Apple gets tax incentives in Brazil to begin iPad production

Apple is making a move to break into South America--and Brazil is ready (and willing) to help.

According to a report from Brazilian newspaper Folha (via MacRumors), Foxconn will begin producing iPads in its Brazilian factory after being officially granted a batch of tax incentives from the Brazilian government.

As Tim Cook noted in his quarterly earnings call Tuesday, Brazil is one of the top four countries Apple is looking to break in to and is seen as the gateway to the rest of South America. With over 200 million people in a relatively stable economy that is growing its buying power, it is easy to see why Apple would be interested.

Brazil's Interministerial Ordinance No. 34 provides benefits for a reduction in, or elimination of, taxes relating to production of touch-screen devices that do not have a physical keyboard and weigh less than 750 grams.

In other words, I.O. No. 34 is the "build an iPad here" incentive.

Foxconn's factory in Brazil can now start production of the new iPad, which many believe will debut in early Spring. The Brazilian government had previously been tough with Foxconn's and Apple's tax incentive requirements, a sticking point that has clearly been negotiated through.

The ordinance also provides a provision for producing accessories for tablet devices, which could help draw other manufacturing operations to the country as Brazil looks to entice high-tech industry production to South America.