Law 13,097 of 2015, which resulted from the conversion into law of Provisional Measure 656 of 2014, amended Section 23 of the National Healthcare System Law of 1990 to allow foreign investment in the Brazilian healthcare sector.
Prior to this change, the participation of foreign investors in the Brazilian healthcare sector was limited by the Federal Constitution, which establishes that foreign capital or companies are not allowed to participate in the sector, directly or indirectly, except for specific cases provided for by the law.
The previous wording of Section 23 of the National Healthcare System Law allowed the participation of foreign capital or companies only in the event of: i) technical cooperation, financing and donations made by international organizations linked to the United Nations Organization; and ii) non-profit health assistance services maintained by companies to assist their employees, with no cost to the Brazilian public healthcare system (Sistema Único de Saúde – “SUS”). In addition, another statute (Law 9,656 of 1998) also allowed foreign entities to invest in companies managing private health insurance plans in Brazil.
The law now authorizes the full participation of foreign capital (including the holding of a controlling stake), either directly or indirectly, in Brazilian companies that operate general or specialized hospitals, policlinics, and general or specialized clinics.
It also authorizes the full participation of foreign capital in activities related to healthcare support, including laboratories of human genetics, production and supply of drugs and health products, and laboratories for clinical, pathology and imaging diagnostics.
The reason underlying the change is to increase competition and, ultimately, to improve the quality and quantity of health services rendered to the Brazilian population.