. Make continuous efforts to improve. Demonstrate to buyers that an organization is committed to continually improving what has been learned from audit reports and achieving better results year after year.
4. Demonstrate innovation. Buyers seek innovative, competitive, and standards-compliant suppliers.
5. Has an initiative-taking attitude. Engage with your customers, be it the marketing team or the person responsible for sales, to promote company performance.

The kinds of labor contracts in Brazil and other countries change over time. This article provides a general overview of the types of employment contracts that exist in South America’s largest country in 2023.

Labor contracts in Brazil: what are they?

An employment contract is an agreement, as a legal basis, established between an employer and their future employee.

In addition to signifying a bond between the two parties, labor contracts in Brazil also serve as a document that usually contains information regarding the employee and the tasks to be performed.

That is, when the employer delivers an employment contract to the employee, it contains information regarding the employee and information proving its legal validity. In addition, labor contracts in Brazil also spell out rules related to the company. Accordingly, it defines the position the employee will fill and outlines the salary and benefits they will receive.

What are the main types of labor contracts in Brazil?

Labor contracts in Brazil have several variants. These include internship contracts, freelancer contracts, legal work contracts, full-time work contracts, youth work contracts, and apprenticeships.

Let’s examine the various agreements between employers and employees in Brazil.

Indefinite employment

This employment contract is most commonly seen in the Brazilian labor market. It is the most traditional for most active companies at present.

As the name implies, this contract model has no deadline for terminating the employee’s activities. Instead, the contract ends at the employer’s discretion.

Prior notice is required if the parties decide to terminate an employment contract. Notification must be given to the company by the employee in the event of a breach of contract, and, in turn, the employee must inform the employer of their intent to sever the contractual relationship.

As a result of Brazil’s most recent labor reform, both the employer and the worker can enter into one agreement to terminate the contract permanently.

Fixed-term employment contract

In contrast to the option highlighted above, these types of labor contracts in Brazil are under the obligation of the employer to establish the start date and end date for the contract term; fixed-term employment contracts in Brazil do not exceed two years.

Suppose this type of contract is amended and extended beyond the maximum of 2 years. In that case, the agreement must be revised by the employer and his employee and converted into an indefinite employment contract.

Occasional work contracts

This type of labor contract in Brazil originates from the contract for temporary employment or, as mentioned above, a fixed-term contract.

However, unlike the fixed-term agreement,  under the occasional employment contract, a temporary worker performs the defined work tasks for short or even sporadic periods and usually is not considered a company employee.

Home office work contract

Despite being considered a new type of work on the market, these labor contracts in Brazil are also one of the agreements regulated by Brazilian law.

In its legal context, home office work is any task the worker performs during working hours outside the company’s physical location at a place such as a home office.

Despite this being a Brazilian labor contract that guarantees that the employee can carry out assigned tasks during a workday at home, they can still go to the company’s physical location and work in the organization’s internal environment on a sporadic basis.

To ensure that this contract is valid and in compliance with Brazilian labor legislation, the labor agreement must contain all pertinent information related to employee duties and information on the equipment the company has provided to the employee for use in their home office.

Intermittent work contracts

This agreement is another of the many types of labor contracts that exist in Brazil. It allows for sporadic employment for an agreed-upon rate of remuneration. Also, it consists of an agreement between the parties as to the period of provision of mutually agreed upon services.

The rules for this type of contract provide that the employee will be compensated for the work performed can be at least the amount paid to another employee to exercise the same function within the company, whether that employee is working under an intermittent labor contract or not.

Another point that helps to differentiate this type of contract from the others is that the employee has the right to vacation, pension, and the yearly bonus payment proportionate to the time worked.

Part-time labor contracts in Brazil

A partial employment contract in Brazil has a shorter time frame and is limited to 30 hours a week without the possibility of working overtime.

This type of contract is usually established for interns, who need to dedicate part of their time to their studies.

Outsourced labor contract

This type of contract is usually established and worked between companies, where one activity of the contracting company is transferred to another.

The contracted company is responsible for paying legally mandated benefits, wages, training, and other costs related to employees.

Autonomous labor contracts in Brazil

This type of contract is very similar to the standard employment contract many Brazilians are accustomed to.

In this arrangement, the employment contract is autonomous and functions as a provider of services in which the worker and the company do not sign an employment agreement.

In this way, the service provider is not subordinated to the contracting party, and all the work is previously agreed upon and established by the parties that are party to the relationship.

It is worth noting that this type of work is considered self-employed. Payment for services rendered is made through the issuance of self-employed payment receipts (RPA). Social Security contributions must be recorded ( INSS ), and income tax must be paid to the Federal Government.

Contracts for interns

Hiring interns is quite common in the Brazilian labor market. This is even more so the case for youth who are enrolled in a college or university. Under this type of agreement, the internship serves as extra academic hours that enable a student to acquire real-life work experience.

This type of contract is not classified as a typical labor agreement because it is considered a learning opportunity for the intern.

Because of this, the intern does not have the right to receive severance pay, salary bonus,  or vacation pay.

However, The intern has the right to be covered under personal accident insurance and, where applicable, a monthly stipend to cover living expenses.

Labor contracts in Brazil for trainees

This type of contract applies to recent graduates aged 21 to 30 years old.

The hiring time for this modality of employment varies from 4 to 6 years of work. The employment relationship with the contracting company is configured as established by Brazilian labor legislation.

It is worth mentioning that it is the responsibility of the contracting company to determine the period of the contract. This means that the company must indicate whether it will be for a fixed or indefinite period.

Employment contracts for young apprentices

We can see this type of contract in companies that hire people between 14 years old and 24 years old. These individuals are usually enrolled in an apprenticeship program a training organization runs.

In this case, the young apprentice may already have completed their education or still be enrolled. It is essential to point out that if the person selected has any disability, the maximum age does not apply.

As with contracts for interns, a work contract for a young apprentice can be up to 6 hours a day, and the employment contract can be up to two years.

Conclusion

The country’s labor market is vast, and Brazil has many other types of labor contracts.

While they differ on specific issues, they are very similar on others. Because of this, there is a need to highlight functions, rights, and duties, as well as the matters linked to wages and benefits.