Investment Law

BRAZIL
Members
A.A. I. Kalvika Ariviranti-BF
(007200800004)
Bella Firna-IB
Dewi Pelangi-BF (011200800013)
(007200800051)

Fadilah Rahman-IB
(011200800027)

Gracia Puspita Suciono-BF

(007200800014)

Marlon Matindas –BF

(0072008000)
INTRODUCTION
 INTRODUCTION
Most attractive characteristics are:
- A large domestic market
- The extensive agricultural land, high reserves of rivers
and fresh water for an intensive use of hydroelectricity
- Most needed mineral and raw materials in its soil
- Large number of industries organize in an ever-
increasing industrial park
- World’s largest capacity to produce ethanol from sugar
cane
 INTRODUCTION
A. GEOGRAPHY

- Located in eastern South America

- Bordering the Atlantic Ocean
- Sharing common boundaries with Argentina,
Bolivia, Colombia, Paraguay, Peru, Suriname,
Uruguay, Venezuela, and the Guianas.
 INTRODUCTION
B. POPULATION
- The only Latin country colonized by the
Portuguese.
- 80% Urban and 20% rural.
- a result of “melting pot”
 INTRODUCTION
C. POLITICAL SYSTEM

- Brazil is a Federal Republic

- Headed by a president and two legislative
chambers (Senate and House of
Representative)
- Democracy : Executive, Legislative, and
Judiciary
 INTODUCTION
- Brazil is a member of most multilateral worldwide organizations:

􀂾 UN (United Nations)
􀂾 OAS (Organization of American States)
􀂾 GATT (General Agreement on Tariffs and Trade)
􀂾 World Bank
􀂾 BID (Inter-American Development Bank)
􀂾 IMF (International Monetary Fund)
􀂾 ILO (International Labour Organisation)
 
 INTRODUCTION
D. ECONOMY

- Well balance economy self-sufficient in

Energy.
 INTRODUCTION
E. CURRENCY

- The currency unit is the “Real” (R$),

introduced on July 1st, 1994
 INTRODUCTION
F. OPPORTUNITIES FOR FOREIGN INVESTMENT

- No longer barrier
DEFINITION
 DEFINITION
- The Law 4131/62 defines foreign capital as
“any goods, machinery, equipment, cash and
financial resources that enter Brazil for the
production of goods or services, or for
investment in economic activities, provided
that in either case they belong to individuals
or legal entities resident, domiciled or
headquartered abroad”.
 DEFINITION
- Participant of foreign capital is prohibited :
- Domestic Flight routes
- Nuclear Energy
- Health Services
- Post office and Telegraph Services
- Businesses abutting on international borders
- Aerospace industry
HISTORY OF FOREIGN INVESTMENT IN BRAZIL
HISTORY OF FOREIGN INVESTMENT IN BRAZIL

1991 – foreign investors has been allowed to

trade on Brazilian stock market
1994 – Fernando Enrique Cardoso instituted
new currency reined in the hyperinflation.
1995- amended its constitution to eliminate the
distinction between foreign and national
capital
LAW OF FOREIGN INVESTMENT IN
BRAZIL
Law 4.131/62

amended by Decree
55.762/65

and Law 8.383/91

 t me n t
r e i gn Inves
o f Fo
La w
All of the transactions must be registered
Foreign Capital Investment
at must
the Central Bank of Brazil if they areat to
be REGISTERED the Central Bank
serve 30basis
within as daysforfrom its INTRODUCTION.
subsequent

remittances of foreign currency:

h REINVESTMENT in profits
Foreign capital entering the country of the form should
of be
registered
direct investments or indirect 30 days from the date on
investments
within

h which the Respective

Reinvestment Bookkeeping
of profits as foreign capital; Entry is made
h
by the Brazilian
Remittances made to other countries for the purpose of

repatriation.
company.

h Changes in the value of companies’ capital stock.

Foreign Capital Requirements and Restrictions
h Foreign individuals and companies are not allowed
No restrictions to control
are imposed for non-resident
investments in certain sectors,foreigners
includingontheownership of buildings.
news media,
atomic energy projects or airlines, for example.

h Non-resident foreigners and companies incorporated abroad

For companies established
are not allowed and domiciled
to acquire directly rural real estate located in
abroad there is the possibility of opening a non-
border areas, as some other restrictions might apply.
resident account in Real .

h Brazilian resident individuals are not allowed to maintain

Foreign individuals and companies are not
Brazilian bank accounts denominated in a foreign currency in
allowed to control investments in certain
Brazilian banks. Theysectors,
may maintain these
including the accounts in banks
news media, atomic
abroad and the funds must energy
be stated in the
projects individual's
or airlines
personal income tax return.
 Temporary
Foreign Exchange Control
Investments

No specific restriction regarding

Theret eare
m p o2r aslightly
r y i n v e s t different
ments.
rates:
The most common way to get
b a c k m oCommercial
ney invested in Brazil is
through capital repatriation.
 Turismo
ARBITRATION
Brazil was one of the last Latin American
countries to accept international
commercial arbitration.

The Brazilian Arbitration Law, in article

34, sole paragraph, provides that " a
foreign arbitration award is any award
that has been rendered outside Brazilian
territory."

Article 35 states that " in order to be

recognized or enforced in Brazil, a foreign
arbitration award is subject solely to
homologation by the Supreme Federal
Court."
 ARBITRATION
• Brazil was one of the last Latin American countries to
accept international commercial arbitration.
• The Brazilian Arbitration Law, in article 34, sole
paragraph, provides that " a foreign arbitration award
is any award that has been rendered outside Brazilian
territory."
• Article 35 states that " in order to be recognized or
enforced in Brazil, a foreign arbitration award is
subject solely to homologation by the Supreme Federal
Court." 1
 ARBITRATION
There are many reasons why Brazilian shall be optimist with respect to
the arbitration prospects in the country. :
• First of all, since the enactment of Law n. 9.307/96 many books and
articles have been dedicated to the subject. Two Legal Reviews are
published on a quarterly basis and one on a year basis, which includes
aspects involving mediation.
• Some Law School has introduced arbitration in the regular legal
discipline and have successfully launched it as a post graduation course.
• It is uncountable the number of national and international conferences
held every year in Brazil since 1996. The legal community has enhanced
quite fast an arbitration background and has also take advantages from
international development through the exchange of knowledge.
ARBITRATION
 ARBITRATION
•  Whatshould potential foreign
investors looking at investment
opportunities in Brazil do to
protect their interests?
COMPARISON