By Brazil Stock Guide – Engie Brasil Energia SA (EGIE3.SA) Chief Executive Officer Eduardo Sattamini warned on Tuesday (Nov. 4) that Brazil’s plan to introduce a 10% tax on dividends paid to individuals could discourage long-term foreign investment, particularly from European companies.
Speaking at the France-Brazil Forum in São Paulo, Sattamini said that European tax systems do not allow compensation for foreign dividend taxes, making Brazilian investments comparatively less attractive.
The comments were first reported by Valor Econômico. “Dividend taxation cannot be offset by European companies because of their home-country rules,” Sattamini told reporters. “This measure would make Brazil’s effective investment rate very high, leading companies to favor markets where capital is not so heavily taxed.”
He added that for investors focused on long-term returns, “the solution could be to eliminate the tax or at least defer payment to avoid harming foreign capital inflows.”
Financial Performance and Outlook
In the third quarter, Engie Brasil Energia reported solid results supported by higher hydropower generation and stable energy prices. Net revenue rose 6.4% year-on-year to R$3.97 billion, while net income reached R$1.1 billion, slightly above market expectations. EBITDA margin stood at 48%, reflecting cost discipline and operational efficiency.
The company continues to prioritize renewable expansion. In 2025, Engie plans to invest R$2.5 billion in solar and wind projects to increase its clean energy portfolio. “We remain committed to long-term investment in Brazil,” Sattamini said, adding that “policy stability is crucial to ensure continued growth.”
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