This rule also permits a group to centralize its foreign finance function in a foreign subsidiary, which can receive interest on loans made to relatedforeign affiliates without U.S. taxation.
In addition, the rule permits the centralization and management of intellectual property in a foreign company and the receipt of royalties from relatedforeign subsidiaries without current U.S. taxation.
Most of the risk in Brazil stems from political interference in the economy through a myriad of surprise macro measures such as taxation on investment, to monetary policy related to the foreign exchange rate.