FOREIGN INVERSIONS Decree 1853/93 Approve the orderly text of Act No. 21.382.

Bs. As., 2/9/93

I look at the Nros Laws. 21.382 (t. 1980), 22,426, 23.697, 23,760 and 23,928 and Decree No. 1225 of 14 November 1989; and

CONSIDERING:

That any investment process for productive activities requires a legal regime that provides certainty, permanence, transparency and security;

That Act No. 23,697 on Economic Emergency repeals, through its Article 15, the rules of Law No. 21.382 (t. or 1980) and its supplements requiring prior approval of the NATIONAL EXECUTIVE PODER or the Enforcement Authority for the Investment of Foreign Capitals in the Country;

That also the provision mentioned in the preceding provision guarantees the principle of equal treatment for national and foreign capital invested in the country;

That Article 16 of the Economic Emergency Act No. 23,697 empowers the NATIONAL EXECUTIVE POWER to issue the necessary regulatory rules in order to facilitate the remission of foreign investment profits;

That Article 68 of Act No. 23,760 repeals Article 16 of Act No. 21.382 (t. or 1980) on the special tax on additional benefits from foreign capital investments, beginning on 1 January 1990;

That in the process of modernization and structural change of the national economy, the criteria and procedures governing foreign investment should be adapted and simplified;

That the Argentine Republic offers an agile and unfettered road to investments from other countries, and it is therefore necessary to complement the aforementioned derogation with the dictation of a clarification rule that allows the foreign investor to repatriate his capital and its profits at any time;

Among the activities that have been affected by the above-mentioned provisions are those that refer to the transfer, transfer or licence of technologies or brands, in which both national and foreign capital companies take part;

That is why it should be considered as a result of Article 15 of Law No. 23,697 on Economic Emergency, Article 2 of Law No. 22,426 on Technology Transfer, which constitutes a barrier to the legitimate and equal exercise of the rights of free recruitment;

That it is necessary to adapt the provisions of the Foreign Investments Act (t. o. 1980) with the so-called Convertibility Act No. 23.928;

That Article 1 of Law No. 20.004 empowers the NATIONAL EXECUTIVE POWER to order the laws without introducing any modifications in its texts, except those which are grammatically indispensable for the new ordination;

That the present is dictated in the use of the powers conferred by Articles 16 of Law No. 23.697 and 1 of Law No. 20.004, and those arising from Article 86 (1) and (2) of the National Constitution.

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION

RIGHT:

Article 1 Artículo Approve the orderly text of the Foreign Investment Act No. 21.382 (t. or 1993), as amended by Acts No. 23.697 and 23.760, which as Annex I is an integral part of this decree.

Art. 2o o Foreign investors may make investments in the country without the need for prior approval, on the same terms as domestic investors in the country.

Art. 3o o For the purposes of Article 2(2) of Law No. 21.382 (t. 1993), the concept of a foreign investor includes Argentine natural or legal persons with a domicile outside the national territory.

Art. 4o — For the purposes of the Nros Acts. 21.382 (t. 1993) and 23,697, concentrate on activities of an economic or productive nature on all industrial, mining, agricultural, commercial, financial, service or other activities related to the production or exchange of goods or services.

Art. 5o o The right of foreign investors to repatriate their investment and send liquid and realized profits abroad may be exercised at any time.

Art. 6o o With the exception of the legal reservation, the corresponding share of foreign investors in a local company on reservations that it constitutes a statutory or voluntarily, or generated by revalues or accounting updates of any kind, shall not be considered as reinvestment of foreign capital.

Art. 7o o Pursuant to Article 15 of Economic Emergency Act No. 23,697, the provisions of Article 2 of Law No. 22,426 on the Transfer of Technology are invalid.

Art. 8o o For the purposes of Article 3 of Law No. 22,426 on Technology Transfer, they must register with the National TECHNOLOGY INSTITUTE INDUSTRIAL for information, both those events held between independent companies and those held between a local foreign capital company and the company that directly or indirectly controls, or another subsidiary of the latter.

Art. 9o o La SECRETARIAT OF TRADE AND INVERSIONS OF THE MINISTERY OF ECONOMY AND PUBLIC SERVICES, will be the Authority of Implementation of this regime.

Art. 10. The functions of the Implementation Authority shall be:

(a) Develop statistical information on foreign investment;

(b) Dictate general resolutions of an interpretative nature and perform the other acts necessary for the implementation of Act No. 21.382 (t. or 1993) and this regulation.

Art. 11. The Implementing Authority shall issue the regulations and rules of interpretation of this decree, expressly empowering it to determine the scope of the rules adopted by this Decree.

Art. 12. Default of Decree No. 1225 of 14 November 1989.

Art. 13. Contact, post, give to the National Directorate of the Official Register and archvese. . MENEM. . Domingo F. Cavallo.

Annex I

FOREIGN INVESTMENT LAW

(T.O. 1993)

ARTICLE 1 . Foreign investors who invest capital in the country in any of the forms set out in Article 3 for the promotion of activities of an economic nature, or for the extension or improvement of those existing, shall have the same rights and obligations as the Constitution and the laws accord to national investors, subject to the provisions of this Law and those contemplated in special or promotional regimes.

ARTICLE 2 de For the purposes of this law is understood by:

1. Investment of foreign capital:

(a) Any capital contribution from foreign investors applied to economic activities carried out in the country.

(b) The acquisition of shares in the capital of an existing local company, by foreign investors.

2. Foreign investor: Any natural or legal person domiciled outside the national territory, holder of an investment of foreign capital, and local foreign capital companies defined in the next subparagraph of this article, when they are investors in other local companies.

3. Local foreign capital company: Any company domiciled in the territory of the Republic, in which physical or legal persons domiciled outside it, are directly or indirectly owned by more than 49 % of the capital or count directly or indirectly with the amount of votes necessary to prevail in shareholder assemblies or members' meetings.

4. Local company of national capital: Any company domiciled in the territory of the Republic, in which physical or legal persons also domiciled in it, are directly or indirectly owned by no less than 51 % of the capital and count directly or indirectly with the amount of votes necessary to prevail in the shareholder assemblies or members' meetings.

5. Home: The one defined in Article 89 and 90 of the Civil Code.

ARTICLE 3o La Foreign investment can be made in:

1. Foreign currency of free convertibility.

2. Capital assets, spare parts and accessories.

3. Uses or capital in national currency belonging to foreign investors, provided that they are legally in a position to be transferred abroad.

4. Capitalization of external credits in foreign currency of free convertibility.

5. Intangible property, according to specific legislation.

6. Other forms of contribution that are contemplated in special or promotional regimes.

ARTICLE 4o presente The regulation of this law will be determined by the administrative agency under the MINISTERY OF ECONOMY AND ARTWS AND SERVICES PUBLICS whose hierarchy will not be inferior to that of Undersecretariat, who will act as Authority of Application, also setting its constitution, functions and powers.

ARTICLE 5o . Foreign investors can transfer liquid and realized profits from their investments to the outside, as well as repatriate their investment.

ARTICLE 6 . Foreign investors may use any of the legal forms of organization provided for by national legislation.

ARTICLE 7o . Local foreign capital companies can make use of domestic credit with the same rights and under the same conditions as local national capital companies.

ARTICLE 8o O Transient contributions of foreign capital that are made on the basis of the execution of contracts of location of things, of works or of services or others are not covered by this law and shall be governed by the terms of the respective contracts in accordance with the legal provisions applicable to them, notwithstanding which the holders of such contributions may choose to make their investment within the terms of this law.

ARTICLE 9o . Legal acts celebrated between a local foreign capital company and the company that directly or indirectly controls or another subsidiary of the latter will be considered, for all purposes, as held between independent parties when their benefits and conditions conform to the normal practices of the market between independent entities.

ARTICLE 10. . Destroy the Nros Laws. 20,557, 20,575 and 21.037 and Nros Decrees. 413/74 and 414/74, the general resolutions issued as a result were repealed. This Law shall apply to any pending processing of resolution under the rules hereof repealed.