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On the basis of the declarations and data informed electronically to the Electronic Central BankSystem – SISBACEN, by companies or their representatives, a Consolidated Foreign DirectInvestment Registration Statement will be generated. This statement is the appropriate document toevidence the investment made by the foreign investor before third parties.The investment registration procedure shall be formalized within 30 days from the investment’s entryinto Brazil. In relation to foreign investments through tangible goods, the registration period is 30 daysfrom the customs clearance date of the goods, on pain of submitting the recipient company of theinvestment to the application of a fine of up to R$ 250 thousand, in conformity in accordance with theprovisions of the Resolução nº. 4.104, as of June 28, 2012, issued by Central Bank.The aforesaid registration will be made in the foreign currency actually brought into the Country or inthe amount declared in the import document of the goods.Profits distributed by companies established in Brazil and allocated to residents and individuals orcorporate entities domiciled abroad, but that are reinvested in the same companies from which theyoriginated or in another sector of the Brazilian economy, are also subject to registration as foreigncapital, with BACEN.Foreign investors with ownership interests in Brazilian companies may transfer these interests to thirdparties abroad. The foreign purchaser, notwithstanding the price paid for the acquisition, must alter theConsolidated Foreign Direct Investment in Brazil Registration Statement, obtaining a new RDE-IEDregistration number, which will identify its investment in substitution of the assigning investor, in orderto permit future remittances, profit reinvestment registrations and any repatriation of the investment.Lastly, it is important to mention that individuals or companies domiciled or based abroad, that haveownership interests and other assets in Brazil are obliged to register in the CPF (Federal Register ofIndividual Taxpayers) and CNPJ (Federal Register of Corporate Taxpayers), respectively.1.2. Foreign Investment in Local CurrencyIn 2007, BACEN published new foreign exchange rules permitting the registration in local currency ofownership interests held by a foreign partner, which, up to that time, could not be made at BACEN,due to there being no evidence of the regular entry of the resources into the Country (via thecontracting of foreign exchange, as determined in the prevailing foreign exchange regulations). Thissituation was known as “tainted capital” (capital contaminado). The consequence of this situation,among others, was that of not permitting the remittance of profits and dividends abroad on theunregistered portion of the capital/investment.4