The Foreign Investment Law

Original Language Title: Ley de la Inversión Extranjera

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Read the untranslated law here: http://www.parlamentocubano.cu/?documento=ley-de-la-inversion-extranjera-2

JUAN ESTEBAN LAZO HERNÁNDEZ, President of the Assembly national of the power people of the Republic of Cuba.

I do know: That the Assembly national of the power people of the Republic of Cuba, at its first extraordinary session of the legislature VIII, on March 29, 2014 has endorsed the following: whereas: our country faced the challenges facing sustainable development can, through investment, access to external financing, technologies and new markets as well as insert products and services Cuban in international value chains and generate other positive effects towards its domestic industry, thus contributing to the growth of the nation.

Whereas: The changes taking place in the national economy as a result of the update of the Cuban economic model governed by the guidelines of economic policy and Social of the party and the revolution, advise review and adapt the legal framework of the foreign investment established by law No. 77 "Law of the foreign investment", of 5 September 1995 to provide greater incentives for this and ensure that the attraction of foreign capital will effectively contribute to the objectives of the 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.

FOR: The Constitution of the Republic establishes among other forms of property, the joint enterprises, societies and economic associations and provides, with respect to State ownership, the total or partial transmission of economic goals aimed at its development, exceptionally, if this proves necessary and useful to the country.

POR_TANTO: The National Assembly of the Popular power, use of the powers that are conferred in article 75, paragraph b) of the Constitution of the Republic, according to dictate the following: Law 118 law of the investment foreign chapter I of the object and content article 1.1.-this law aims to establish the legal framework of the foreign investment in the national territory on the basis of the rule of law the sovereignty and independence of the nation and mutual benefit, to contribute to our economic development on the basis of a sustainable and prosperous socialist society.

2. the present law and its complementary legislation establishes a regime of facilities, guarantees and legal security to the investor than conducive attraction and utilization of foreign capital.

3. the foreign investment in the country is aimed at the diversification and expansion of the export markets, access to advanced technologies, import substitution, prioritizing food. In the same way to obtain external financing, the creation of new sources of employment, the recruitment of managerial methods and linking it with the development of productive linkages, as well as the change of the energy matrix of the country through the use of renewable energy sources.

4. the provisions contained in this law include guarantees to investors, sectors recipients of foreign investment, modalities that can take these, investments in real estate, the contributions and their valuation, as well as the regime for its negotiation and authorization. They also establish the banking regime, that of export and import, the labor, tributary, the of reserves and insurance and the registration and financial information; the rules concerning the protection of the environment, the rational use of natural resources, the protection of scientific and technological innovation; establishing control actions to foreign investment and the dispute settlement regime.

 

Chapter II of the glossary article 2.-this law and its regulations the following terms are used with the meaning in each case shown,: to) international economic association: union of national and foreign investors within the national territory for the production of goods, services or both, with lucrative purpose, comprising the joint ventures and international economic association contracts.

(b) authorization: title issued by the Council of Ministers or by the head of the Organization of the Central Administration of the State in which they delegate, enabling to carry out any of the forms of foreign investment provided for in this law.

(c) foreign capital: capital from abroad, as well as the part of dividends or profits belonging to foreign investors that are reinvested within the meaning of this law.

(d) upper management positions: positions of members of the organs of direction and management of the joint venture and the company fully foreign capital, as well as the representatives of the parties to the contracts of international economic association.

(e) administrative concession: enabling degree awarded, on a temporary basis, the Council of Ministers for the management of a public service, the making of a public work or exploitation of a public property, under the terms and conditions established.

(f) international economic association agreement: agreement between one or more domestic investors and one or more foreign investors to carry out acts of an international economic association without being legal person other than the parties.

(g) fully foreign capital enterprise: commercial enterprise with foreign capital without the concurrence of any national investor or natural person with foreign capital.

(h) joint venture: Cuban trading company that takes the form of joint-stock company by shares involving shareholders as one or more domestic investors and one or more investors foreigners.

(i) employer: Cuban entity empowered to arrange a joint venture with legal personality or fully foreign capital, a contract which provide at the request of this necessary workers, who arranged their employment contracts with that entity.

j) assets: wages, income and other remunerations, as well as increases, compensations or other additional payments received the Cuban workers and foreigners, with the exception of those coming from the bottom of stimulating economic, if it exists.

(k) foreign investment: contribution made by foreign investors in any of the manner laid down in the law, involving in the period by which it is authorized, risk-taking in business, the expectation of obtaining benefits and a 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 completely foreign capital enterprise or listed as part an international economic association contract.

(m) National Investor: legal person of Cuban nationality, residing in the national territory, participating as a shareholder in a joint venture, or part at an international economic association contract.

n) special development zone: zone in which a regime and special policies, with the aim of promoting sustainable economic development through the attraction of foreign investment, technological innovation and industrial concentration, with a view to increasing exports, effective import substitution and the generation of new sources of employment, in a constant articulation with the domestic economy are established.

 

Chapter III of the guarantees to the investors article 3.-the Cuban State guarantees that the benefits granted to foreign investors and their investments are kept throughout the period that have been granted.

Article 4.1.-Foreign investment within the national territory enjoy full protection and legal certainty and may not be expropriated, unless such action is running for reasons of public utility or social interest previously declared by the Council of Ministers, in accordance with the provisions of the Constitution, international treaties signed by the Republic of Cuba in investment and legislation with due compensation for their market value established by mutual agreement, payable in freely convertible currency.

2. of not be reached agreement on the commercial value, price fixing is carried out by an organization of international prestige in the valuation of businesses, authorized by the Ministry of finance and prices and hired for that purpose by agreement of the parties involved in the process of expropriation. There is no agreement between them with respect to the selection of the concerned organization, at its option, a draw will be held to determine it or attend the judicial.

Article 5.-Foreign investments are protected in the country, against claims by third parties which comply with law or extra-territorial laws of other States, as application to Cuban laws and having the Cuban courts.


Article 6.1.-The term of the authorization granted for the development of the operations of a joint venture, of the parties to a contract of international economic association or fully foreign capital enterprise, can be extended by the authority that granted it, whenever requested by the interested parties before the expiration of the time limit.

2. of not extended the term to maturity, will proceed to the liquidation of the joint venture contract of international economic association or fully foreign capital enterprise, according to what was agreed in the constituent documents and the provisions of the legislation in force. That apply to the foreign investor, will be paid in freely convertible currency, unless otherwise expressly agreed.

Article 7.1.-The foreign investor part in an international economic association may, after agreement of the parties, sell or transmit in any other way to the State, to a third party or parties to the Association, prior authorization, total or partially, their rights in it, receiving freely convertible currency the price equivalent, unless expressly otherwise agreed.

2. the foreign investor in a completely foreign capital enterprise may, sold or transmitted in any other way, to the State or to a third party, permission, rights in it, totally or partially, receiving in freely convertible currency equivalent price, unless otherwise expressly agreed.

Article 8.-The amount corresponding to receive the foreign investor in the cases referred to in articles 6 and 7 of this Act is determined by agreement between the parties. If necessary to attend a third to set the amount at any time during the process, you select an organization of international prestige in the valuation of businesses, authorized by the Ministry of finance and prices.

Article 9.1.-the State guarantees foreign investors the free transfer abroad in freely convertible currency, without payment of taxes or other charge related to such transfer,: a) dividends or benefits obtained from the exploitation of the investment; and (b) amounts that shall be the cases referred to in articles 4, 6 and 7 of this Act.

2 natural foreign persons who provide their services to a joint venture, the parties in any other form of international economic association or to a foreign capital enterprise completely, provided that they are not permanent residents in the Republic of Cuba, have the right to transfer abroad the assets received in the amount and in accordance with other regulations issued by the Central Bank of Cuba.

Article 10.-The joint ventures and domestic investors and foreign parties to international economic association contracts, are subject to the special tax regime that has this law, until the expiry of the period which were authorized.

 

Chapter IV of the sectors recipients of investments foreign and of the portfolio of opportunities article 11.1.-foreign investment may be authorized in all sectors, with the exception of health and education services to the population and the armed institutions, except in their enterprise systems.

2. the Council of Ministers approves foreign to promote investment opportunities and General and sectoral policies for foreign investment, which are published in the portfolio of opportunities of investment by the Ministry of foreign trade and foreign investment.

3 bodies, bodies of the Central Administration of the State and national sponsors of foreign investment have an obligation, in accordance with the policies adopted, identify and submit to the Ministry of foreign trade and foreign investment proposals for business with foreign investment.

4. the Minister of foreign trade and foreign investment reports annually to the Council of Ministers State of formation and updating of the portfolio of opportunities by bodies, bodies of the Central Administration of the State and national sponsors of foreign investment.

 

Chapter V of the investments foreign section first of forms of foreign investment article 12.-foreign investment defined in this law, can be manifested as: to) direct investment, in which the foreign investor participates as a shareholder in a joint venture or fully foreign capital contributions in international economic partnership agreements, participating effectively in control of the business; and (b) investment in shares or other securities, public or private, that do not have the status of direct investment.

Article 13.1-foreign investment adopts one of the following methods: to) joint venture;

(b) international economic partnership agreement; or (c) fully foreign capital enterprise.

2. as international economic association contracts are classified, among others, risk for non-renewable natural resources exploration, construction, farming, hotel, productive management or contracts of services and contracts for the provision of professional services.

 

SECOND section of the mixed company article 14.1.-the joint venture involves the formation of a legal person other than the parties, takes the form of a company limited by shares and is the current legislation applicable.

2. the proportions of equity that should bring domestic investors and foreign investors, are agreed by members and set out in the authorization.

3. the association agreement is the agreement between partners and contains funda-mental covenants for the conduction of business seeking to develop.

4. the establishment of a joint venture requires the form of deed as prerequisite for its validity and the same incorporate the bylaws and the authorization and the Association Agreement are attached.

5. the bylaws include provisions relating to the organisation and operation of the society.

6. the joint venture acquires legal personality when it is registered in the commercial register.

7 created a joint venture, can change the shareholders, by agreement between them, prior approval of the authority which granted the authorisation.

8. the joint ventures can create offices, representations, branches and subsidiaries, both in the country and abroad, as well as have shareholdings in entities abroad.

9. the dissolution and liquidation of the joint venture is governed by provisions in its bylaws, subject to provisions of the legislation in force.  THIRD section of the agreement of international economic association article 15.1.-international economic partnership agreement has, among others, the following characteristics: to) does not imply the establishment of a legal person other than the one of their parties;

b) can be designed to perform any activity contained in the authorization;

(c) the parties are free to provide all pacts and clauses which understand to suit their interests, provided that does not infringe the authorized object, the conditions of the authorisation or the legislation in force; and (d) each Contracting Party makes contributions different, constituting an accumulation of shares of which are owners at all times and but not come to constitute a capital, is you can get to form a common fund, provided that the portion of property of each of them are determined.

2. in contracts of international economic association whose object is the hotel, productive administration or services or the provision of professional services, do not accumulate shareholdings or establishing a common fund and have the characteristics described in paragraphs 3 and 4 of this article.

3 international hotel, productive management economic association or service contracts as targets achieve better services customer or the production with highest quality, benefit with the use of an internationally recognized brand and advertising, as well as international marketing and promotion of the foreign investor. They have among others, the following characteristics: a) the foreign investor acts on behalf and in representation of the national investor, with respect to the contract management;

(b) not shared utilities; and (c) the payment to the foreign investor is conditioned to its management results.

4.-International Economic Association for the provision of professional services contracts, among others, the following characteristics: a) subscribe with internationally renowned consulting foreign companies; and (b) are intended to provide joint services of auditing, accounting consultancy, be-vices of appraisals and corporate finance, organizational reengineering, marketing and business management intermediation of insurance.

5. the international economic association contract requires to be valid the form of deed and enters into force at the moment of its registration in the register.


6 awarded a contract of international economic association cannot change its parts, except by agreement among them and with the approval of the authority which granted the authorisation.

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

 

FOURTH section of the company's fully foreign capital article 16.1.-fully foreign capital enterprise, the foreign investor exerts the same direction, enjoys all the rights and is responsible for all the obligations laid down in the authorisation.

2.-the foreign investor in companies fully foreign capital, upon registration in the commercial register, can be established within the national territory: to) as a person natural, acting on its own;

(b) as a legal entity, constituting a Cuban subsidiary of the foreign entity of which he is owner, by writing public, in the form of joint-stock company by shares; or (c) as a legal person, establishing a branch of a foreign entity.

3 fully foreign capital companies incorporated as a subsidiary can create offices, representations, branches and subsidiaries, both in the country and abroad, as well as have shareholdings in entities abroad.

4. the dissolution and liquidation of the company of entirely foreign in the form of subsidiary Cuban capital, is governed by provisions in its bylaws, subject to provisions of the legislation in force.

5. the completion of the activities authorised natural person and the branch of foreign company is governed by provisions in the authorization and what effect is established in the current legislation.

 

Chapter VI of the investment in property real estate article 17.1.-in accordance with the rules laid down in this law, can make investments in real estate and get your property or other real rights.

2.-investments in immovable property referred to in the preceding paragraph may be a: to) homes and buildings, dedicated to home address or for tourist purposes;

(b) housing or offices of foreign legal entities; or (c) real estate development for tourist exploitation.

 

Chapter VII of the contributions and your valuation article 18.1.-for the purposes of this Act are considered contributions as follows: to) cash, which in the case of foreign investors it is in freely convertible currency;

(b) machinery, equipment or other tangible property;

(c) intellectual property rights and other rights in intangibles;

(d) right of ownership of movable and immovable property and other rights in rem over them, including the usufruct and surface; (and e) other assets and rights.

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

2. transmission in favour of domestic investors of ownership or other real rights in assets of State-owned, so that they are provided by those, is carried out under the principles established in the Constitution and prior certification of the Ministry of finance and prices, heard the opinion of the organ, agency or entity corresponding and with the approval of the Council of Ministers or its Executive Committee , as appropriate.

In regards to the contributions of intellectual property rights and other rights in intangible assets, you will be subject to the provisions of the legislation that regulates this matter.

3. the monetary contributions in freely convertible currency are priced at their value on the international market and the effects of change in Cuban pesos, the rates of change of the Central Bank of Cuba are applied. The freely convertible currency that constitutes a contribution of foreign capital, entering the country through a banking institution authorized to perform operations on the national territory and is deposited in this according to the regulations in this matter.

4. the contributions of the foreign part that are not cash contributions, which are intended for the share capital of joint ventures, fully foreign-funded enterprises or which constitute contributions in international economic partnership agreements, are valued through methods that freely agree investors provided that they are the generally accepted by international valuation standards , proving its value by the corresponding expert certificate issued by entities that have authorization from the Ministry of finance and prices and are transcribed in the public deed granted.

 

Chapter VIII of the negotiation and approval by the investment foreign article 19.1.-for the creation of an international economic association, the national investor should negotiate with the foreign investor every aspect of the investment, including its economic feasibility, the contributions of the respective, as appropriate, the form of address and administration that has this Association, as well as legal documents for their registration.

2. If it were a fully foreign owned company, the Ministry of foreign trade and foreign investment indicates to the investor, the Cuban entity responsible for the branch, sub-branch or economic activity which aims to make its investment, which must analyze their proposal and obtain the written approval.

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

Article 21.1.-approval for foreign investments in the national territory is granted according to the sector, type and characteristics of foreign investment, by the following organs of the State: to) the Council of State;

(b) the Council of Ministers; and (c) the head of the Central Administration of the State body authorized to do so.

2.-the Council of State approves foreign investment, what ever its modality, in the following cases: to) when you explore or exploit non-renewable natural resources, except under cover of contracts of international economic partnership at risk that are approved and authorized according to paragraph 3 subparagraph d) of this article; and (b) when made for the management of public services, such as transport, communications, water, electricity, the making of a public work or exploitation of a public property.

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

3.-Council of Ministers approves and dictates of foreign investment authorization, in the case of: to) real estate development;

(b) fully foreign-funded enterprises;

(c) the transmission of State ownership or other real rights over State assets;

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

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

(f) the use of renewable energy sources;

(g) the system business in the sectors of health, education and the armed institutions; and (h) other investments that do not require the approval of the State Council.

4. the Council of Ministers may delegate to heads of agencies of the Central State administration, the Faculty of approving and authorizing investments in cases within its competence and according to their mode or target sectors.

Article 22.1.-For the establishment of a joint venture or Enterprise fully foreign capital, as well as for the holding of an international economic association contract, corresponds to present the application to the Minister of the foreign trade and foreign investment, in accordance with the provisions of the regulation of this law.

2. If the objective of the approved investment is the management of a public service, carrying out a public works or the exploitation of a public property, the Council of Ministers, once approved by the Council of State, gives the corresponding administrative concession, under the terms and conditions established in accordance with the provisions in the legislation.

3. the decision that denies or authorizes foreign investment by the competent authority, is given within the term of sixty calendar days from the date of filing of the application and must be notified to the applicants.

In the case of the forms of foreign investment subject to the approval of Heads of agencies of the Central Administration of the State the decision dictates within a period of forty-five days, counted from the date on which it was admitted.

Article 23.-Modifications to the conditions laid down in the authorisation require approval by the competent authority as established in article 21 of this law.

Article 24.-The conditions laid down in the authorization can be cleared, through the Ministry of foreign trade and foreign investment, at the request of the investors.

 

CHAPTER IX OF THE BANKING SYSTEM


Article 25.1-Ventures, foreign investors and domestic investors parties to contracts of international eco-nomic Association and fully foreign capital enterprises, open accounts in any bank in the national banking system, by means of which carried out the receipts and payments arising from its operations according to the current monetary regime. You can also access services offered by financial institutions established in the country.

2. joint enterprises and domestic investors parts in international economic partnership agreements, prior authorization from the Central Bank of Cuba and in accordance with the regulations, can open and operate accounts in freely convertible currency in banks based overseas. They can also arrange credit operations with foreign financial institutions according to current regulations in this matter.

 

Chapter X of the system of export and import article 26.1.-mixed companies, foreign investors and domestic investors parties to international economic association contracts and fully foreign capital enterprises are entitled, in accordance with the provisions laid down for this purpose, to export and import directly the necessary for their purposes.

2. joint enterprises, parties to contracts of the international economic association and fully foreign capital companies preferably acquire goods and services in the domestic market, offered under the same conditions of quality, price and delivery to the international market.

 

Chapter XI of the regime labor article 27.-the activity of foreign investment met labour and legislation of social security existing in the Republic of Cuba, with the adjustments contained in this law and its regulations.

Article 28.1.-Workers who provide their services in the activities corresponding to foreign investments are usually Cuban or foreign permanent residents in the Republic of Cuba.

2. However, the bodies of management of the joint ventures or fully foreign capital firms or parties to international economic association contracts can decide, that certain top management positions, or some technical jobs, perform at their permanent in the country and in such cases non-resident persons determine the employment to implement regime as well as the rights and obligations of those workers.

3. persons not permanent residents in the country who are hired are subject to the legal provisions of the immigration and alien prevailing in the nation.

Article 29.1.-ventures, parties to contracts of the international economic association and fully foreign capital enterprises may be authorized by the Ministry of foreign trade and foreign investment to create a Fund of economic stimulation for Cuban workers and permanent resident aliens in the Republic of Cuba who provide their services in activities corresponding to foreign investments. Contributions to the Fund of economic stimulation are made from the profits obtained.

2 except the creation of stimulation Fund provided for in the paragraph that precedes, hotel, productive management or services contracts and contracts for the provision of professional services.

Article 30.1.-Permanent resident Cuban or foreign staff in the Republic of Cuba, which provides services in the mixed companies, with the exception of the members of its management body, is hired by an entity authorized by the Ministry of labour and Social Security and employer on the proposal of the Ministry of foreign trade and foreign investment.

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

Only by exception, to grant the authorization, may provide that all persons who provide their services in the joint venture can be hired directly for this and always according to the legal regulations concerning labor recruitment.

2. the Cuban workers or permanent resident aliens in the Republic of Cuba that provide their services to the parties to the contracts of international economic association are hired by the Cuban part, pursuant to the legal regulations concerning labor recruitment.

3. in totally foreign capital enterprises, the Cuban personnel or permanent resident alien in the Republic of Cuba, with the exception of the members of its top organ of management and administration, services under a contract that is party to the company with an employer proposed by the Ministry of foreign trade and foreign investment and authorized by the Ministry of labour and Social Security.

The members of the organs of management and administration of the completely foreign capital enterprise are appointed and will be linked to this work in cases where appropriate.

4. payments to permanent resident Cuban and foreign workers in the Republic of Cuba is made in Cuban pesos.

Article 31.1.-The employer referred to in the previous article, individually hires Cuban and foreign resident permanent workers in the Republic of Cuba, which kept with it their employment relationship in accordance with the legislation in force in the matter.

2 when the joint ventures or fully foreign capital enterprises consider that a particular worker does not meet their demands at work, they can ask the employer to replace it by another. Any labour claim is resolved to the employer 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 approved by foreign investment, by way of exception, be set special labour regulations.

Article 33.-Are recognized in accordance with provisions in the current legislation, the rights of Cuban workers to participate in technological or organizational results in innovations that provide economic, social or environmental benefits.

 

Chapter XII of the special regime of taxation article 34.-the ventures and domestic investors and foreign parties to contracts of the international economic association, in terms of compliance with tax obligations and your rights as a taxpayer shall be governed by the provisions of the regulations on the matter, with the adjustments which are arranged in the following articles.

Article 35.-Are exempt from payment of the tax on personal income, foreign investors, partners in joint ventures or parties to contracts of the international economic association, by revenues from dividends or profits of the business.

Article 36.1.-Tax on utilities, is paid by the joint ventures, domestic investors and foreign parties to international economic association contracts by applying a tax rate of 15 percent on the taxable net profit.

2. are exempt from payment of the tax on utilities to mixed companies and parties to the contracts of economic International Association for a period of eight years from its Constitution. The Council may extend the period of exemption approved.

3. are exempt from payment of the tax on profits, net income or other authorized benefits to reinvest, in cases in which the reinvestment in the country is approved by the competent authority.

4. when if the exploitation of natural resources, renewable or not, the rate of profits tax can be increased by a decision of the Council of Ministers. In this case you can soar up to fifty percent.

Article 37.1-Ventures and domestic investors and foreign parties in contracts of Association international economic pay the sales tax with a bonus of 50% in the tax rate to apply to wholesale sales.

2 are exempt from the payment of this tax to the joint ventures and investors and foreign parties to international economic association contracts, during the first year of operation of the investment.

Article 38.1-Ventures and domestic investors and foreign parties in contracts of Association international economic pay the tax on services with a bonus of 50% in the tax rate to apply.

2 are exempt from the payment of this tax to the joint ventures and investors and foreign parties to international economic association contracts, during the first year of operation of the investment.

Article 39.-Declines payment of the tax for the utilization of the workforce to the joint ventures and domestic investors and foreign parties to international economic association contracts.


Article 40.-The joint ventures and domestic investors and foreign parties in contracts of Association international economic pay taxes by the use or exploitation of the beaches, by shedding approved residuals in watersheds, the use and exploitation of bays, utilization and exploitation of forest resources and wildlife and for the right of use of ground waters , with a bonus of 50% during the period of recovery of the investment.

Article 41.-Investor, in accordance with the rules established in this respect by the Minister of finance and prices declines the customs tax to the joint ventures, domestic investors and foreign parties to contracts of the international economic association, from imports of equipment, machinery and other media during the process.

Article 42.-Are taxable persons of the territorial contribution to local development, the joint ventures, domestic investors and foreign parties to international economic association contracts and fully foreign capital enterprises.

They are exempted from the payment of the territorial contribution to local development, the period of return on investment, joint enterprises, as well as domestic investors and foreign parties to contracts of international eco-nomic Association.

Article 43.1.-Are excluded from the provisions of the preceding articles to domestic investors and foreign parties to contracts of international economic partnership that relate to hotel, productive administration or services and the provision of professional services, which are taxed pursuant to the provisions of the law of the tax system and norms that complement it.

2. foreign investors parties to the contracts referred to in the preceding paragraph are exempt from the sales tax and the tax on services.

Article 44.-Totally foreign capital companies are required during its term of validity, to the payment of taxes in accordance with legislation in force, without prejudice to the benefits of a fiscal nature which are established by the Ministry of finance and prices, provided that it is of interest to the country.

Article 45.-For the purposes of this Act, the General Customs of the Republic may be granted to natural or legal persons referred to in this chapter, special facilities in terms of the formalities and customs regime, in accordance with provisions of the legislation in force.

Article 46.-Payment of taxes and other duties collectable at customs, is according to current legislation in the matter, except that stated the Council of Ministers on the occasion of authorizing investment mode.

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 investment, the recovery of the capital, indications which lay out by the Council of Ministers for the priority sectors of the economy as well as benefits that can bring the national economy You can grant exemptions or partial, temporarily or permanently, or grant other tax benefits in accordance with the provisions of the tax legislation, for any of the modes of foreign investment recognized in this law.

 

Chapter XIII of the reserves and insurance article 48.1-ventures, domestic investors and foreign parties to international economic association contracts and fully foreign capital enterprises, are charged to profits and on a mandatory basis, a reserve to cover contingencies that may occur in their operations.

2. the procedure for the formation, use and settlement of the planned reserve in the previous section, is regulated by the Ministry of finance and prices.

Article 49.-Without prejudice to the reserve referred to in the preceding article, the joint ventures, domestic investors and foreign parties to international economic association contracts and fully foreign capital enterprises, may constitute reserves on a voluntary basis subject to the regulations of the Ministry of finance and prices.

Article 50.1-Ventures, domestic investors and foreign parties in contracts of Association international economic and fully foreign capital companies are required to take the insurance of goods of any kind and the responsibilities. The Cuban insurance companies shall have the right of first option under competitive conditions at the international level.

2. facilities, industrial, tourist, or another class or the grounds, which are assigned leases by State enterprises or other national organizations, are insured by the lessee in favour of the lessor, in accordance with the conditions laid down in the preceding paragraph.

 

Chapter XIV of the regime of registration and information financial article 51.-Las joint ventures, domestic investors and foreign parties to international economic association contracts and equity firms completely foreign before the start of its operations, have thirty calendar days from the date of notification of the authorization for the granting of the necessary notary public documents and within thirty days of this Act they are registered in the commercial register.

Article 52.-Ventures, parties to contracts of the international economic association and fully foreign capital enterprises are subject to the fulfillment of the Cuban financial reporting standards issued by the Ministry of finance and prices.

Article 53.1-The subjects referred to in the previous article, presented to the Ministry of foreign trade and foreign investment operations annual report and any other information that is required, in accordance with the provisions of the regulation of this law.

2. the presentation of the annual report laid out in the preceding paragraph is made with independence of their obligations in informative 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 standards and control of the Plan of the national economy.

 

Chapter XV science, technology, environment and innovation article 54.-the foreign investment is encouraged, authorized and operates in the context of the sustainable development of the country which means that, in all its phases, is will attend carefully the introduction of technology, conservation of the environment and the rational use of natural resources.

Article 55.-The Ministry of foreign trade and foreign investment submits the investment proposals received for consideration by the Ministry of science, technology and environment, which evaluates their suitability from the environmental point of view and decides if it is required the preparation of an environmental impact assessment, as well as the origin of the relevant environmental licensing and the regime of control and inspection , pursuant to the legislation in force.

Article 56.1.-The Ministry of science, technology and environment dictates the measures required to give adequate solution to situations that cause damage, hazards or risks to the environment and the rational use of natural resources.

2. the natural or legal person responsible for the loss or damage is obliged to restore the previous state of the environment and to the corresponding repair or compensation, as the case may be.

Article 57.-The Ministry of the Comercio Exterior and the foreign investment, presents the proposal of investment received, this last consideration by the Ministry of science, technology and environment, assesses its technological feasibility and measures for the protection and management of intellectual property to ensure the technological sovereignty of the country.

Article 58.-Rights over the results achieved in the framework of any of the forms of foreign investment, likely to be protected by way of intellectual property, are governed by what was agreed in the constituent documents in accordance with the legislation in force in this matter.

 

Chapter XVI of the actions of CONTROL article 59.1-patterns of foreign investment are subject to control measures laid down in the legislation in force and are carried out by the Ministry of foreign trade and foreign investment, as well as other organs, bodies of the Central Administration of the State or national governing bodies in different activities with competence to do so.

2.-control actions are intended to assess, among others, compliance with: a) the legal provisions in force; and (b) the conditions approved for the creation or implementation of each business.

CHAPTER XVII OF THE DISPUTE SETTLEMENT REGIME


Article 60.1.-Disputes arising from relationships between the partners of a joint venture or between foreign and domestic investors parties to contracts of international eco-nomic Association or among members of a foreign capital enterprise completely in the form of joint-stock company by shares, are resolved according to what was agreed in the constituent documents, except for the cases provided for in this chapter.

2. same rule applies when conflict occurs between one or more partners and the joint venture or the completely foreign capital to which they belong.

3. conflicts arising due to the inactivity of the governing bodies of the foreign investment manner laid down in the law, as well as of the dissolution or termination and liquidation of these, will be resolved in all cases by the Chamber of the people's Provincial Court that corresponds.

4. the conflicts arising from the relationships between the partners of a joint venture or a foreign capital enterprise completely in the form of a company limited by shares or between domestic and foreign investors parties to contracts of the international economic association, which have been authorized to carry out activities related to natural resources, public services and public works execution they are resolved by the Chamber of the people's Provincial Court that corresponds, except otherwise provided for in the authorization.

The above rule applies when conflict occurs between one or more foreign partners and the joint venture or the completely foreign capital to which they belong.

Article 61.-Disputes about the execution of economic contracts arising between the different categories of foreign investment provided for in the law or among them with Cuban legal or natural persons, can be solved by the Chamber of the people's Provincial Court which correspond, without prejudice to submit to arbitration instances in accordance with Cuban law.

 

Special provisions first: Ventures, domestic investors and foreign parties to international economic association contracts and fully foreign capital companies, are subject to the regulations established in the current legislation in the field of disaster reduction.

Second: The provisions of this Act, its regulations and the complementary norms, are applicable to foreign investment established in special development zones with the adaptations that have special rules which for them handed down and always which is not contrary to its operation. Without limiting the foregoing, the special regimes granted under this Act shall apply to these investments, when it will be most beneficial.

 

TRANSITIONAL provisions first: This law is applicable henceforth international economic associations, existing fully foreign capital companies and those that are in operation to the date of its entry into force.

The benefits granted under cover of the Decree-Law No. 50 "on economic partnership between Cuban and foreign entities", 15 February 1982 and Act No. 77 "law of foreign investment", 5 September 1995, held during the term of validity of the international economic association or fully foreign capital enterprise.

Second: This law applies to foreign investment authorization requests that are in progress at the date of its entry into force.

Third: Supplementary provisions issued by the various bodies of the Central Administration of the State for the better implementation and enforcement of the provisions of the law No. 77, of 5 September 1995, with regard to each one, continue applying in which is not contrary to this Act. The bodies involved, in one period not more than three months from the entry into force of this law, will review the above-mentioned rules and heard the opinion of the Ministry of foreign trade and foreign investment, to harmonize them in accordance with the requirements of this law.

Fourth: Ventures, parties to international economic association contracts and fully foreign capital companies, may be authorized exceptionally by the Council of Ministers, to perform certain receipts and payments in Cuban pesos.

Fifth: To proceed with the payment in Cuban pesos set out in paragraph 4 of article 30 must be obtained previously such amounts with convertible pesos.

Sixth: Payment of taxes and other duties collectable at customs by investors is in convertible pesos, even in those cases in which the amount is expressed in Cuban pesos.

Seventh: Regulated in the provisions of the fourth, fifth and sixth above, remain in force until the monetary unification, is available in the country from which the subjects bound by this law shall be governed by the regulations established for this purpose.

 

FINAL provisions first: The Council of Ministers shall adopt the regulations of this law within the retail days following their approval.

Second: Repealing the law No. 77 "Law of the foreign investment", of 5 September 1995; Decree-Law No. 165 "Of the areas zones and parks industrial", on June 3, 1996; and agreements No. 5279, of 18 October 2004; No. 5290, November 11, 2004; No. 6365, on June 9, 2008, adopted by the Executive Committee of the Council of Ministers and many other legal provisions is contrary to the provisions of this law.

Third: The present law enters into force ninety days following their approval.

Fourth: Published, together with its regulations and other complementary provisions in the Official Gazette of the Republic for their general knowledge.

 

GIVEN in the Chamber of the National Assembly of the Popular power, Palacio de las Convenciones, in the city of Havana, to the 29 days of the month of March 2014.

Juan Esteban Lazo Hernández