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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
Type of document: Law
Date of issue: 05/09/1995
Number of Legal Instrument: Law No 77
Broadcaster: National Assembly of People's Power
Date of entry to the repository: 18/05/2016
Source:
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RICARDO ALARCON DE QUESADA , President of the National Assembly of the 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, at its session of 5 September 1995, corresponding to the Fifth Regular Session of the Fourth Legislature, has approved the following:

AS REGARDS : In today's world, without the existence of the socialist camp, with a global economy that globalizes and strong hegemonic tendencies in the economic, political and military fields, Cuba, in the interests of preserving its conquests and also subjected to a fierce blocking, lacking capital, certain technologies, many times market and needed to restructure its industry, can obtain through foreign investment, on the basis of the strictest respect for independence and sovereignty national, benefits with the introduction of new and advanced technologies, the modernization of their industries, greater productive efficiency, the creation of new jobs, improvement of the quality of products and services offered, and a reduction in costs, increased competitiveness abroad, access to certain markets, They would support the country's efforts in its economic and social development as a whole.

AS FOR: The Constitution of the Republic, as it was reformed in 1992, recognizes, among other forms of property, that of the joint ventures, societies and economic associations that are constituted according to the law and previews, in relation to the property (a) State aid and, in exceptional cases, if this proves useful and necessary for the country, the transfer of economic objectives for its development, partly or wholly owned.

AS REGARDS : The changes that take place in the national economy, aimed at promoting and actively promoting investment of foreign capital in Cuba and expanding the possibilities in terms of forms and areas of investment, among other essential factors, the possibilities of the legal framework offered so far by Decree-Law No. 50, "On Economic Partnership between Cuban and Foreign Entities ", of 15 February 1982.

AS FOR: In order to expand and facilitate the process of foreign investment participation in the national economy, it is appropriate to adopt a new legislation that will provide greater security and guarantee to the foreign investor and allow them to obtain fundamentally and in the light of the country's sustainable development and the recovery of the national economy, financial resources, technologies and new markets in any productive sector and in the service sector where mutual interests are identified.

BY TANT: 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 issue the following:

Law 77

FOREIGN INVESTMENT LAW

CHAPTER I

OF THE OBJECT AND CONTENT

ARTICLE 1. 1. This law aims to promote and encourage foreign investment in the territory of the Republic of Cuba, to carry out lucrative activities that contribute to the strengthening of the economic capacity and the sustainable development of the country, on the basis of respect for national sovereignty and independence and the rational protection and use of natural resources; and to establish, for such purposes, the main legal regulations under which it should be carried out.

  1. The rules contained in this Law include, among other things, the guarantees granted to investors, sectors of the national economy that may receive foreign investments, the forms they may adopt, the different types of contributions, the procedure for their authorisation, the banking, special and labour arrangements for these investments, and the rules on the protection of the environment and the rational use of natural resources.

CHAPTER II

OF THE GLOSSARY

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

  1. (a) International economic association:

Union of one or more national investors and one or more foreign investors within the national territory for the production of goods, the provision of services, or both, for profit in its two modalities, comprising the joint ventures and international economic partnership contracts.

  1. (b) Authorisation:

Document granted by the Executive Committee of the Council of Ministers or by a Government Commission, for the realization of any of the forms of foreign investment provided for in this Law, during a given term.

  1. (c) Foreign capital:

Capital from abroad, as well as the share of profits or dividends belonging to the foreign investor that are reinvested in accordance with this Law.

  1. (d) Senior management charges:

Charges of members of the management and management bodies of the joint venture and of the wholly foreign capital firm, as well as the representatives of the parties to the contracts of international economic association and the staff of the management of the wholly foreign capital companies.

  1. (e) Government Commission:

Commission appointed by the Executive Committee of the Council of Ministers with powers to approve foreign capital investments in their area of competence in accordance with the provisions of this Law.

  1. (f) Administrative assignment:

Unilateral act of the Government of the Republic, for which an entity is granted the right to exploit a public service, a natural resource, or to execute and exploit a public work under the terms and conditions to be established.

  1. (g) International Economic Partnership Agreement:

A pact or agreement between one or more national investors and one or more foreign investors, to jointly carry out acts of an international economic association, although without constituting a legal person other than the parties.

  1. (h) wholly foreign capital undertaking:

Mercantile entity with foreign capital, without the concurrence of any national investor.

  1. (i) Joint undertaking:

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 foreign investors participate as shareholders.

  1. (j) Employer entity:

A Cuban organization with legal personality, entitled to grant a joint venture or wholly foreign capital, a contract through which it will facilitate its application, the workers of different qualifications that it needs, who maintain their employment relationship with that organisation.

  1. (k) Haberes:

Salaries, income and other remuneration, as well as increases, compensations or other additional payments collected by Cuban and foreign workers, with the exception of those from the economic stimulation fund, if this exists.

  1. (l) Foreign investment:

Capital contributions made by foreign investors in any of the forms provided for in this Law.

  1. (m) Foreign investor:

Natural or legal person, with domicile abroad and foreign capital, who becomes a shareholder of a joint venture, or participates in a wholly foreign capital company, or who is a party to the association contracts international economic.

  1. n) National investor:

Company or state entity with legal personality, public limited company or other legal person, of Cuban nationality, with its registered office in the national territory, which becomes a shareholder of a joint venture or is included in the contracts of international economic partnership.

CHAPTER III

FROM GUARANTEES TO INVESTORS

ARTICLE 3. Foreign investments within the national territory enjoy full protection and security, and cannot be expropriated, unless such action is carried out for reasons of public utility or social interest, declared by the Government, in accordance with the with the provisions of the Constitution of the Republic, the current legislation, and the international agreements on the promotion and reciprocal protection of investments signed by Cuba, after compensation in currency freely convertible by its value (i) a trade agreement.

If no agreement is reached, the price is fixed by an organization of recognized international prestige in the business valuation, authorized by the Ministry of Finance and Prices and contracted to the effect by agreement of the parties, or of the foreign investor and the Ministry for Foreign Investment and Economic Collaboration, if the affected was a wholly foreign capital company.

ARTICLE 4. 1. The term of the authorization granted for the development of its operations by a joint venture, by the parties in an international economic association contract, or by the wholly foreign capital company, may be extended by the company itself. the authority which granted it, provided that it is requested by the parties concerned before the end of the fixed term.

  1. If the term is not extended to maturity, the joint venture, the international economic association contract or the wholly foreign capital undertaking shall be wound up, as agreed in the instruments of incorporation and the It will be paid in freely convertible currency, except for the pact expressed to the contrary, provided that the legislation in force, and that which corresponds to the foreign investor, will be paid in freely convertible currency.

ARTICLE 5. Foreign investments are equally protected against third-party claims, which are in accordance with the laws of Cuba and the national courts.

ARTICLE 6. 1. The foreign investor in an international economic association may, at any time, after agreement of the parties, sell or transmit in any other form to the State, or to a third party prior to governmental authorization, its participation or partial in it, receiving the corresponding price in freely convertible currency, except pact expressed to the contrary.

  1. The foreign investor in a wholly foreign capital company may, at any time, sell or transmit in any other form to the State, or to a third party, subject to governmental authorization, its full or partial participation in it, receiving the corresponding price in freely convertible currency, except for the express pact.

ARTICLE 7. The price corresponding to the foreign investor in the cases referred to in Articles 4 and 6 of this Law, is fixed by agreement of both parties, or in default by an organization of recognized international prestige in the business valuation, authorized by the Ministry of Finance and Prices to operate in the national territory and contracted by the parties; or by agreement of the foreign investor in a wholly foreign capital company with the Ministry for Foreign Investment and Economic Collaboration.

ARTICLE 8. 1. The State guarantees to the foreign investor the free transfer abroad, in currency freely convertible, without payment of tax or any other charge related to such transfer, of:

  1. (a) the net profits or dividends obtained by the exploitation of the investment; and
  2. (b) the quantities to be received in the cases referred to in Articles 3, 4 and 6 of this Law.
  3. Foreign nationals who provide their services to a joint venture, to the parties in any other form of international economic association, or to an entirely foreign capital firm, provided that they are not permanent residents in Cuba, have the right to transfer to the outside the assets they receive, within the amount and in accordance with the other regulations issued by the National Bank of Cuba.

ARTICLE 9. Joint ventures and parties to international economic partnership contracts pay the taxes listed in the special scheme provided for in this Law, until the expiry of the term for which they were authorised.

The provisions of the preceding paragraph do not apply to fees, contributions, with the exception of the contribution to social security, and formal duties established in the current legislation, nor to the payment obligations included in the Mining Act. of 21 December 1994, or other legal provisions in the field of natural resources, which are satisfied in the form and amount laid down therein.

CHAPTER IV

OF THE SECTORS ELIGIBLE FOR FOREIGN INVESTMENT

ARTICLE 10. Foreign investments 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 system.

CHAPTER V

OF FOREIGN INVESTMENTS

SECTION FIRST

OF THE MANIFESTATIONS AND FORMS OF FOREIGN INVESTMENT

ARTICLE 11. Investments of foreign capital are considered for the purposes of this Law:

  1. (a) Direct investments, in which the foreign investor effectively participates in the management of a joint venture or wholly foreign capital and those which constitute contributions to them in economic partnership contracts international; and
  2. (b) investments in shares, or in other securities, public or private, which do not have the status of direct investment.

ARTICLE 12. Foreign investments shall take one of the following forms:

  1. (a) Joint Undertaking;
  2. (b) international economic partnership contract; and
  3. (c) wholly foreign capital undertaking.

SECTION 2

OF THE JOINT VENTURE

ARTICLE 13. 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.

  1. The proportions of the social capital to be provided by the foreign investor and the national investor are agreed by both partners and established in the authorization.
  2. The formation of a joint venture requires the form of public deed, and as annexes to that notarial instrument are inserted in the convention of economic association, the statutes by which it will be governed and the authorization.

The economic partnership agreement contains the fundamental agreements between the partners for the conduct and development of the joint venture's operations, as well as for the achievement of its objectives, including those that guarantee participation. from the Cuban side in the administration or co-administration of the company and the relative to the market that is secured for the production or the services of the company; the bases of the system of accounting and the calculation and distribution of the utilities.

The statutes of the joint venture include provisions related to the organization and operation of the company, including those concerning the general meeting of shareholders, their privileges and organization; the required quorum and the requirements that are required for the exercise of the right to vote in the general meeting of shareholders; the structure and the powers of the management and administrative body; the method by which these bodies take their decisions, both at the general meeting of shareholders as in the management and management body, which can be from the simple The majority of the parties to the agreement, the cases of dissolution and the procedure to liquidate the company, as well as other stipulations resulting from the legislation in force in this area, of this Law and of the agreement of the parties.

  1. If, in public writing, the person or persons to be administered by the joint undertaking is not appointed, the first meeting of the general meeting of shareholders may be held and the members of its management body may be appointed and administration, according to the statutes.
  2. Created a joint venture, they cannot change the partners, but by agreement of the parties and with the approval of the authority that granted the authorization.

It is understood as a change of partners, the replacement of a foreigner by another natural or legal person or national by another legal person.

  1. Joint ventures can create offices, representations, branches and subsidiaries, both in the national and foreign territories, as well as having units in entities abroad.
  2. The joint venture acquires legal personality, when it is registered in the Register that it exists in the Chamber of Commerce of the Republic of Cuba.

SECTION III

OF THE CONTRACT OF INTERNATIONAL ECONOMIC ASSOCIATION

ARTICLE 14. 1. The international economic partnership contract has, inter alia, the following characteristics:

  1. (a) does not imply the establishment of a legal person other than that of the contractors;
  2. (b) it may be for the purpose of carrying out any activity authorized to the parties;
  3. c) the contractors are free to stipulate all covenants and clauses that they understand to agree with their interests, provided that they do not infringe the authorized object, the conditions of the authorization or the legislation in force;
  4. (d) each contracting party makes different contributions, constituting an accumulation of units of which they are owners at all times and, although without becoming a social capital, they are able to form a common fund, provided that the ownership portion of each of them is determined.
  5. In the text of the contract, the proportion in which each of the parties pays taxes is stated; and the times of the year in which the profits are distributed between them, after their tax obligations have been met, and the contribution to losses, if these are incurred.
  6. In the contract of international economic association, the party that performs a management act that benefits all, is responsible to third parties for the total, but in the internal relationship, each one is responsible in the measure or in the proportion provided for in the contract.
  7. A contract of international economic association cannot be changed by the members, but by agreement of the parties and with the approval of the authority that granted the authorization.
  8. The contract of international economic association requires to be granted the form of public deed and enters into force at the time of its registration in the Register that on these activities exists in the Chamber of Commerce of the Republic of Cuba.

SECTION 4

FROM THE WHOLLY FOREIGN CAPITAL FIRM

ARTICLE 15. 1. In the wholly foreign capital company, the foreign investor exercises the management of the same, enjoys all the rights and responds to all the obligations prescribed in the authorization.

  1. The foreign investor in foreign capital companies can act as a natural or legal person within the Cuban national territory:
  2. a) Creating a Cuban subsidiary of the foreign entity of which it owns, in the form of an anonymous company for nominative shares and registering it in the Registry of the Chamber of Commerce of the Republic of Cuba; or
  3. b) by registering with the Registry of the Chamber of Commerce of the Republic of Cuba and acting for itself.

CHAPTER VI

OF INVESTMENTS IN REAL ESTATE

ARTICLE 16. 1. Under this Law, you can make investments in real estate and acquire your property or other real rights.

  1. Investments in real estate as referred to in the preceding paragraph may be used for:
  2. (a) Housing and buildings, dedicated to particular residence or for tourism purposes, of natural persons not permanent residents in Cuba;
  3. (b) houses or offices of foreign legal persons;
  4. (c) real estate developments for tourism purposes.

ARTICLE 17. Investments which consist of the acquisition of buildings which are themselves a business activity are considered as direct investments.

ARTICLE 18. The conditions and terms under which the acquisition and transfer of the buildings referred to in Article 16 of this Law are to be performed are determined in the authorization and are in accordance with the current legislation.

CHAPTER VII

OF THE CONTRIBUTIONS AND THEIR VALUATION

ARTICLE 19. 1. For the purposes of this Law, the following are contributions:

  1. (a) Currency freely convertible;
  2. (b) machinery, equipment or other physical or tangible goods;
  3. (c) intellectual property rights and other rights to intangible assets;
  4. (d) the right to property on movable and immovable property, and other real rights on such property, including those for use and land; and
  5. (e) other goods and rights.

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

  1. The transmission in favor of the national investors of the property or 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 prior to the certification of the Ministry of Finance and Prices, heard the opinion of the corresponding body and with the approval of the Executive Committee of the Council of Ministers.

With regard to the contributions of intellectual property rights or other rights to intangible assets, the provisions of the current legislation on this matter will be included.

  1. The freely convertible currency contributions are valued in the international market; and for the purposes of the change in national currency, for accounting purposes, they are adjusted to the exchange rates of the National Bank of Cuba. The freely convertible currency, which constitutes a foreign capital contribution, enters the country through a bank authorized to carry out operations in the national territory.
  2. Contributions which are not freely convertible currency, other than those consisting of intellectual property rights and other rights on intangible assets, which are intended for the social capital of joint ventures, or which constitute contributions in contracts of international economic association, are valued through the methods that the investors freely agree, and it can be arranged that their value is credited with the corresponding expert certificates extended by entities that are authorized by the Ministry of Finance and Prices, and are transcribed in the public writing to be granted.
  3. The valuation of contributions to foreign capital companies that are not freely convertible currency, except those consisting of intellectual property rights and other rights on intangible assets, are always made by the use of expert certificates issued by entities holding the Ministry of Finance and Prices.
  4. The contributions consisting of intellectual property rights and other rights on intangible assets are valued by the methods freely agreed by national and foreign investors and by the foreign investor with the Ministry for Foreign Investment and Economic Cooperation, in the case of contributions to an entirely foreign capital company.

CHAPTER VIII

OF THE NEGOTIATION AND AUTHORISATION OF FOREIGN INVESTMENT

ARTICLE 20. 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, the form of management and the administration of that association, as well as the legal documents for its formalization.

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

Article 21. 1. The authorization to make foreign investments in the national territory is granted by the Executive Committee of the Council of Ministers, or by a Commission designated by the Council.

  1. The Executive Committee of the Council of Ministers shall be exclusive of the authorization of foreign investment, in the case of any of the sectors listed below or having the following characteristics:
  2. a) When the sum of the contributions of foreign and domestic investors is higher than the currency equivalent freely convertible to ten (10) million dollars of the United States of America;
  3. (b) wholly foreign capital undertakings;
  4. (c) those used to exploit public services such as transport, communications, aqueducts, electricity, or to build and operate a public work.
  5. (d) where a foreign company is involved with the capital participation of a foreign state;
  6. (e) where it includes the exploitation of a natural resource, in accordance with the provisions of the legislation on the protection of the environment and the rational use of natural resources;
  7. (f) those comprising the transfer of State ownership or a real right owned by the State; and
  8. (g) the business system of the armed institutions.
  9. It is for the Government Commission to authorise foreign investments not mentioned in the previous paragraph.

ARTICLE 22. The foreign investor who intends to obtain authorization for a wholly foreign capital company, presents together with the corresponding Cuban entity, the application to the Ministry for Foreign Investment and Collaboration. Economic.

ARTICLE 23. 1. For the formation of a joint venture or the conclusion of an international economic association contract, the application must be submitted to the Ministry for Foreign Investment and Economic Cooperation, jointly signed by the foreign investor and the national investor.

  1. The following documents are accompanied by the investment application submitted:
  2. (a) For the establishment of joint ventures and the award of contracts of international economic association, projects of "economic association agreement", of the "statutes" of the joint venture that is intended to constitute or of the "contract" that will be granted, as well as an economic feasibility study, in both cases.
  3. (b) in respect of the foreign investor, documentation certifying his identity and solvency; and, in addition, the powers that prove his legitimate representation if he concurs with the character of a legal person.
  4. c) As to the national investor, if it is a company or state entity, the acceptance expresses in written form, extended by the maximum authority of the branch, subbranch or activity of the economy in which the foreign investment is made; it is a commercial or civil society of service, totally Cuban capital, it must be expressly authorized by agreement of its general meeting of shareholders, which grants specific powers, for the purposes of signing the documents corresponding to the foreign investor.
  5. (d) When the foreign investor proposes the formation of a wholly foreign capital company, an acceptance extended by the maximum authority of the branch, sub-branch or economic activity in which it intends to make its investment, the statutes, economic feasibility study, documentation showing the identity and solvency of the foreign investor, and also, being a legal person, the powers that accredit their legitimate representation for the purposes of the investment in question.
  6. (e) The documents accompanying the investment application shall be duly legalized, where appropriate.
  7. For the Ministry for Foreign Investment and Economic Cooperation to admit the application, it must have been presented with the formalities described in this article.
  8. The application by the Ministry for Foreign Investment and Economic Cooperation is accepted, as it is submitted as a consultation to all other bodies and institutions, for the purpose of obtaining its opinion on the matter.
  9. Having completed the previous formalities, the Ministry for Foreign Investment and Economic Cooperation raises the Executive Committee of the Council of Ministers or the Government Commission, if any, the dossier formed to the effect with its evaluation, for the relevant decision is taken.
  10. The decision denying or authorizing foreign investment, is dictated within the term of sixty (60) calendar days, counted from the filing date of the application and must be notified to the applicants.

ARTICLE 24. 1. The conditions to which it is subject, the objective and the term of the investment form in question are entered in the authorisation.

  1. If the objective of the approved investment is the exploitation of a public service, or of a natural resource, or the exploitation and execution of a public work, the Executive Committee of the Council of Ministers may grant the corresponding concession. administrative, under the terms and conditions you establish.

ARTICLE 25. The conditions laid down in the authorization may be clarified through the Ministry for Foreign Investment and Economic Cooperation, at the request of the parties.

CHAPTER IX

OF THE BANKING SYSTEM

ARTICLE 26. 1. Joint ventures, foreign investors and domestic investors parties to international economic partnership contracts, jointly or indifferently, and wholly foreign capital companies, open accounts in currency freely. convertible into any bank of the National Banking System, through which they make the charges and payments that generate their operations.

  1. Joint ventures and national investors parties to international economic partnership contracts, may open and operate accounts in currency freely convertible into foreign-based banks, subject to the authorization of the National Bank of Cuba.

ARTICLE 27. Joint ventures, parties to international economic partnership contracts and wholly foreign capital companies, may be exceptionally authorized by the Executive Board of the Council of Ministers to carry out certain charges and payments in non-convertible national currency.

ARTICLE 28. Joint ventures, foreign investors and domestic investors parties in international economic partnership contracts, and foreign capital companies, can arrange loans in foreign currency:

  1. a) With a bank of the National Banking System or financial institution approved by the National Bank of Cuba;
  2. (b) with banks or financial institutions abroad, in accordance with the legal regulations in force on this subject.

CHAPTER X

OF THE EXPORT AND IMPORT ARRANGEMENTS

ARTICLE 29. Joint ventures, domestic and foreign investors parties in contracts of international economic association, and wholly foreign capital companies, are entitled, in accordance with the provisions laid down for such purposes, to to export its production directly, and to import, also directly, what is necessary for its purposes.

CHAPTER XI

OF THE WORK SYSTEM

ARTICLE 30. In the activity of foreign investments, the labor and social security legislation in force in Cuba is complied with, with the appropriate adjustments in this Law.

ARTICLE 31. 1. The workers who provide their services in the activities corresponding to foreign investments will be, as a general rule, Cubans or foreign permanent residents in Cuba.

  1. However, the management and management bodies of joint ventures or wholly foreign capital companies or the parties to the contracts of international economic association may decide that certain management charges (a) higher or some technical jobs are carried out by non-permanent residents in the country and, in such cases, determine the employment arrangements to be applied and the rights and obligations of those workers.

Non-permanent residents in the country who are employed are subject to the immigration and immigration provisions in force in the country.

ARTICLE 32. 1. The joint ventures, the parties in the contracts of international economic association and the companies of foreign capital, can be authorized to create a fund of economic stimulation for the Cuban and foreign workers permanent residents in Cuba who provide their services in activities corresponding to foreign investments.

  1. The contributions to the economic stimulation fund are made from the profits obtained. The amount of these contributions is agreed by the joint ventures, foreign investors and domestic investors parties in international economic partnership contracts, and by the foreign capital companies with the Ministry for Foreign Investment and Economic Collaboration.

ARTICLE 33. 1. The Cuban or foreign permanent resident in Cuba who provides services in the joint ventures, with the exception of the members of his management and administration body, is hired by a employing entity proposed by the Ministry of Foreign Affairs. for Foreign Investment and Economic Cooperation 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 will be linked to the joint venture.

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

  1. The persons who provide their services to the parties in the contracts of international economic association are hired by the Cuban party, in accordance with the legal provisions in force in the field of employment contracts.
  2. In all foreign capital companies, the services of Cuban workers or foreign permanent residents in Cuba, with the exception of the members of their senior management and management body, are provided through a contract. The Ministry of Foreign Investment and Economic Cooperation, which is authorized by the Ministry of Labor and Social Security, is providing the company with a business entity proposed by the Ministry for Foreign Investment and Economic Cooperation.

The members of the management and management bodies of the wholly foreign capital firm are appointed by the company and are linked to the company.

  1. The payments to Cuban and foreign permanent resident in Cuba are made in national currency, which must be obtained in advance with convertible currency, outside the case of the exception mentioned in Article 27 of this Law.

ARTICLE 34. 1. The employing entity referred to in the previous Article, individually hires Cuban and foreign permanent resident workers, who maintain their employment relationship with it. That employer pays those workers their assets.

  1. Where joint ventures or wholly foreign capital companies consider that a particular worker does not meet their requirements at work, they may apply to the employer to replace them with another. Any claim for employment is settled in the employer, which pays the worker the compensation to which he is entitled, fixed by the competent authorities, in the case of the joint venture or the undertaking of the Foreign capital, which is provided to the employer by the payment institution, in accordance with the procedure laid down and must comply with the legislation in force.

ARTICLE 35. Notwithstanding the provisions of the preceding articles of this Chapter, in the authorization that approves foreign investment, special labor regulations may be established by way of exception.

ARTICLE 36. Technological results consisting of innovations and other intangible assets that are the object of intellectual property protection achieved in the framework of an international economic association or by the Cuban workers of a capital company They are governed by the provisions of the legislation in force in this field.

ARTICLE 37. The Ministry of Labour and Social Security is empowered to make any additional provisions necessary for the best application of what is available in this Chapter, in particular in matters of employment and employment. discipline of work.

CHAPTER XII

OF THE SPECIAL TAX AND TARIFF REGIME

ARTICLE 38. Joint ventures, foreign investors and domestic investors parties to international economic partnership contracts are subject to the payment of the following tax obligations:

  1. (a) Income tax;
  2. (b) tax on the use of the labour force and the contribution to social security;
  3. (c) duties and other duties levied at customs;
  4. (d) land transport tax, which taxes the ownership or possession of motor vehicles of land transport; and
  5. (e) tax on documents, which includes fees and charges for the application, collection or renewal of certain documents.

ARTICLE 39. For the purposes of this Law, the payment of taxes by natural and legal persons mentioned in the previous Article has the following benefits:

  1. a) The Tax on Utilities, is paid by applying a tax rate of thirty percent (30%) on the net taxable income. In cases that are considered to be appropriate in the interest of the nation, the Executive Committee of the Council of Ministers may exonerate in part or in part the payment of net income tax to be reinvested in the country.
  2. (b) Where the exploitation of natural resources, whether renewable or not, is present, the tax rate of the Utility Tax may be increased by decision of the Executive Committee of the Council of Ministers. In this case, the tax rate can be raised to 50% (50%).
  3. (c) As regards the tax on the use of the labour force and the contribution to social security, the following is established:
  4. The use of the labour force gives a bonus on the tax rate in force, with the rate of 11% being applied.
  5. The tax rate of 14% applies for the contribution to social security.
  6. The rates of duty expressed in the two previous acts are applied on all the wages and other income which the employees are perceived to receive, except in the case of economic stimulation.
  7. (d) Foreign investors in joint ventures or parties in international economic association contracts are exempt from the payment of the Personal Income Tax obtained from the profits of the business.

ARTICLE 40. The foreign capital companies are obliged for the entire duration of their operations to pay the taxes, in accordance with the legislation of the current tax system.

ARTICLE 41. For the purposes of this Law, the natural and legal persons referred to in this Chapter may be granted special facilities as regards the customs procedure, in accordance with the provisions of the legislation in force.

ARTICLE 42. The payment of taxes, duties and other duties collected in customs, is carried out in freely convertible currency, even in those cases where the amount is expressed in national currency, except for the cases of exception established by the Executive Committee of the Council of Ministers.

ARTICLE 43. The Ministry of Finance and Prices, heard the look of the Ministry for Foreign Investment and Economic Collaboration and taking into account the benefits and the amount of the investment, the recovery of capital, and the indications that The Executive Committee of the Council of Ministers for the sectors of the economy prioritized and the benefits that it can report to the national economy, can grant total or partial exemptions, in a temporary way, or grant the benefits corresponding to the special tax system.

ARTICLE 44. Joint ventures, the parties to the contracts of international economic association and the wholly foreign capital companies, are subject to the "Standards of Valuation of the Most Significant Assets and Liabilities" dictated by the Ministry of Finance and Prices. Such persons may freely determine the accounting system which is most appropriate to them, provided that the system adopted complies with the universally accepted accounting principles and satisfies the tax requirements.

CHAPTER XIII

OF THE RESERVES AND INSURANCE

ARTICLE 45. 1. Joint ventures, foreign and domestic investors in international economic partnership contracts, and wholly foreign capital companies, constitute a reserve for their profits and on a compulsory basis. cover any contingencies that may arise in their operations.

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

ARTICLE 46. Without prejudice to the reserve referred to in the previous Article, joint ventures, foreign and domestic investors in international economic partnership contracts, and wholly foreign capital enterprises, may constitute other reserves on a voluntary basis, subject to the regulations of the Ministry of Finance and Prices.

ARTICLE 47. 1. Joint ventures, foreign and domestic investors in international economic partnership contracts, and foreign capital companies, should contract with companies authorized by the Ministry of Finance and Prices to operate in the country, the relevant insurance on property, property, operations, and any other activities or risks that are necessary, on the basis of premiums and other competitive contractual conditions at international level.

  1. 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 SYSTEM OF REGISTRATION AND FINANCIAL INFORMATION

ARTICLE 48. Joint ventures, domestic and foreign investors parties to international economic partnership contracts, and foreign capital companies, prior to the commencement of their operations, are entered in the Register which These activities exist in the Chamber of Commerce of the Republic of Cuba, in a term of thirty (30) calendar days counted from the date of authorization.

ARTICLE 49. 1. The natural and legal persons referred to in this Chapter, present to the Ministry for Foreign Investment and Economic Cooperation, within the ninety (90) calendar days following the date of the end of their fiscal year, a Annual report of its operations in this period.

  1. The presentation by natural and legal persons included in this Chapter of the Annual Report, is done independently of its information obligations for the Ministry of Finance and Prices, the tax administration and other statistical data to be established.

CHAPTER XV

OF THE REGIME OF FREE ZONES AND INDUSTRIAL PARKS

ARTICLE 50. In order to stimulate exports and international trade, the Executive Committee of the Council of Ministers may authorize the establishment of Free Zones and Industrial Parks, in demarcated areas of the national territory.

ARTICLE 51. 1. These are considered to be Free Zones, those in which the Executive Committee of the Council of Ministers may apply a special regime in the area of customs, exchange, taxation, labor, immigration, public order, investment of capital and foreign trade, and in which foreign investors can participate to carry out financial, import, export, storage, productive activities, or re-export operations.

  1. They are considered Industrial Parks, those in which it can be applied by decision of the Executive Committee of the Council of Ministers, a special regime in customs, tax, labor, investment of capital and foreign trade, for develop productive activities with foreign capital participation.

ARTICLE 52. In foreign investment authorizations, if appropriate, the special facilities and incentives offered to the foreign investor in the Free Zones and Industrial Parks are included.

ARTICLE 53. The establishment and the rules governing the operation of the Free Zones and the Industrial Parks will be regulated by the special legislation dictated to this effect.

CHAPTER XVI

PROTECTION OF THE ENVIRONMENT

ARTICLE 54. Foreign investment is conceived and stimulated in the context of the country's sustainable development, which implies that during its implementation it will carefully address the conservation of the environment and the rational use of natural resources.

ARTICLE 55. The Ministry for Foreign Investment and Economic Cooperation, in the cases from the Ministry of Science, Technology and the Environment, submits the investment proposals it receives to the Ministry of Science, Technology and Environment. the environmental point of view and decides whether an Environmental Impact Assessment is required, as well as the source of the relevant Environmental Licensing and the control and inspection regime in accordance with the provisions of the existing legislation.

ARTICLE 56. 1. The Ministry of Science, Technology and the Environment gives the necessary measures to provide an adequate solution to the situations that cause damage, hazards or risks to the environment and the rational use of natural resources.

  1. The natural or legal person responsible for the damage or injury is obliged to restore the above environmental situation, to repair the material damage and to compensate for the damages.

CHAPTER XVII

OF THE DISPUTE SETTLEMENT SYSTEM

ARTICLE 57. 1. Conflicts arising from relations between the partners of a joint venture, or between foreign investors and domestic investors parties to contracts of international economic association or between the partners of an enterprise of Foreign capital in the form of an anonymous company for nominative shares, is settled as agreed in the instruments of incorporation.

  1. The same rule applies when the conflict occurs between one or more foreign partners and the joint venture or the wholly foreign capital company to which the latter or those belong.

ARTICLE 58. Disputes concerning the execution of economic contracts arising between joint ventures, foreign investors and domestic investors parties in contracts of international economic association and capital companies Foreign Minister, with the State-owned enterprises or other national entities, are the powers of the Boards of the Economic Chambers of the People's Courts to establish the Governing Council of the Supreme People's Court.

SPECIAL ARRANGEMENT

UNICA: Joint ventures, domestic and foreign investors parties in contracts of international economic association, and foreign capital companies, are subject to the regulations to be established in the field of protection. Disasters and Natural Disasters.

TRANSITIONAL PROVISIONS

FIRST : This Law applies to joint ventures and other forms of international economic association, existing and in operations to the date of its entry into force. However, the benefits granted under Decree-Law No 50 of 15 February 1982 will remain in force throughout the term of the international economic association.

SECOND: This Law applies to applications for foreign investment authorization that are in the process of processing the date of its entry into force. The Ministry for Foreign Investment and Economic Collaboration, will agree with the applicants how to proceed.

THIRD : The additional provisions laid down by the various bodies of the Central Administration of the State for the best implementation and enforcement of the rules of Decree-Law No. 50 of 15 February 1982, concerning each one, continue to be observed in the absence of any opposition to this law; the said bodies, within a period of not more than three months from the date of entry into force of this Law, shall review those rules and harmonize them in accordance with the provisions of this Law. requirements of this.

FINAL PROVISIONS

FIRST : The Decree-Law No. 50 "On Economic Partnership between Cuban and Foreign Entities" of 15 February 1982, and any other legal provisions, will be repealed. publication in the Official Gazette of the Republic.

SECOND : The Executive Committee of the Council of Ministers and the Agencies of the Central Administration of the State are empowered to dictate how many provisions are necessary for the best fulfillment of what is established by this Law.

DADA In the session hall of the National Assembly of People's Power, Palace of the Conventions, in the city of Havana, five days of the month of September of a thousand nine hundred and ninety-five.