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The Foreign Investment Law

Original Language Title: Ley de la Inversión Extranjera

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Foreign Investment Law



Document: Foreign Investment Law
Document Type: Law
Date of issue: 29/03/2014
Number of Legal Instrument: 118
Broadcaster: National Assembly of People's Power
Date of entry to the repository: 27/06/2016
Source:
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JUAN ESTEBAN LAZO HERNÁNDEZ, President of the National Assembly of People's Power of the Republic of Cuba.

I DO KNOW: That the National Assembly of the People's Power of the Republic of Cuba, in its First Extraordinary Session of the Eighth Legislature, on March 29, 2014, has approved the following:

WHY: Our country in the face of the challenges it faces to achieve sustainable development can, through foreign investment, access external financing, technologies and new markets, as well as insert products and Cuban services in international value chains and generate other positive effects towards their domestic industry, thus contributing to the growth of the nation.

BY HOW much: The changes taking place in the national economy as a result of the update of the Cuban economic model governed by the Economic and Social Policy Guidelines of the Party and the Revolution, advise to review and adjust the legal framework for foreign investment established by Law No. 77 "Law on Foreign Investment" of 5 September 1995, to offer greater incentives to the foreign investment and to ensure that the attraction of foreign capital contributes effectively to the objectives of the sustainable economic development of the country and the recovery of the national economy, on the basis of the protection and rational use of human and natural resources and respect for national sovereignty and independence.

BY HOW much: The Constitution of the Republic establishes among other forms of property, that of joint ventures, societies and economic associations and provides, with respect to the state property, the total or partial transmission of economic objectives for their development, on an exceptional basis, if this is useful and necessary for the country.

BY TANTO: The National Assembly of People's Power, in use of the powers conferred on it in Article 75 (b) of the Constitution of the Republic, agrees to dictate the following:

LAW 118

FOREIGN INVESTMENT LAW

CHAPTER I

OF OBJECT AND CONTENT

ARTICLE 1.1.-This Law aims to establish the legal framework for foreign investment in the national territory on the basis of respect for the law, sovereignty and independence of the nation and mutual benefit, to contribute to our economic development on the basis of a prosperous and sustainable socialist society.

2. This Law and its complementary legislation provide for a system of facilities, guarantees and legal certainty for the investor that promotes the attraction and use of foreign capital.

3. Foreign investment in the country is oriented towards diversification and expansion of export markets, access to advanced technologies, substitution of imports, prioritizing food. Similarly to obtaining external financing, the creation of new sources of employment, the acquisition of management methods and the linking of the same to the development of productive chains, as well as to the change of the matrix energy from the country through the use of renewable energy sources.

4. The provisions contained in this Law include guarantees to investors, the sectors eligible for foreign investment, the modalities they may adopt, investments in real estate, contributions and their valuation, as well as the regime for their negotiation and authorisation. They also lay down the banking system, the export and import arrangements, the labour market, the tax system, the reserves and the insurance system and the financial reporting and information system; the rules on the protection of the environment, the rational use of natural resources, the protection of scientific and technological innovation; it institutes the actions of control to foreign investment and the regime of conflict resolution.

CHAPTER II

OF THE GLOSSARY

ARTICLE 2.-In this Law and its Regulations are used with the meaning that in each case is indicated, the following terms:

(a) International economic association: union of domestic and foreign investors within the national territory for the production of goods, the provision of services or both, for a lucrative purpose, comprising joint ventures and international economic partnership contracts.

(b) Authorisation: an enabling title issued by the Council of Ministers or by the head of the Central Administration of the State in which it is delegated, for the implementation of any of the foreign investment provided for in this Law.

(c) Foreign Capital: Capital from abroad, as well as the share of dividends or profits belonging to the foreign investor that are reinvested under this Law.

(d) Senior management fees: charges of members of the management and management bodies of the joint venture and of the wholly foreign capital undertaking, as well as of the representatives of the parties to the international economic partnership contracts.

e) Administrative assignment: an enabling title which provides, on a temporary basis, the Council of Ministers for the management of a public service, the performance of a public work or the exploitation of a domain good public, under the terms and conditions to be established.

f) International economic partnership agreement: agreement between one or more national investors and one or more foreign investors to carry out acts of an international economic association without constitute a legal person other than the parties.

g) Fully foreign capital company: a foreign-funded business entity without the concurrence of any national investor or natural person with foreign capital.

(h) Company Mixta: a Cuban merchant company that adopts the form of a public limited company for nominative shares in which one or more national investors and one or more investors participate as shareholders. foreign.

i) Employer entity: a Cuban entity with a legal personality entitled to conclude a contract with a joint venture or wholly foreign capital by which it provides the workers ' request necessary, who have their employment contracts with that entity.

j) Haberes: salaries, income and other remuneration, as well as increases, compensation or other additional payments that Cuban and foreign workers receive, with the exception of those from the fund economic stimulation, if this exists.

k) Foreign investment: a contribution made by foreign investors in any of the modalities provided for in the Law, which implies, within the period for which it is authorized, the assumption of risks in the business, expectation of making a profit and contribution to the development of the country.

(l) Foreign investor: natural or legal person, with domicile and capital abroad, who participates as a shareholder in a joint venture or participates in a wholly foreign capital company or is listed as part of an international economic partnership contract.

m) National investor: legal person of Cuban nationality, with domicile in the national territory, who participates as a shareholder in a joint venture, or is part of an economic association contract

n) Special Development Zone: an area where special policies and policies are established, with the aim of promoting sustainable economic development through attracting foreign investment, innovation technological and industrial concentration, with a view to increasing exports, effective substitution of imports and the generation of new sources of employment, in a constant articulation with the internal economy.

CHAPTER III

OF THE GUARANTEES TO INVESTORS

ARTICLE 3.-The Cuban State guarantees that the benefits granted to foreign investors and their investments are maintained throughout the period for which they have been granted.

ARTICLE 4.1.-Foreign investments within the national territory enjoy full legal protection and security and cannot be expropriated, unless that action is executed for reasons of public utility or social interest previously. declared by the Council of Ministers, in accordance with the provisions of the Constitution of the Republic, the international treaties signed by the Republic of Cuba in the field of investments and the legislation in force, with due compensation for its established commercial value of mutual agreement, payable in currency freely convertible.

2.-If no agreement is reached on the commercial value, the fixing of the price is made by an organization of international prestige in the business valuation, authorized by the Ministry of Finance and Prices and contracted to the effect by the agreement of the parties involved in the expropriation process. If there is no agreement between them regarding the selection of the said organisation, at their choice, a draw will be made to determine it or go to court.

ARTICLE 5.-Foreign investments are protected in the country, against third-party claims that conform to the law or the extraterritorial application of laws of other states, in accordance with Cuban laws and the courts. Cubans.

ARTICLE 6.1.-The period of authorization granted for the development of the operations of a joint venture, of the parties to an international economic association contract or of the wholly foreign capital company, may be extended by the authority that granted it, provided that it is requested by the interested parties before the expiry of the deadline.

2.-If the term is not extended to maturity, the joint venture, the international economic association contract or the wholly foreign capital firm shall be wound up as agreed in the instruments of incorporation. and the provisions of the legislation in force. Whatever corresponds to the foreign investor, it will be paid in freely convertible currency, except pact expressed to the contrary.

ARTICLE 7.1.-The foreign investor party to an international economic association may, upon agreement of the parties, sell or transmit in any other form to the State, a third party or the parties to the association, upon authorization, totally or partially, their rights in it, receiving in currency freely convertible the equivalent price, except express pact to the contrary.

2.-The foreign investor in a wholly foreign capital company may, in any other way, sell or transmit to the State or a third party, upon authorization, its rights in it, in whole or in part, receiving in currency Freely convertible the equivalent price, except pact expressed to the contrary.

ARTICLE 8.-The amount corresponding to the foreign investor in the cases referred to in Articles 6 and 7 of this Law is determined by agreement between the parties. If it is necessary to go to a third party at any time to establish the amount, an international prestige organization is selected in the business valuation, authorized by the Ministry of Finance and Prices.

ARTICLE 9.1.-The State guarantees to the foreign investor the free transfer abroad in currency freely convertible, without payment of taxes or other charge related to such transfer, of:

(a) the dividends or profits that you derive from the exploitation of the investment; and

(b) the amounts to be received in the cases referred to in Articles 4, 6 and 7 of this Law.

2.-Foreign natural persons providing their services to a joint venture, to the parties in any other form of international economic association or to a wholly foreign capital undertaking, provided they are not resident Permanent in the Republic of Cuba, they have the right to transfer abroad the assets they receive within the amount and in accordance with the other regulations issued by the Central Bank of Cuba.

ARTICLE 10.-Mixed companies and domestic and foreign investors parties to contracts of international economic association are subject to the special tax regime provided by this Law, until the expiration of the deadline by the that were authorized.

CHAPTER IV

OF FOREIGN INVESTMENT AND OPPORTUNITY PORTFOLIO TARGET SECTORS

ARTICLE 11.1.-Foreign investment can be authorized in all sectors, with the exception of health and education services to the population and the armed institutions, except in their business systems.

2.-The Council of Ministers approves the opportunities for foreign investment to promote and the general and sectoral policies for foreign investment, which are published in the Portfolio of Foreign Investment Opportunities by the Ministry of Foreign Trade and Foreign Investment.

3.-The organs, agencies of the Central Administration of the State and national entities sponsoring foreign investment have the obligation, in accordance with the approved policies, to identify and present the Ministry of Commerce Foreign investment and Foreign Investment business proposals with foreign investment.

4.-The Minister of Foreign Trade and Foreign Investment reports annually to the Council of Ministers the state of conformation and updating of the Portfolio of Opportunities by the organs, agencies of the Central Administration of the State and national entities sponsoring foreign investment.

CHAPTER V

OF FOREIGN INVESTMENTS

FIRST SECTION

The modalities of foreign investment

ARTICLE 12.-The foreign investment defined in this Law may manifest itself as:

(a) direct investment, in which the foreign investor participates as a shareholder in a joint venture or wholly foreign capital or with contributions in international economic partnership contracts, effectively participating in business control; and

b) investments in shares or in other securities, public or private, that do not have the condition of direct investment.

ARTICLE 13.1.-Foreign investment takes any of the following:

a) mixed enterprise;

b) international economic partnership contract; or

c) wholly foreign capital company.

2.-As contracts of international economic association classify, among others, the contracts at risk for the exploration of non-renewable natural resources, for the construction, the agricultural production, the hotel administration, productive or services and contracts for the provision of professional services.

SECOND SECTION

From the mixed enterprise

ARTICLE 14.1.-The joint venture involves the formation of a legal person other than that of the parties, takes the form of an anonymous company for nominative actions and is applicable to the legislation in force in the matter.

2.-The proportions of the social capital to be provided by national investors and foreign investors are agreed by the partners and established in the authorization.

3.-The association agreement is the agreement signed between the partners and contains the foundation-mental covenants for the conduct of the business they intend to develop.

4. The formation of a joint venture requires the form of public deed as an essential requirement for its validity, and the social statutes are incorporated and attached to the authorization and the association agreement.

5.-The social statutes include provisions related to the organization and operation of society.

6.-The joint venture acquires legal personality when it is registered in the Commercial Registry.

7.-Created a joint venture, may change the shareholders, by agreement between them, after approval of the authority that granted the authorization.

8.-Mixed companies can create offices, representations, branches and subsidiaries, both in the national territory and abroad, as well as having units in entities abroad.

9. The dissolution and liquidation of the joint venture is governed by the provisions of its social statutes, subject to the provisions of the legislation in force.  SECTION THIRD

From the international economic partnership contract

ARTICLE 15.1.-The contract of international economic association has, among others, the following characteristics:

(a) does not imply the constitution of a legal person other than that of its parties;

b) may be intended to perform any activity contained in the Authorization;

(c) the parties are free to stipulate all covenants and clauses that understand their interests, provided that they do not infringe the authorized object, the conditions of the authorization or the legislation current; and

d) each contracting party makes different contributions, constituting an accumulation of participations of which they are owners at all times and although without becoming a social capital, they are able to reach to form a common fund, as long as the ownership portion of each of them is determined.

2.-In contracts of international economic association, the object of which is the hotel, production or service administration or the provision of professional services, there is no accumulation of participations or a common fund, and they have the characteristics described in paragraphs 3 and 4 of this Article.

3. International economic partnership contracts for hotel, production or service management are aimed at achieving better customer services or higher quality productions, benefiting from the use of a brand name internationally recognized and with advertising, as well as the international marketing and promotion of the foreign investor. The same have the following characteristics:

(a) the foreign investor acts in the name and representation of the national investor in respect of the signed management contract;

b) no utilities are shared; and

c) the payment to the foreign investor is conditioned to the results of his/her management.

4.-Contracts of international economic association for the provision of professional services have, inter alia, the following characteristics:

a) are subscribed with foreign companies consulting internationally recognized prestige; and

b) aim at the joint provision of audit services, accounting advice, insurance and corporate finance, organizational reengineering, marketing and business management services. insurance intermediation.

5. The contract of international economic association requires for its validity the form of public deed and enters into force at the time of its registration in the Commercial Registry.

6.-Granted an international economic partnership contract cannot change its parts, except by agreement between them and with the approval of the authority that granted the authorization.

7. The termination of the contract of international economic association is governed by the provisions of the contract, subject to the provisions of the legislation in force.

SECTION FOURTH

From the wholly foreign capital company

ARTICLE 16.1.-In the wholly foreign capital company, the foreign investor exercises the direction of the same, enjoys all the rights and responds to all the obligations prescribed in the authorization.

2.-The foreign investor in wholly foreign capital companies, upon registration in the Commercial Registry, may be established within the national territory:

a) as a natural person, acting for themselves;

b) as a legal person, constituting a Cuban subsidiary of the foreign entity from which it owns, through public deed, in the form of an anonymous company for nominative shares; or

c) as a legal person, establishing a branch of a foreign entity.

3.-wholly foreign capital companies incorporated as a subsidiary may create offices, representations, branches and subsidiaries, both in the national territory and abroad, as well as to have units in the outside.

4.-The dissolution and liquidation of the wholly foreign capital company in the form of a Cuban subsidiary is governed by the provisions of its social statutes, subject to the provisions of the legislation in force.

5.-The termination of the activities authorized to the natural person and the branch of foreign company is governed by the provisions of the authorization and in what is established in the legislation in force.

CHAPTER VI

INVESTMENTS IN REAL ESTATE

ARTICLE 17.1.-In accordance with the modalities laid down in this Law, investments in real estate may be made and obtain their property or other real rights.

2.-Investments in real estate as referred to in the previous paragraph may be directed to:

(a) dwellings and buildings, dedicated to private homes or for tourist purposes;

(b) housing or offices of foreign legal persons; or

c) real estate developments for tourism purposes.

CHAPTER VII

OF CONTRIBUTIONS AND THEIR VALUATION

ARTICLE 18.1.-For the purposes of this Law, the following contributions are considered:

(a) cash contributions, which in the case of the foreign investor is freely convertible into currency;

b) machinery, equipment, or other tangible goods;

c) intellectual property rights and other rights to intangible assets;

(d) the right of ownership of movable and immovable property and other real rights to property, including those of usufruct and surface; and

e) other goods and rights.

Contributions that do not consist of freely convertible currency are valued in that currency.

2.-The transfer in favor of the national investors of the property or of other real rights on state property, to be contributed by those, is carried out under the principles established in the Constitution of the Republic and previous certification of the Ministry of Finance and Prices, heard the opinion of the body, body or entity concerned and with the approval of the Council of Ministers or its Executive Committee, as appropriate.

As regards the contributions of intellectual property rights and other rights to intangible assets, it will be subject to the provisions of the legislation governing this matter.

3. The currency contributions in freely convertible currency are valued in the international market and for the effects of the change in Cuban pesos, the exchange rates of the Central Bank of Cuba apply. The freely convertible currency, which constitutes a foreign capital contribution, is entered into the country through a banking institution authorized to carry out operations in the national territory and is deposited in the country according to the regulations in force in the country. matter.

4.-The contributions of the foreign party that are not cash contributions, which are destined for the social capital of joint ventures, of capital companies wholly foreign or that constitute contributions in contracts of economic association (i) international agreements are valued by means of the methods freely agreed by investors, provided that they are generally accepted by international valuation standards, and their value is credited to the corresponding expert certificate extended by entities holding the authorisation of the Ministry of Finance and Prices and are transcribed in the public write that is granted.

CHAPTER VIII

OF NEGOTIATION AND AUTHORIZATION OF FOREIGN INVESTMENT

ARTICLE 19.1.-For the creation of an international economic association, the national investor must negotiate with the foreign investor every aspect of the investment, including its economic feasibility, the respective contributions, according to corresponds to the form of management and administration of that association, as well as the legal documents for its formalization.

2.-If it were a wholly foreign capital company, the Ministry of Foreign Trade and Foreign Investment indicates to the investor, the Cuban entity responsible for the branch, subbranch or economic activity in which it intends to make your investment, with which you must analyze your proposal and obtain the corresponding written approval.

ARTICLE 20.-The Cuban State authorizes foreign investments that do not affect national defense and security, the nation's heritage and the environment.

ARTICLE 21.1.-The approval to make foreign investments in the national territory is granted on the basis of the sector, the modality and the characteristics of the foreign investment, by the following organs of the State:

(a) the State Council;

b) the Council of Ministers; and

(c) the head of the Central Administration of the State authorised to do so.

2.-The State Council approves foreign investment, whatever its modality, in the following cases:

(a) when non-renewable natural resources are explored or exploited, except under international economic partnership contracts at risk which are approved and approved in accordance with paragraph 3 (d) of the present Article; and

(b) where they are carried out for the management of public services, such as transport, communications, aqueducts, electricity, the performance of a public work or the exploitation of a public domain good.

Approved foreign investment by the State Council, in the cases previously provided, is given the authorization by the Council of Ministers.

3.-The Council of Ministers approves and dictates the authorization of foreign investment, in the case of:

a) real estate developments;

(b) wholly foreign capital companies;

(c) the transmission of state ownership or other real rights to state assets;

(d) international economic partnership contracts at risk for the exploitation of non-renewable natural resources and their production;

e) the intervention of a foreign company with public capital participation;

f) the use of renewable energy sources;

g) the business system in the health, education and armed institutions sectors; and

h) other foreign investments that do not require State Council approval.

4.-The Council of Ministers may delegate to the heads of the agencies of the Central Administration of the State the power to approve and authorize foreign investments in the cases of their competence and in accordance with their modality or sectors. addressees.

ARTICLE 22.1.-For the formation of a joint venture or wholly foreign capital company, as well as for the conclusion of an international economic association agreement, it is appropriate to present the application to the Minister of Commerce Foreign and Foreign Investment, in accordance with the provisions of the Rules of Procedure of this Law.

2.-If the objective of the approved investment is the management of a public service, the realization of a public works or the exploitation of a good of public domain, the Council of Ministers, once approved by the State Council, grants the corresponding administrative concession, under the terms and conditions it establishes, in accordance with the provisions of the legislation in force.

3.-The decision rejecting or authorizing foreign investment by the competent authority is dictated within the period of sixty calendar days from the filing date of the application and must be notified to the applicants.

In cases of foreign investment modalities subject to the approval of heads of agencies of the Central Administration of the State, the decision is made within the period of forty-five calendar days, counted from the date of which was admitted.

ARTICLE 23.-Amendments to the conditions set out in the Authorization require approval from the competent authority as provided for in Article 21 of this Law.

ARTICLE 24.-The conditions set out in the authorization may be clarified, through the Ministry of Foreign Trade and Foreign Investment, at the request of investors.

CHAPTER IX

OF THE BANKING SYSTEM

ARTICLE 25.1.-Mixed companies, domestic investors and foreign investors parties in international eco-nomic association contracts and foreign capital companies, open accounts at any bank of the  National Banking System, by means of which they make the charges and payments that generate their operations according to the current monetary regime. They will also be able to access the services offered by established financial institutions in the country.

2.-Mixed companies and national investors parties to international economic association contracts, subject to the authorization of the Central Bank of Cuba and in accordance with current regulations, may open and operate accounts in currency freely convertible into foreign-based banks. They can also arrange credit operations with foreign financial institutions in accordance with current regulations.

CHAPTER X

FROM THE EXPORT AND IMPORT REGIME

ARTICLE 26.1.-Mixed companies, domestic investors and foreign investors parties in international economic partnership contracts and wholly foreign capital companies are entitled, according to the provisions for such purposes, to be exported and imported directly for their purposes.

2.-Joint ventures, parties to international economic partnership contracts and wholly foreign capital companies will, preferably, acquire goods and services on the domestic market, offered in equal terms quality, prices and delivery times for the international market.

CHAPTER XI

OF THE WORK REGIME

ARTICLE 27.-In the activity of foreign investments, the labor and social security legislation in force in the Republic of Cuba is complied with, with the appropriate adjustments in this Law and its Rules of Procedure.

ARTICLE 28.1.-Workers who provide their services in the activities corresponding to foreign investments will be generally, Cubans or foreign permanent residents in the Republic of Cuba.

2.-However, the management and management bodies of joint ventures or wholly foreign capital companies or the parties to international economic partnership contracts may decide, that certain senior management or some technical jobs, be performed by non-permanent resident persons in the country and in such cases determine the employment status to be applied and the rights and obligations of those workers.

3. Non-permanent residents in the country who are hired are subject to the legal immigration and immigration provisions in force in the nation.

ARTICLE 29.1.-Mixed enterprises, parties to international economic association contracts and wholly foreign capital companies may be authorized by the Ministry of Foreign Trade and Foreign Investment to create a economic stimulation fund for Cuban workers and foreign permanent residents in the Republic of Cuba who provide their services in activities corresponding to foreign investments. Contributions to the economic stimulation fund are made from the profits obtained.

2.-Except for the creation of the stimulation fund provided for in the preceding paragraph, contracts for hotel, production or service management and contracts for the provision of professional services.

ARTICLE 30.1.-Cuban or foreign permanent resident in the Republic of Cuba who provides services in mixed enterprises, with the exception of the members of its management and administration body, is contracted by an entity The Ministry of Foreign Trade and Foreign Investment and authorized by the Ministry of Labor and Social Security.

The members of the management and management body of the joint venture are appointed by the general meeting of shareholders and are linked to the joint venture in the appropriate cases.

Only by exception, when granting authorization, can all persons providing their services in the joint venture be able to be hired directly by the joint venture and always in accordance with the legal provisions in force in the field. of employment contracts.

2.-Cuban or foreign permanent resident workers in the Republic of Cuba who provide their services to the parties in international economic association contracts are contracted by the Cuban party, according to the legal provisions in force on employment contracts.

3.-In foreign capital companies, the services of Cuban or foreign permanent resident personnel in the Republic of Cuba, with the exception of the members of their higher management and administration, are provided by means of a contract which underwrites the company with an employer proposed by the Ministry of Foreign Trade and Foreign Investment and authorised by the Ministry of Labour and Social Security.

The members of the management and management bodies of the wholly foreign capital company are appointed and will be linked to this in the appropriate cases.

4.-Payments to Cuban workers and foreign permanent residents in the Republic of Cuba are made in Cuban pesos.

ARTICLE 31.1.-The employing entity referred to in the previous article, individually hires Cuban and foreign permanent resident workers in the Republic of Cuba, who maintain their employment relationship with them according to the provisions of the legislation in force in this field.

2.-When joint ventures or wholly foreign capital firms consider that a given worker does not meet their requirements at work, they may apply to the employer to replace it with another. Any work claim is resolved in the employing entity in accordance with the procedure laid down in the specific legislation.

ARTICLE 32.-Notwithstanding the provisions of the preceding articles of this Chapter, in the authorization to approve foreign investment, by way of exception, special labor regulations may be established.

ARTICLE 33.-The rights of Cuban workers who participate in obtaining technological or organizational results consistent with innovations that provide benefits are recognized in accordance with current legislation. economic, social or environmental.

CHAPTER XII

OF THE SPECIAL TAXATION REGIME

ARTICLE 34.-Mixed companies and domestic and foreign investors parties in contracts of international economic association, regarding the fulfillment of the tax obligations and their rights as taxpayers will be governed by the established in the existing provisions on the subject, with the appropriate adjustments in the following Articles.

ARTICLE 35.-The payment of the tax on personal income, to foreign investors partners in joint ventures or parts in contracts of international economic association, by the income earned from the dividends or benefits of the business.

ARTICLE 36.1.-The income tax, paid by mixed companies, domestic and foreign investors parties in contracts of international economic association applying a tax rate of fifteen percent on utility taxable net.

2.-The payment of income tax to joint ventures and parties to international economic partnership contracts for an eight-year period from the date of its constitution is waived. The Council of Ministers may extend the approved exemption period.

3.-The payment of the income tax, net income or other benefits authorized to reinvest, in cases where the reinvestment of these in the country by the competent authority is approved.

4.-When the exploitation of natural resources, renewable or not, is possible, the tax rate of the profit tax can be increased by decision of the Council of Ministers. In this case it can be raised by up to fifty percent.

ARTICLE 37.1.-Mixed companies and domestic and foreign investors parties in international economic association contracts pay the sales tax with a 50 percent bonus on the tax rate apply on wholesale sales.

2.-The payment of this tax is waived for joint ventures and domestic and foreign investors parties in contracts of international economic association, during the first year of operation of the investment.

ARTICLE 38.1.-Mixed companies and domestic and foreign investors parties in contracts of international economic association pay tax on services with a 50 percent bonus on the tax rate apply.

2.-The payment of this tax is waived for joint ventures and domestic and foreign investors parties in contracts of international economic association, during the first year of operation of the investment.

ARTICLE 39.-The payment of the tax for the use of the work force is waived for joint ventures and domestic and foreign investors parties in contracts of international economic association.

ARTICLE 40.-Mixed companies and domestic and foreign investors parties in contracts of international economic association pay taxes for the use or exploitation of the beaches, for the approved dumping of waste in basins hydrographic, by the use and exploitation of bays, by the use and exploitation of forest resources and wildlife and by the right of use of terrestrial waters, with a bonus of fifty percent during the period of recovery of the investment.

ARTICLE 41.-The payment of customs duty to joint ventures, domestic and foreign investors, parties to contracts of international economic association, imports of equipment, machinery and other means is waived. the investor process, in accordance with the rules established in this respect by the Minister of Finance and Prices.

ARTICLE 42.-They are taxable persons of the territorial contribution for the local development, the joint ventures, the national and foreign investors parts in contracts of international economic association and the enterprises of capital foreign.

The payment of the territorial contribution for local development, during the period of recovery of the investment, to the joint ventures, as well as to the national and foreign investors parties in contracts of eco-nomic association

ARTICLE 43.1.-It is excluded from the provisions of the foregoing articles to domestic and foreign investors parties to contracts of international economic association that have as object the hotel administration, productive or services and the provision of professional services, which are taxed in accordance with the provisions of the Tax System Law and the rules that supplement it.

2.-Foreign investors parties to the contracts referred to in the preceding paragraph are exempt from sales tax and service tax.

ARTICLE 44.-The foreign capital companies are obliged to pay the taxes in accordance with the current legislation, without prejudice to the tax benefits established by the company. Ministry of Finance and Prices, provided it is of interest to the country.

ARTICLE 45.-For the purposes of this Law, the General Customs of the Republic may grant to the natural and legal persons referred to in this Chapter, special facilities as regards the formalities and the customs procedure, in Correspondence with the provisions of the existing legislation.

ARTICLE 46. The payment of taxes and other duties collected in customs, is carried out in accordance with the legislation in force in the field, except for cases established by the Council of Ministers on the occasion of authorizing the modality of investment.

ARTICLE 47.-The Ministry of Finance and Prices, heard the opinion of the Ministry of Foreign Trade and Foreign Investment, taking into account the benefits and the amount of the investment, the recovery of the capital, the indications that The Council of Ministers for the sectors of the economy prioritized, as well as the benefits that it can report to the national economy, can grant total or partial exemptions, in a temporary or permanent manner, or to grant other tax benefits in accordance with the provisions of the tax legislation in force, for any of the foreign investment modalities recognized in this Law.

CHAPTER XIII

OF RESERVES AND INSURANCE

ARTICLE 48.1.-Mixed companies, domestic and foreign investors parties in contracts of international economic association and foreign capital companies, constitute in charge of their profits and with character mandatory, a reserve to cover any contingencies that may occur in its operations.

2.-The procedure for the formation, use and liquidation of the reservation provided for in the previous paragraph, is regulated by the Ministry of Finance and Prices.

ARTICLE 49.-Without prejudice to the reservation referred to in the previous article, joint ventures, domestic and foreign investors parties to contracts of international economic association and capital companies abroad, may constitute reserves on a voluntary basis subject to the regulations of the Ministry of Finance and Prices.

ARTICLE 50.1.-Mixed companies, domestic and foreign investors parties in international economic association contracts and foreign capital companies are required to contract the insurance of any kind and responsibilities. Cuban insurers will have the right of first choice under competitive conditions at international level.

2.-Industrial, tourist or other facilities or land, which are leased by state enterprises or other national organizations, are insured by the tenant in favor of the lessor, in correspondence with the conditions laid down in the previous paragraph.

CHAPTER XIV

OF THE REGISTRATION AND FINANCIAL INFORMATION REGIME

ARTICLE 51.-Mixed companies, domestic and foreign investors parties in international economic association contracts and foreign capital companies prior to the commencement of their operations, have thirty  natural days from the date of notification of the authorization for the granting of the necessary notarial public documents and within thirty days of this act, are entered in the Mercantile Register.

ARTICLE 52.-Mixed companies, parties to international economic association contracts and foreign capital companies are subject to compliance with the Cuban Financial Reporting Standards dictated by the Ministry of Finance and Prices.

ARTICLE 53.1.-The subjects referred to in the previous article, present to the Ministry of Foreign Trade and Foreign Investment the annual report of their operations and any other information required, in accordance with the provisions of the Regulation of this Law.

2.-The presentation of the annual report provided for in the previous paragraph is carried out independently of its information obligations with the Ministry of Finance and Prices, the corresponding tax administration, the National Office of Statistics and Information, as well as the information required by the methodological and control regulations of the National Economy Plan.

CHAPTER XV

SCIENCE, TECHNOLOGY, ENVIRONMENT AND INNOVATION

ARTICLE 54.-Foreign investment is stimulated, authorized and operated in the context of the country's sustainable development, which implies that, in all its phases, the introduction of technology, the conservation of the environment will be carefully addressed. and the rational use of natural resources.

ARTICLE 55.-The Foreign Trade and Foreign Investment Ministry submits the investment proposals it receives to the Ministry of Science, Technology and the Environment, which evaluates its convenience from the point of view. environmental impact assessment, as well as the origin of the granting of the relevant environmental licenses and the control and inspection regime, in accordance with the provisions of the legislation in effect.

ARTICLE 56.1.-The Ministry of Science, Technology and the Environment gives the necessary measures to provide an adequate solution to situations that cause damage, hazards or risks to the environment and the rational use of resources. natural.

2.-The natural or legal person responsible for the damage or injury is obliged to recover the previous environmental situation and the corresponding compensation or compensation, as the case may be.

ARTICLE 57.-The Foreign Trade and Foreign Investment Ministry presents the proposal for investment that the Ministry of Science, Technology and the Environment has to evaluate its technological feasibility and the measures for the protection and management of intellectual property necessary to ensure the country's technological sovereignty.

ARTICLE 58.-The rights to the results achieved in the framework of any of the modalities of foreign investment, which may be protected by the intellectual property path, are governed by what is agreed in the documents constitutive in accordance with the legislation in force in this field.

CHAPTER XVI

OF CONTROL ACTIONS

ARTICLE 59.1.-Foreign investment modalities are subject to the control actions established in the current legislation and are carried out by the Ministry of Foreign Trade and Foreign Investment, as well as by other bodies, bodies of the Central Administration of the State or national governing bodies in the various activities with competence to do so.

2.-Control actions are intended to evaluate, among others, compliance with:

(a) the legal provisions in force; and

b) the approved conditions for the constitution or instrumentation of each business.

CHAPTER XVII

OF THE CONFLICT RESOLUTION REGIME

ARTICLE 60.1.-Conflicts arising from relations between the partners of a joint venture or between domestic and foreign investors parties in contracts of international economic association or between the partners of a company of Wholly foreign capital in the form of an anonymous company for nominative shares, is settled as agreed in the instruments of incorporation, except for the cases provided for in this Chapter.

2.-The same rule applies when the conflict occurs between one or more partners and the mixed enterprise or the wholly foreign capital company to which they belong.

3.-The conflicts arising out of the inactivity of the governing bodies of the foreign investment modalities provided for in the Law, as well as the dissolution or termination and liquidation of these, will be resolved in all cases by The Economic Chamber of the Provincial People's Court.

4.-Conflicts arising from relationships between the partners of a joint venture or a wholly foreign capital company in the form of an anonymous company for nominative shares or between domestic and foreign investors parties to contracts of international economic association, which have been authorized to carry out activities related to natural resources, public services and execution of public works, are resolved by the Economic Chamber of the Provincial People's Court of the People's Republic of the European Authorization.

The rule above applies when the conflict occurs between one or more foreign partners and the mixed enterprise or the wholly foreign capital company to which they belong.

ARTICLE 61.-Disputes on the execution of economic contracts that arise between the different forms of foreign investment provided for in the Law or between them with Cuban legal or natural persons, can be resolved by the Chamber of the Economic of the Provincial People's Court, without prejudice to the subject of arbitration in accordance with Cuban law.

SPECIAL PROVISIONS

FIRST: Mixed companies, domestic and foreign investors parties to international economic partnership contracts and wholly foreign capital companies, are subject to regulations to be established in the legislation. in the field of disaster reduction.

SECOND: The provisions of this Law, its Rules of Procedure and the Complementary Rules, are applicable to foreign investment established in the special development zones with the appropriate adjustments to the special rules to be applied to they are dictated and provided that they do not object to its functioning. Without prejudice to the foregoing, the special schemes provided for in this Law shall apply to such investments where they are most beneficial to them.

TRANSIENT PROVISIONS

FIRST: This Law is applicable to international economic associations, to the existing foreign capital companies and to those in operations to the date of its entry into force.

The benefits granted under the Decree-Law No. 50 "On Economic Partnership between Cuban and Foreign Entities" of 15 February 1982 and Law No. 77 "Law on Foreign Investment" of 5 September 1995 are maintained. for the duration of the term of the international economic association or of the wholly foreign capital undertaking.

SECOND: This Act applies to requests for foreign investment authorization that are in fulfillment of the date of its entry into force.

THIRD: The complementary provisions dictated by the various agencies of the Central Administration of the State for the best application and enforcement of the rules of Law No. 77 of 5 September 1995, concerning each one, continue to apply in so far as they do not object to this Law. The bodies involved, within a period of not more than three months, counted from the entry into force of this Law, will review these rules and, heard the Ministry of Foreign Trade and Foreign Investment, will harmonize them. in accordance with the requirements of this Law.

FOURTH: Joint ventures, parties to international economic partnership contracts and wholly foreign capital companies, may be exceptionally authorized by the Council of Ministers to carry out certain charges and payments in Cuban pesos.

QUINTA: To proceed with the payment in Cuban pesos as provided for in Article 30 (4), these amounts must be obtained in advance with convertible pesos.

SIXTH: The payment of taxes and other duties collected at customs by investors is made in convertible pesos, even in cases where the amount is expressed in Cuban pesos.

SEVENTH: The provisions of the Fourth, Fifth and Sixth Provisions, which precede, remain in force until the monetary unification becomes available in the country, from which, the subjects required by this Law shall be governed by the rules which such effects are established.

FINAL PROVISIONS

FIRST: The Council of Ministers will dictate the Regulation of this Law within the non-sale days following its approval.

SECOND: Law No. 77 "Foreign Investment Law" of 5 September 1995; Decree-Law No. 165 "of the Free Zones and Industrial Parks" of 3 June 1996; and the agreements No. 5279 of 18 October 2004; No. 5290, are repealed. of 11 November 2004; No. 6365 of 9 June 2008, adopted by the Executive Committee of the Council of Ministers and any other legal provisions opposing the provisions of this Law.

THIRD: This Act enters into force on the next ninety days of its approval.

FOURTH: Publish, together with your Rules of Procedure and other supplementary provisions in the Official Gazette of the Republic for general knowledge.

DADA in the session hall of the National Assembly of People's Power, the Palace of the Conventions, in the city of Havana, at 29 days of the month of March 2014.

Juan Esteban Lazo Hernandez