MCTI Ordinance 8,780: how FIP investments are reported in the ICT Law annual report (RDA)

This note covers the incentive under Law No. 8,248/1991, which the MCTI administers. The regime under Law No. 8,387/1991, administered by the Superintendence of the Manaus Free Trade Zone (Suframa), has its own rules and is not covered here.

At a glance: who does what

Where the money comes from

The ICT Law grants a financial credit to companies that manufacture information and communication technology (ICT) goods and invest in research, development and innovation (RD&I). Part of that mandatory investment may be made in CVM-authorized funds that provide capital to technology-based companies (Law No. 8,248/1991, article 11, paragraph 18, II).

MCTI Ordinance No. 8,780 of December 16, 2024, published in the Federal Official Gazette on December 17, 2024, regulates this option. It replaced MCTIC Ordinance No. 5,894/2018. In practice, money the beneficiary company must invest in RD&I becomes capital for startups through an FIP.

The investment counts only once the money is in the fund

Paying in the quotas is a necessary condition for meeting the obligation and is evidenced by a deposit receipt or equivalent document. A subscription alone, that is, the commitment to contribute, is not enough (article 17).

When the investment starts to count depends on whether the fund is accredited with the MCTI, which, as a general rule, is optional (articles 10 and 18):

• Accredited fund: the obligation is met when the quotas are paid in (article 18).
• Non-accredited fund: the obligation is met only when the MCTI accepts the reporting of the investment in the RDA (article 18, paragraph 2). The beneficiary company becomes primarily responsible for that reporting (article 26).

The manager applies for accreditation using a form available on the MCTI’s investment fund page, filed electronically with the documents the ordinance requires (article 10). The ministry lists on its website the funds that use ICT Law incentives (article 27). Accreditation does not replace reporting in the RDA, and it does not prevent a disallowance if the rules are breached.

Funds that were already operating before the ordinance followed a different rule: accreditation was mandatory, within a 90-day period that has already expired (article 28). Those funds did not have to amend their regulations and remain subject to MCTIC Ordinance No. 5,894/2018 until their current investment rounds end. The new ordinance’s limits on quotaholders and portfolio apply only to new pay-ins and new investments. Investments in new companies follow the new eligibility rules, and companies already in the portfolio follow the old rules until the end of that round (article 28, paragraphs 1, 3, 5 and 6).

What the RDA must show

The RDA is the annual report in which the beneficiary company shows the MCTI that it met its ICT Law obligations in the previous year: its RD&I investments, compliance with the basic production processes (processos produtivos básicos, the product-specific manufacturing requirements) and the results achieved. The ordinary filing deadline is July 31 of each year, and it may be extended by the minister (Decree No. 10,356/2020, article 30, to which MCTI Ordinance No. 8,780/2024, article 2, XXI, refers).

The ordinance requires the beneficiary to include in the RDA the amounts paid into the FIP (article 19). The information must be consistent with what the fund filed with the CVM and come with the pay-in receipts. A mismatch between the amounts may lead to a disallowance, subject to the company’s right to a full defense (article 19, paragraph 2).

What the manager takes on

Before each investment, the manager receives from the startup’s legal representative an eligibility statement following the model in Annex I. The manager must verify compliance and is jointly and severally liable if it cannot show that it carried out this check (article 6). The manager must also ensure that the money is invested in technology-based companies and that the portfolio meets the ordinance’s limits. If there is a disallowance, it is jointly and severally liable for repaying the tax credit in proportion to the quotas received or for restoring the funds (article 23). An administrator that becomes aware of a change leading to non-compliance must report it immediately to the beneficiary and to the CVM. If it does not, it is jointly and severally liable in the event of a disallowance related to the unreported change (article 23, paragraph 1).

For an accredited fund, the manager files an annual report on the portfolio companies with the MCTI (article 20), and the fund submits the consolidated report with an independent auditor’s opinion (article 21). If the opinion does not expressly address compliance with the ordinance, the fund’s accreditation is suspended until the issue is resolved (article 21, paragraph 2). Each year, the MCTI publishes a list of funds, managers and administrators that have breached the ordinance, after at least 90 days’ prior notice. Names remain on the list for two years, and during that period new pay-ins into the fund do not count toward the RD&I obligation (article 23, paragraphs 4, 5, 7 and 8).

The fund must also follow its own rules, with specific exceptions:

• invest only in technology-based companies, either through the fund as a whole or through a dedicated class; have an investment period of up to six years, with cases in which later investments are allowed, such as contracts already signed and capital increases of portfolio companies; and not trade quotas on the secondary market until 24 months after each pay-in, a rule that does not apply to quotaholders that do not use the incentive (article 9, II, III, V and VI, and paragraph 3);
• invest no more than 35% of subscribed capital in a single company; keep at least two-thirds of the portfolio companies at annual revenue of up to R$ 16 million over the last two years, measured at the first investment; and, above eight portfolio companies, hold at least one DeepTech or 10% of the portfolio companies in that category, whichever is greater. These limits do not apply in the first two years of operation or during the divestment and wind-down period. Funds whose regulations expressly target the activities described in the provision, such as machine learning and generative AI, semiconductors, advanced devices, robotics, photonics and quantum technologies, are exempt (article 16, paragraphs 1 to 5);
• not hold a majority stake in a portfolio company. There is a temporary exception for a new investment needed to keep the company operating, with a deadline to dilute the excess, and an exemption for portfolio companies whose main activity is in the artificial intelligence, semiconductor and other technologies described in the provision (article 13);
• respect the fee cap: management and administration fees combined are capped at the greater of 3.5% a year of paid-in capital or R$ 50,000 a month, and the performance fee is capped at 35% of the profit of the fund, the class or the quotaholder. In the first 24 months, the parties may agree on higher fees solely to keep the fund’s operations viable (article 11, paragraphs 2 and 4).

Who can receive the investment: technology-based companies

The startup must prove that it qualifies before the investment, including that it is not treated as a foreign asset under CVM rules (article 4). Under the general rule, the requirements are cumulative: carry out RD&I activities; have the development of ICT products or services as its main activity; have been registered with the national corporate taxpayer registry (CNPJ) for no more than 10 years, or be a small high-technology (hard science) company; and have a main economic activity code (CNAE) in a division listed in the MCTI manual (article 4, paragraph 1). If a regulatory requirement imposes a different main CNAE, the requirement may be met through a secondary CNAE (article 4, paragraph 4). The list of CNAEs is to be included in the manual and formalized by an ordinance of SETAD, the MCTI secretariat in charge of the subject (article 3, sole paragraph).

It must also meet at least two additional criteria from the list in article 4, paragraph 2. They include annual production of intellectual property for two consecutive years, or its commercialization; scalability potential, attested in an independent technical report signed by a registered economist; operating in high-growth sectors, assessed case by case by the MCTI; and participation in an ICT accelerator or incubator that has been operating for at least five years. Each criterion has its own proof requirements, and a generic statement is not enough.

A company that proves its main activity is artificial intelligence-based systems, semiconductors and microelectronics, or advanced technologies, robotics, photonics and quantum technology is exempt from the requirements in article 4, paragraphs 1 and 2 (article 5). Merely using artificial intelligence in the business is not enough, and the exemption does not set aside the ordinance’s other rules, such as the size limits and the dividend restriction.

As a general rule, in the fiscal year before the fund’s first investment, the company may not have total assets above R$ 80 million or annual gross revenue above R$ 100 million (article 11, II). If it is controlled by a group, the group may not exceed R$ 320 million in total assets or R$ 400 million in gross revenue (article 11, IV). The group limit does not apply when the controlling party is another FIP or a similar vehicle, in Brazil or abroad, whose financial statements are not consolidated into those of its quotaholders (article 11, V). The limits on the portfolio company itself do not apply if it has already received ICT Law incentive investment from an FIP that has since closed (article 11, VIII). The previous rule capped revenue at R$ 16 million.

After the investment, the startup may not distribute dividends until the end of the year in which it received the investment (article 7). Paragraph 1 of the same article, however, allows distributions only from the end of the year following the investment, and up to the accumulated operating profit. How the two provisions fit together is not clear. As a precaution, the year after the investment should also be treated as a period with no distributions. Distributing early or above the limit exposes the company to repayment of the corresponding tax credit (article 7, paragraph 2).

Practical steps

The steps below are practical recommendations. Not all of them are express requirements of the ordinance.

Beneficiary company

• Confirm whether the FIP is accredited with the MCTI before subscribing for quotas. This determines when the investment starts to count. The list of accredited funds is on the ministry’s website.
• Agree with the manager and the administrator on deadlines for delivering the pay-in receipts and the information filed with the CVM, and reconcile this data before closing the RDA.
• Monitor the 35% limit on the fund’s subscribed quotas, taking into account the tolerance during fundraising and the sector exemptions (article 15).
• Do not hold, directly or indirectly, any stake in the portfolio companies in which the fund invested its incentive contributions (article 14). A quotaholder may acquire a portfolio company only upon the fund’s full exit from that investment, without holding both positions (article 9, paragraph 6).
• Notify the MCTI of a breach by the fund of which it has proven knowledge. The ordinance sets a 30-day deadline counted from the date the breach occurs, and notice given on those terms serves to avoid joint and several liability for repayment (article 23, paragraph 12).

Manager

• Keep on file, for each portfolio company, the Annex I statement, the eligibility documents and the basis for any exception or exemption relied on.
• Include in the fund regulations an express reference to the use of incentive contributions under Law No. 8,248/1991 and to the ordinance (article 16).
• Agree with the independent auditor that the opinion will expressly address compliance with the ordinance (article 21, paragraph 1).
• Consider accrediting the fund. For the beneficiary, accreditation means the investment counts as soon as the quotas are paid in, which makes the fund more attractive when raising capital.

Startup

• Gather before the round the RD&I documents, the CNAE and proof of at least two additional criteria, or of the main activity that qualifies for the article 5 exemption.
• Reflect the article 7 dividend restriction in the quotaholders’ or shareholders’ agreement and, as a precaution, also avoid distributions in the year after the investment.
• Check the size of the company itself and that of its corporate group.

Frequently asked questions

What is MCTI Ordinance No. 8,780/2024?

It is the MCTI rule governing the use of ICT Law incentives in equity investment funds (FIPs) that invest in technology-based companies. It has been in force since December 17, 2024, and replaced MCTIC Ordinance No. 5,894/2018.

Does investing in an FIP meet the ICT Law RD&I obligation?

Yes, for the portion the law allows to be applied this way, provided the fund and the portfolio companies follow the ordinance. Paying in the quotas is required, and a subscription is not enough. For an accredited fund, the obligation is met when the quotas are paid in. For a non-accredited fund, it also depends on the MCTI accepting the investment as reported in the RDA.

Does the FIP need to be accredited with the MCTI?

As a general rule, no. For an accredited fund, the investment counts when the quotas are paid in. For a non-accredited fund, it counts only after the MCTI accepts the investment as reported in the RDA, and primary responsibility lies with the beneficiary company. Funds already operating before the ordinance had to apply for accreditation within 90 days. In any case, accreditation does not prevent a disallowance if the rules are breached.

What happens if the RDA does not match the fund’s information?

A mismatch between the amounts in the RDA and the information filed with the CVM may lead to a disallowance of the investment, subject to the company’s right to a full defense. The consequences depend on the case and may include repayment of the credit or restoration of the funds. The manager and the administrator are jointly and severally liable only in the cases set out in the ordinance (article 23).

Which startups can receive ICT Law incentive investments through an FIP?

Under the general rule, a technology-based company that carries out RD&I, has the development of ICT products or services as its main activity, has been registered for no more than 10 years (or is a small high-technology company), has an eligible CNAE and meets at least two additional criteria. A technology-based company that proves its main activity is one of those listed in article 5, such as artificial intelligence-based systems or semiconductors, is exempt from the requirements in article 4, paragraphs 1 and 2. General size limits also apply, of R$ 80 million in total assets and R$ 100 million in gross revenue, with exceptions.

Can the portfolio startup distribute dividends?

Not until the end of the year in which it received the investment. The ordinance also provides that distributions may take place only from the end of the following year, up to the accumulated operating profit. As a precaution, the recommendation is not to distribute dividends during that interval.

Open questions

The ordinance refers to supplementary acts: the Manual for the Creation, Operation, Reporting and Liquidation of FIPs, which is to include the RDA forms and the list of eligible CNAEs (articles 3 and 19, paragraph 1), and the SETAD ordinance that formalizes that list. Before each transaction, it is advisable to check whether these acts have been issued and which MCTI guidance applies. How to read the article 7 dividend rule as a whole still depends on clarification from the MCTI.