1E9Ct5D

1. FOREIGN INVESTMENT CAPITAL AND CENTRAL BANK OF BRAZIL1.1. Foreign Direct InvestmentAssets, machinery and equipment brought into the Country without an initial outlay of foreign currency,to be employed in the production of goods or services, and financial or monetary resources admittedinto the Country for investment in business activities, are considered foreign capital, provided that inboth cases they belong to individuals or corporate entities residing, domiciled or based abroad, andmust be registered electronically with Central Bank of Brazil (BACEN), through an investor-recipientrelated code called RDE-IED, which was initially instituted through the repealed BACEN Circular 2,997of 11 August 2000, and currently ruled by Resolução 3.844, as of March 24, 2010 ("Resolução 3.844")and Circular 3.689, as of June 12, 2013 ("Circular 3.689"), both issued by the Central Bank.Registration at BACEN is a condition for the remittance abroad of profits and dividends, and intereston owners‟ equity, obtained by means of investments made in the Country and guarantees theinvestor the possibility of repatriating the resources invested.The investor can also invest in Brazilian companies through the conveyance of tangible goods(machinery and equipment), provided that such goods are imported, without the obligation of apayment to a nonresident. In this case, the registration must be made, firstly, in the ROF – Registro deOperação Financeira (Financial Operation Registration) module of the RDE, and, subsequently, in theIED module of the RDE as foreign direct investment. This Registration in the RDE-ROF module mustbe linked to the cleared Import Declaration (Declaração de Importação – DI).In addition to investments in corporeal property to be employed in the production of goods andservices, BACEN also accepts such intangible goods as trademarks, patents and know-how, as thesubject of investment as foreign capital. The registration of intangible goods in BACEN should also bedone through the RDE-ROF module, linked to an invoice or equivalent document that characterizesthe importation of the intangible goods, provided that approved by the agency responsible for theregistration and control of industrial property rights in the Country, namely the INPI (Brazilian Patentand Trademark Office). Finally, the registration is conducted in the RDE-IED module.According to the Circular 3.689 rules, the technology transfer subject to INPI registration does notcharacterize an intangible good for the purposes of the financial operation registration designed for thepayment of the capital of Brazilian companies.The foreign investor may also make investments through the conversion of credits that are capable ofgenerating transfers abroad, such as foreign loan principal and interest duly registered in the RDE-ROF Module, profits or dividends, interest on owners‟ equity and other amounts remittable abroad.3