00 establish brazil-binational-companies-brazil- argentina_doc_eb000_prsp_v2

Establish Brazil | R. Peixoto Gomide, 445 - Jardim Paulista, São Paulo, CEP 01409-001- Brazil

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2ed edition 1

Sao Paulo, 2013 2

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TREATY FOR THE ESTABLISHMENT OF THE STATUTE FOR 6

BINATIONAL COMPANIES BRAZIL- ARGENTINA 7

MECOSUL TREATIES 8

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The Government of the Federate Republic of Brazil and The Government of the 11

Republic of Argentina.............................................................................................................. 3 12

Article 1. Definitions ................................................................................................................. 3 13

Article 2, Object ......................................................................................................................... 5 14

Article 3. Legal Form ................................................................................................................. 5 15

Article 4. Funding ...................................................................................................................... 5 16

Article 5. Treatment ................................................................................................................... 7 17

Article 6. Transference’s Abroad ............................................................................................... 7 18

Article 7. Transference of Personnel ......................................................................................... 8 19

Article 8. Procedures .................................................................................................................. 8 20

Article 9. Application Authority .............................................................................................. 10 21

Article 10. Implementation of the Binational Companies Statutes.......................................... 11 22

Article 11. Entrance into force ................................................................................................. 12 23

Article 12. Validity and Denunciation ..................................................................................... 12 24

Article 13. Transitory Disposition ........................................................................................... 12 25

OUTLINE OF THE REGULATION FOR THE BRAZILIAN-ARGENTINEAN 26

BINATIONAL COMPANIES STATUTE ........................................................................... 13 27

Article 1. .................................................................................................................................. 13 28

Article 2. .................................................................................................................................. 13 29

Article 3. .................................................................................................................................. 14 30

Article 4. .................................................................................................................................. 15 31

Article 5. .................................................................................................................................. 16 32

Article 6. .................................................................................................................................. 17 33

Article 7. .................................................................................................................................. 17 34

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Article 8. .................................................................................................................................. 17 35

Article 9. .................................................................................................................................. 18 36

Article 10. ................................................................................................................................ 19 37

Article 11. ................................................................................................................................ 20 38

Article 12. ................................................................................................................................ 20 39

Article 13. ................................................................................................................................ 20 40

Article 14. ................................................................................................................................ 21 41

Article 15. ................................................................................................................................ 21 42

Article 16. ................................................................................................................................ 21 43

Article 17. ................................................................................................................................ 22 44

Article 18. ................................................................................................................................ 22 45

Article 19. ................................................................................................................................ 23 46

Article 20. ................................................................................................................................ 23 47

Article 21. ................................................................................................................................ 23 48

Article 22. ................................................................................................................................ 24 49

Article 23. ................................................................................................................................ 24 50

Article 24. ................................................................................................................................ 25 51

PERMANENT BINATIONAL COMMITTEE FOR THE IMPLEMENTATION AND 52

FOLLOW-UP OF THE STATUTE FOR BRAZILIAN- ARGENTINEAN 53

BINATIONAL COMPANIES .............................................................................................. 25 54

1 THE PURPOSE ............................................................................................................... 25 55

2 THE COMPOSITION ..................................................................................................... 26 56

3 THE COMPETENCIES................................................................................................... 27 57

4 THE MEETINGS............................................................................................................. 28 58

REGULATION OF THE ATTRIBUTIONS AND FUNCTIONS OF THE 59

AUTHORITY FOR THE APPLICATION OF THE STATUTES OF BRAZILIAN-60

ARGENTINEAN BINATIONAL COMPANIES ............................................................... 30 61

THE PURPOSE ....................................................................................................................... 30 62

THE CERTIFICATION........................................................................................................... 32 63

THE TRANSFERENCE OF SHARES AND PARTICIPATION .......................................... 36 64

THE PENALTIES ................................................................................................................... 37 65

THE GENERAL DISPOSITIONS .......................................................................................... 37 66

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Date of Conclusion 1990-06-06 70

The Government of the Federate Republic of Brazil and The 71

Government of the Republic of Argentina 72

CONSIDERING: 73

The integration and economic cooperation process between the Federate 74

Republic of Brazil and the Republic of Argentina started in 1986 with the 75

signature of the Minutes for the Brazilian-Argentinean Economic Integration 76

and Cooperation and the accordance on November 29,1988 of the Integration, 77

Cooperation and Development Treaty consolidated same process; 78

The approval of referred statute by both Congresses on August 16,1989 and its 79

subsequent enforcement; 80

The priority objective to promote the integration and complementation on a 81

company level to assure the success of referred process; 82

HAVE AGREED as follows 83

Article 1. Definitions 84

The State Parties establish the statute which will regulate the companies of 85

Binational character constituted according to it. 86

For the purposes of this statute, a Brazilian-Argentinean binacional company, 87

hereinafter Binational Company, is the one that simultaneously fulfills the 88

following conditions: 89

that at least 80% of the corporate capital and the votes are owned by 90

national investors from the Federate Republic of Brazil and Republic of 91



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Argentina, assuring them the real and effective control of the Binational 92

Company; 93

that the participation of the conjoint of national investors of each of the 94

two countries be of at least, 30% of the company’s corporate capital; and 95

that the conjoint of national investors of each of the two countries is 96

entitled to vote at least one member of each administration organ and 97

one member of the internal fiscalization of the company. 98

Shall be considered national investors: 99

the individuals domiciled in any of the two countries; 100

the legal entities of public law of any of the two countries; and 101

the legal entities of private law of any of the two countries, in which the 102

majority of the corporate capital and of the votes, and the effective 103

administrative and technological control, is hold, directly or indirectly, 104

by the investors indicated in the above letters "a" and "b". 105

The legal entities referred to in letter "a" of paragraph 3 of this Article , 106

independent of having their seat in the Federate Republic of Brazil or in 107

Republic of Argentina shall integrate, for the purposes of letter "b" of 108

paragraph 2 of this Article , the conjoint of national investors of the country to 109

whom their controllers belong. 110

The capital funding of the Investment Fund referred to in Protocol n.7 of the 111

Integration and Cooperation Program between the Federate Republic of Brazil 112

and the Republic of Argentina shall be considered performed by national 113

investors for computation purposes of the participation foreseen in this Article 114

. 115

The investments in Binational companies made by individuals or legal entities 116

not having the characteristics mentioned in paragraph 2 of this Article , shall 117

not be considered as done by national investors, for the purposes of this 118

Statute. 119



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Article 2, Object 120

The object of Binational Companies may be any economic activity permitted in 121

the legislation of the heading country, exception made to the limitations 122

established in constitutional dispositions. 123

Article 3. Legal Form 124

The Binational Companies shall necessarily have their seat in the Federate 125

Republic of Brazil or in the Republic of Argentina, within the legal forms 126

admitted by the legislation of the country chosen to be the head office, and 127

shall aggregate to their denomination or corporate name, the words: 128

"Brazilian-Argentinean Binational Company" or the initials "E.B.B.A" or 129

"E.B.A.B". 130

In case the chosen form is a corporation, the respective shares shall mandatory 131

be nominative and not subject to transference per endorsement. 132

The Binational companies with head offices in one of the two countries, may 133

establish branches, agencies or subsidiaries in the other, following the 134

respective national legislation regarding the objective, form and register. 135

Article 4. Funding 136

The following funding may be made to the capital of the Binational Company: 137

funding in local currency of the origin country of the investor; 138

funding in freely convertible currency; 139

funding in capital goods and equipment of Brazilian and/or Argentinean 140

origin, with no exchange coverage in the receiving country; 141

other funding permitted by the legislation of each country; and 142



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capital goods or equipment originating from third countries, as long as 143

entered in Federate Republic of Brazil or in the Republic of Argentina, 144

up to the signature date of this statute and paid up to the corporate 145

capital up to two years after its entrance into force. From this last date 146

on, the capital goods and equipment originating from third countries 147

shall be subject to the fiscal treatment in force in the Federate Republic 148

of Brazil and in the Republic of Argentina. 149

Upon verification of the accomplishment of the constitutive requirements of 150

the Binational Company, the Application Authority of the heading country 151

shall issue a Provisory Certificate necessarily recording the amount of the 152

corporate capital, the nature and the percentages of the respective funding. 153

Through presentation of the Provisory Certificate indicated in prior paragraph 154

to the other country’s Application Authority, it shall automatically be 155

authorized the transference of the capital funding individualized in referred 156

Certificate 157

Once the corporate capital is paid off, the Application Authority of the heading 158

country shall issue the Definitive Certificate and communicate such act to the 159

Application Authority of the other country. 160

For the effects of disposal in letter "c" of this Article , both Governments shall 161

take the necessary steps for the entrance mentioned funding in their respective 162

territories according to the Binational Trade Agreements, subscribed between 163

the Federate Republic of Brazil and the Republic of Argentina in the ambit of 164

the Latin-American Integration Association (ALADI), to exempt them from any 165

tariffary or non-tariffary restriction ( be it fiscal, administrative, quantitative 166

or other) according to each national legislation applicable in both countries 167

for the entrance or exit of such funding. 168



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Article 5. Treatment 169

The Binational Companies shall have in their operating country, the same 170

treatment established or to be established for the companies with national 171

capital of same Country, even though the majority of the corporate capital 172

belongs to investors of other countries, according to Article I of this Statute, in 173

matters of: 174

internal taxation; 175

access to internal credit; 176

access to incentives or advantages for promotion of national, regional or 177

sectorial promotion; and 178

access to acquisitions and public sector agreements. 179

The goods and services produced by Binational Companies shall profit from 180

priority treatment equivalent to the one of companies with national capital in 181

the implementation by both Governments of bilateral initiatives developed 182

within the context of the integration process and economic cooperation. 183

The treatment foreseen in this Article reaches branches, agencies and 184

subsidiaries of the Binational Companies, being observed when applicable, the 185

dispositions of Article I of this Statute. 186

Article 6. Transference’s Abroad 187

The investors of each of the two countries in a Binational National Company 188

established in the other country, once having paid all due taxes, are entitled to 189

freely transfer the profits resulting from their investment to their respective 190

origin countries, as long as the distribution is proportional among its investors 191

as foreseen in Article I, paragraph 2 of this Statute, and to repatriate its 192

participation in the corporate capital, observing in this last case, the legal 193



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dispositions applicable in each country. The branches, agencies or subsidiaries 194

of the Binational Companies shall be entitled to the same rights with regard to 195

their net profits. 196

Even in cases of difficulties in external payments, the Government of both 197

countries shall not impose restrictions to investors of Binational Companies for 198

the free transference of the net profits to which they are entitled. 199

Article 7. Transference of Personnel 200

Both Governments shall take the necessary measures to facilitate the 201

transference of the personnel employed in both countries of the Binational 202

Companies, including: 203

facilities for the obtention of temporary or definitive authorization permit; and 204

the reciprocal recognition of professional titles. 205

Article 8. Procedures 206

For the obtention of the Temporary Certificate foreseen in this Statute, the 207

investors in Binational Companies shall present to the Application Authority of 208

the head country referred to Article IX, the following documents: 209

1. an agreement stipulating the conditions for Binational Companies 210

constitution and operation, mandatory including following information: 211

objectives and activity programs of the Binational Company; 212

structure of the corporate capital; 213

name, nationality and domicile of the partners; nature and value of 214

respective capital funding of the Binational Company; 215

distribution of functions and administration positions between the 216

investors of each country;. 217



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rules for the distribution of the Binational Company results; 218

rules for the commercial operations between the investors and its 219

Binational Company; 220

preference rules for sale of shares and corporate capital increase cases; 221

rules on the liquidation of Binational Companies; and 222

rules for the solution of controversies, including the election of 223

jurisdiction for such effects. 224

225

2. copy of the project of Bylaws or of the social contract for the 226

constitution of the Binational Company. 227

The Application Authority of the constitution country of the Binational 228

Company, shall issue the Definitive Certificate referred to in Article IV of 229

this Statute, whereby the interested parties shall present the following 230

documents: 231

inscription receipt of the company’s constitution acts with competent 232

register; 233

receipt of corporate capital integralization; 234

copy of the statute, agreement or social contract, or equivalent 235

documents; and 236

sworn declaration of the directors or managing partners, according to 237

the case, stating that the capital composition of the company, complies 238

with rules established in Article I of this Statute. 239

The Definitive Certificate shall assure the benefits foreseen in this 240

Statute. 241

Only companies complying with the requests and formalities established 242

in this Statute are entitled to use the designation of "Brazilian-243

Argentinean Binational Company", according to paragraph 1 of Article 244

245



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3. The transference of shares or participation in Binational Companies, 246

requires previous consent form the Application Authority of the heading 247

country to control the fulfillment of the conditions foreseen in Article 1 248

of this Statute. 249

Article 9. Application Authority 250

The Application Authority of the heading country shall be responsible for the 251

certification of the constitution and functioning of the Binational Companies, 252

according to Article VII and connected Article s of this Statute. 253

The Application Authority of each country shall constitute and keep an 254

updated Register of Binational Companies of both countries, open to public 255

consultation. 256

In case of proven infractions to this statute or to the legislation of the 257

respective country, perpetrated by one Binational Company, the Application 258

Authority may consider ineffective the Binational qualification of such 259

company, notifying the Application Authority of the other country. In this case, 260

from the moment the infraction takes place, the company shall loose the 261

support of present Statute dispositions, without prejudice to other applicable 262

legal sanctions. 263

The Application Authority of each country shall be designated by their 264

respective Foreign Relations Minister within (thirty (30) days from the date 265

this Statute enters into force and same designation shall befall on an organ or 266

entity already existing in their respective central administrations. 267



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Article 10. Implementation of the Binational Companies Statutes 268

It is constituted though this Statute a Permanent Binational Committee for the 269

Implementation and FOLLOW-UP of the Binational Companies Statutes, 270

integrated by two representatives of the Public Sector of each State Party - 271

being one from the Foreign Relations Minister and the other from the 272

Application Authority - and two representatives of the Private Sector of each of 273

the two countries. 274

The representatives of the Private Sector shall have a two-year mandate, 275

renewable up to two times. Each member shall have a substitute. 276

The Committee shall develop its activities in any of the countries and shall 277

convene every six months or when called by one of the Parties. The Committee 278

is responsible for stimulating and supervising the implementation and full 279

validity in both countries, of measures to facilitate the formation and 280

functioning of the Binational Companies that guarantee the complete access to 281

the benefits granted by this Statute. 282

The Committee shall also act as a consultation organ for the national 283

governments with regard to all questions arising from the instrumentation and 284

complete application of this Statute, being responsible for the interpretation of 285

the contents and the range of its Dispositions. 286

The Committee shall establish its own Functioning Regulation during its first 287

meeting, which shall be held no later than sixty (60) days following the 288

entrance into force of this Statute. 289



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Article 11. Entrance into force 290

Present Statute shall enter into force on the date the respective ratification 291

instruments are exchanged. 292

Article 12. Validity and Denunciation 293

Present Statute shall have indefinite duration. 294

Present Statute may be denounced by any of the State Parties through 295

diplomatic means. 296

The denunciation shall take effect one year after the date of its notification to 297

the other State Party. 298

Article 13. Transitory Disposition 299

The Governments of the Federate Republic of Brazil and of the Republic of 300

Argentina upon entrance into force of this Treaty shall review within four 301

months the Convention between the Federate Republic of Brazil and the 302

Republic of Argentina destined to avoid the Double Taxation and Prevent Fiscal 303

Evasion in Income Tax Matters, signed on May 17,1989 to adjust it to the 304

disposals of present Treaty disposals. 305

SIGNED in Buenos Aires, on July 6, 1990 in the Portuguese and Spanish 306

languages, being both texts equally authentic. 307

308

309



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OUTLINE OF THE REGULATION FOR THE BRAZILIAN-310

ARGENTINEAN BINATIONAL COMPANIES STATUTE 311

CHAPTER I 312

THE DEFINITIONS 313

Article 1. 314

A Brazilian-Argentinean Binational Company - hereinafter Binational 315

Company - is the one that simultaneously fulfills the following conditions: 316

i. that at least eighty per cent of the corporate capital and of the votes 317

belong to national investors of the Federate Republic of Brazil and the 318

Republic of Argentina, assuring them the real and effective control of 319

the Binational Company. Effective control of the company means the 320

ownership of majority of the voting capital and the lawful and effective 321

exercise of the decision power to administrate its activities. 322

ii. that the participation of the conjoint of national investors of each of the 323

two countries, be of at least thirty per cent of the company’s corporate 324

capital; and 325

iii. that the conjoint of national investors of each of the two countries have 326

the right to elect, at least, one member for each of the administrative 327

organs and one member of the internal fiscalization organ of the 328

company. 329

330

Article 2. 331

Shall be considered national investors: 332



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i. the individuals domiciled in any of the two countries; 333

ii. the legal entities of public law of any of the two countries; 334

iii. the legal entities of private law of any of the two countries, in which the 335

majority of the corporate capital and its votes, and the effective 336

administrative and technological control are directly or indirectly hold 337

by the investors indicated in item I or II of this Article ; 338

iv. the Brazil-Argentina Investments Fund, as minority partner, according 339

to Protocol n.7 of the Brazil-Argentina Economic Integration and 340

Cooperation Program. 341

First Paragraph -The legal entities referred to in item III of this Article shall 342

integrate for the effects of item II of second Article , the conjoint of national 343

investors from the country to which their controllers belong. 344

Second Paragraph- The capital funding from the Brazil-Argentina Investments 345

Fund shall be considered accomplished by national investors, for the 346

computation of the participation foreseen in item I of first Article . 347

348

CHAPTER II 349

THE BINATIONAL COMPANY 350

Article 3. 351

The Binational Companies shall have one of the legal forms admitted by the 352

legislation of the country chosen to be the head-office and: 353

i. the head-office must be necessarily in the Federate Republic of Brazil or 354

in the Republic of Argentina; 355



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ii. the object may be any economic activity permitted by the legislation of 356

the country’s head-offices, except for the limitations established in 357

constitutional dispositions; 358

iii. branches, agencies or subsidiaries may be established in the other 359

country, complying with the national legislation referring to the object, 360

form and register of a national company; 361

iv. they shall aggregate to their denomination or corporate name the words: 362

"Brazilian-Argentinean Binational Company" or the initials "E.B.B.A" or 363

"E.B.A.B"; and 364

v. their corporate capital shall be expressed in the currency of the country 365

of the company’s head-offices. 366

Sole paragraph - When the chosen form is a corporation, the shares shall 367

obligatory be nominative and not subject to transference by endorsement. 368

369

Article 4. 370

The following capital funding may be performed to the Binational Companies: 371

I. in local currency from the country originating the investment; 372

II. in freely convertible currencies; 373

III. in capital goods and equipment’s of Brazilian and /or Argentinean 374

origin, with no exchange coverage in the receiving country; 375

IV. in capital goods and equipment’s originating from third countries, 376

provided they entered in the Federate Republic of Brazil or in Republic 377

of Argentina until July 6, 1990 and were paid up to the corporate 378

capital until June 26,1994. From this last date on, the capital goods and 379

equipment’s originating from third countries shall be subject to the 380



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taxation treatment in force in the Federate Republic of Brazil and in the 381

Republic of Argentina. 382

V. others permitted by the legislation of each country. 383

Sole Paragraph - For the purposes of item III of this Article , both Governments 384

shall take the necessary steps to assure that the ingress of funding in their 385

respective territories is made according to the Bilateral Commercial 386

Agreements, subscribed between the Federate Republic of Brazil and the 387

Republic of Argentina in the ambit of the Association for Latin-American 388

Integration (ALADI) releasing them from any tariffary or non-tariffary 389

restrictions, according to the national legislation for the entrance or exit of 390

such funding applicable in both countries. 391

392

Article 5. 393

Financial institutions shall be governed by pertinent legislation applicable to 394

each country. 395

396

CHAPTER III 397

THE APPLICATION AUTHORITIES 398

399



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Article 6. 400

The Application Authorities are the Secretary of Industrial Policy of the 401

Industry, Commerce and Tourism Ministry of the Federate Republic of Brazil 402

and the General Justice Inspection of the Argentine Republic. 403

404

Article 7. 405

The Application Authority of the heading country shall be responsible for the 406

certification of the Binational Companies constitution and functioning. 407

Sole Paragraph -The Application Authorities shall jointly define the rules for 408

the operational certification procedures of the Binational Companies 409

constitution and functioning. 410

411

Article 8. 412

The Application Authority of each country shall constitute and maintain a 413

Register of Binational Companies of both countries for public consultation. 414

Sole Paragraph -The Register of Binational Companies shall obligatorily 415

contain the following information: 416

Corporate name; 417

Date of constitution; 418

Place of the head-offices; 419

Social object: 420



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Sector of economic activity; 421

Responsible for contact; 422

Function in the company; 423

Telephone; 424

Fax; 425

Composition of the capital; 426

Shareholders, quotaholders; 427

Nationality; 428

Participation percentage; 429

Branches (localization); 430

431

CHAPTER IV 432

THE CERTIFICATION 433

Article 9. 434

The certification of the constitution and functioning of the Binational 435

Companies shall be made through the issuance of Temporary and Definitive 436

Certificates. 437

First Paragraph -The Temporary Certificate granted to national investors, is 438

the necessary document for the authorization of the capital funding 439

individualized in it, and must necessarily contain the amount of the corporate 440

capital, nature and percentage of respective funding, in compliance to Article 441

22. 442

Second Paragraph- The Definitive Certificate shall qualify the company as 443

Binational. 444



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445

Article 10. 446

For obtention of the Temporary Certificate, the investors in Binational 447

Companies shall present to the Application Authority of the heading country, 448

the following documents: 449

I. agreement stipulating the conditions of the Binational Companies 450

constitution and operation, obligatorily including information on the 451

following: 452

a. objectives and activity programs of the Binational Company; 453

b. structure of the corporate capital; 454

c. name, nationality and partners domicile; 455

d. nature and value of the respective funding to the Binational 456

Company capital; 457

e. distribution of functions and administration offices between the 458

investors of each country; 459

f. rules for the distribution of results of the Binational Companies; 460

g. rules for commercial operations between the investors and their 461

Binational Company; 462

h. preference rules for cases of shares sale and increase of corporate 463

capital; 464

i. rules on the liquidation of Binational Companies; 465

j. rules for the solution of controversies, including the jurisdiction 466

election for such effects; and 467

II. copy of the project of the Bylaws or social contract for the constitution 468

of the Binational Company. 469

470



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Article 11. 471

Upon verification of the fulfillment of the constitutive requirements for a 472

Binational Company, the Application Authority of the heading country shall 473

issue a Temporary Certificate. 474

475

Article 12. 476

By presentation of the Temporary Certificate to the Application Authority of 477

the other country, it shall automatically be authorized to transfer the capital 478

funding individualized in the Certificate. 479

480

Article 13. 481

The Application Authority of the constituting country of the Binational 482

Company shall issue the Definitive Certificate through presentation by the 483

parties of the following documents: 484

I - copy of the social contract with the constitution minutes, statute and 485

subscription bulletin filed at the competent registry; and 486

II - receipts of the corporate capital integralization. 487

488



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Article 14. 489

The presentation of the Definitive Certificate shall assure the rights to the 490

benefits foreseen in this Statute, releasing the Binational Company from 491

presenting any other additional document for its qualification. 492

Sole Paragraph - Upon the issuance of he Definitive Certificate, the 493

Application Authority of the heading country shall communicate such 494

act to the Application Authority of the other country. 495

496

Article 15. 497

The change of denomination or of the corporate name of the Binational 498

Company shall require the emission of a new Definitive Certificate from the 499

Application Authority of the country heading the company, being enough in 500

this case, the evidence of the inscription of changing acts with the competent 501

registry. 502

503

Article 16. 504

The transference of shares, participation’s, assignment of quotas, capital 505

increase or reduction of Binational Companies, shall require the agreement of 506

the Application Authority of the heading country, for the purpose of 507

controlling fulfillment of Article 1 disposal. 508

509



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Article 17. 510

The Application Authority, upon confirmation of infractions to the Statute of 511

the Brazilian-Argentinean Companies or to the legislation of respective 512

country, may declare ineffective the Binational company qualification of the 513

transgressing company. 514

Sole Paragraph - Once disclassified as Binational, the company shall 515

loose the support of this Statute’s dispositions, from the moment the 516

infraction took place, without prejudice of other applicable legal 517

sanctions. In this case, the Application Authority shall notify the other 518

country and the register organ of its constitutive acts, as well as shall 519

publish the disqualification act in the Official Gazette. 520

521

CHAPTER v 522

THE TREATMENT 523

524

Article 18. 525

The Binational Companies shall have in their acting country, the same 526

treatment established or to be established for companies of national capital of 527

such country, even if the majority of the corporate capital belongs to investors 528

of the other country, according to Chapter I, in the following matters: 529

I. internal taxation; 530

II. access to internal credit; 531



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III. access to incentives or advantages for the promotion of national, 532

regional or sectorial industry; and 533

IV. access to acquisitions and agreements in the public sector. 534

Article 19. 535

The goods and services produced by the Binational Companies shall benefit 536

from priority treatment equivalent to the companies of national capital, in the 537

implementation by both Governments of bilateral initiatives developed in the 538

context of the integration process and economic cooperation. 539

Article 20. 540

The treatment foreseen in this Chapter comprises branches, agencies and 541

subsidiaries of Binational Companies. 542

543

CHAPTER VI 544

TRANSFERENCE’S OVERSEAS 545

546

Article 21. 547

The investors of each of the one countries of one Binational Company, once 548

having paid their due taxes, are entitled to freely transfer the profits arising 549

from their investments to their respective origin countries, provided they are 550

proportionally distributed between the investors and also to repatriate their 551

participation in the corporate capital, observing the applicable legal 552



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dispositions of each country. Branches, agencies or subsidiaries of the 553

Binational Companies are entitled to same rights with regard to their net 554

profits. 555

556

Article 22. 557

The capital funding and other transference’s shall be registered with the 558

competent organs. 559

560

Article 23. 561

Even in cases of difficulties in the external payments, the Governments of both 562

countries shall not impose restrictions to the investors of Binational Companies 563

for the free transference of entitled net profits. 564

565

CHAPTER VII 566

PERSONNEL TRANSFERENCE 567

568



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Article 24. 569

The two Governments shall take the necessary measures to facilitate the 570

transference between both countries of the personnel employed by the 571

Binational Companies, including: 572

I. facility for the obtention of the authorization for temporary or definitive 573

permanency; and 574

II. reciprocal recognition of professional titles. 575

576

577

578

PERMANENT BINATIONAL COMMITTEE FOR THE 579

IMPLEMENTATION AND FOLLOW-UP OF THE STATUTE FOR 580

BRAZILIAN- ARGENTINEAN BINATIONAL COMPANIES 581

INTERNAL REGIMENT 582

CHAPTER. 583

1 THE PURPOSE 584

585

Article 1. 586

The Permanent Binational Committee for the Implementation and FOLLOW-587

UP of the Statute for Brazilian-Argentinean Binational Companies referred to 588

in Article 10 of the Treaty for the Establishment of an Statute for Brazilian-589



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Argentinean Binational Companies, signed in Buenos Aires on 7.6.1990 has 590

the following purpose: 591

I - to stimulate and supervise the establishment and full validity in Brazil and 592

in Argentina of the Binational Companies Statutes; 593

II - the performance as consultation organ of the national Governments 594

concerning all questions arisen by the instrumentation and full application of 595

referred Statute. 596

597

CHAPTER II 598

2 THE COMPOSITION 599

600

Article 2. 601

The Permanent Binational Committee shall be composed of: 602

I - two representatives of the public sector of each State Party, being: 603

one representative from the Foreign Relations Ministry, who shall coordinate 604

the National Section of the Permanent Binational Committee; 605

one representative of the Application Authority; 606

II - two representatives of the private sector of each State Party. 607

Paragraph 1.- The designation of the members of each country in the 608

Permanent Binational Committee shall be officially communicated by the 609

respective Foreign Relations Ministries. 610



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Paragraph 2.- The representatives of the private sector shall have a two-year 611

mandate renewable up to two periods. 612

Paragraph 3.- Each member of the Permanent Binational Committee shall have 613

one substitute. 614

Paragraph 4.- The coordination of the Permanent Binational Committee shall 615

be performed alternatively by each Country, for a one-year period. The 616

Country heading the meetings shall appoint the Coordinator. 617

618

CHAPTER III 619

3 THE COMPETENCIES 620

621

Article 3. 622

It competes to the Permanent Binational Committee: 623

I - through Resolutions, propose measures to facilitate the formation and 624

functioning of the Brazilian-Argentinean Binational Companies and that 625

guarantee their full access to the benefits granted by the Statute; 626

II - interpret the contents and the attainment of the Statute’s dispositions; 627

III - opine by its own or by private individuals initiatives, on the decisions of 628

the Application Authorities and adopt respective recommendations; 629

IV - make the pronunciations about cases not foreseen in the Binationals 630

Statutes; 631



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V - approve proposals of norms for the operational procedure for the 632

certification of the constitution for the functioning of Binational Companies, in 633

matters considered by common agreement, necessary or convenient by the 634

Application Authorities. 635

VI - constitute technical working groups for the treatment of specific themes; 636

Article 4. 637

It competes to the Permanent Binational Coordination Committee: 638

I - call and preside its meetings; 639

II - based on the proposals made by the State Parties prepare the guidelines for 640

the meetings and address them to the other members of the Permanent 641

Binational Committee, at least thirty days in advance; 642

III - publish in the Official Gazettes of both countries, the acts of the 643

Permanent Binational Committee; 644

IV - keep an updated file with the totality of the documentation related to the 645

activities of the Permanent Binational Committee; 646

V - receive consultations made to the Permanent Binational Committee by 647

private individuals or public organs of both Countries and start their 648

procedures; 649

650

CHAPTER IV 651

4 THE MEETINGS 652

Article 5. 653



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The Permanent Binational Committee shall meet ordinarily and 654

extraordinarily. 655

Paragraph 1.- The ordinary meetings shall be held every six months and 656

extraordinarily every time deemed necessary, by request of the State Parties, on 657

a place to be determined. 658

Paragraph 2. - The meetings shall be held, in principle, at one same Country 659

every year. 660

Paragraph 3.- By decision of the Committee’s National Sections coordination’s, 661

specialists may participate from the meetings of the Permanent Binational 662

Committee. 663

Paragraph 4.- The meetings of the Permanent Binational Committee shall be 664

held with a minimum "quorum" of one representative of the Foreign Relations 665

Ministry and one representative of the Application Authority of each State 666

Party. 667

Paragraph 5.- The meetings of the Permanent Binational Committee shall be 668

presided by its Coordinator. 669

Paragraph 6.- The proposals shall be analyzed by the members of the 670

Permanent Binational Committee, and may only be approved by consensus of 671

the State Parties. 672

Paragraph 7.- The substitutes of the members of the Permanent Binational 673

Committee may participate in the meetings together with the respective titular 674

members. 675

Paragraph 8.- The minutes shall contain, in public character, the matters 676

discussed in the meetings, as well as the resolutions adopted shall be enclosed 677

to the list of participants. The minutes and other working documents of the 678

Permanent Binational Committee shall be written in the language of the 679



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heading Country of the meeting and identified by the abbreviators: 680

CBPI/Minutes, RES or DOC. The Resolutions shall be sequentially numbered 681

and followed by the year indication. 682

Paragraph 9.- The Minutes and Resolutions of the Permanent Binational 683

Committee shall be signed at least by the Coordinator of the Meeting and by 684

one representative of the public sector of the other State Party. 685

Paragraph 10.- If no consensus is reached, the diverging opinions may be 686

registered in the minutes by request of the dissenting member. 687

688

ANNEX TO ORDER N./93 689

690

REGULATION OF THE ATTRIBUTIONS AND 691

FUNCTIONS OF THE AUTHORITY FOR THE 692

APPLICATION OF THE STATUTES OF BRAZILIAN-693

ARGENTINEAN BINATIONAL COMPANIES 694

CHAPTER I 695

696

THE PURPOSE 697

Article 1. 698

It competes to the Secretary of Industrial Policy: 699



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I - Analyze the requests for the emission or changes of Temporary Certificates 700

granted to the national Brazilian and Argentinean investors; 701

II - Analyze the requests for the emission or changes of the Definitive 702

Certificate for qualification as a Binational Company; 703

III - Issue Temporary or Definitive Certificates, observing the disposal of 704

paragraphs 1 and 2 of Article VIII of the Brazilian-Argentinean Binational 705

Companies Statute; 706

IV - Determine the Binational qualification ineffective;. 707

V - Communicate to the Application Authority of the Republic of Argentina 708

the issuance of the Definitive Certificate and its amendments, as well as, its 709

disqualification as Binational Company. 710

VI - Communicate the disqualification as Binational Company to the 711

registration organ of its constitutive acts; 712

VII - Analyze and previously express its opinion on the transference of shares, 713

participation’s, assignments of quotas and changes in the corporate capital, 714

when same imply in changes of the corporate structure of the Binational 715

Company; 716

IX - Comply with all recommendations of the Permanent Binational 717

Committee related to the interpretation of the contents and extension of the 718

Statute’s dispositions; 719

X - Coordinate with the competent governmental organs, the manner to 720

guarantee the simplification of the procedures for the constitution, functioning 721

and following of the Binational Company activities; 722



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XI - Fiscalize the fulfillment of the qualification requirements for Binational 723

Companies and its actual and effective activity, requesting pertinent 724

information of the company, its investors, branches, agencies and subsidiaries; 725

XII - Authorize the transference of individualized capital funding on the 726

Temporary Certificate, issued by the Application Authority of the Republic of 727

Argentina. 728

729

CHAPTER II 730

731

THE CERTIFICATION 732

733

Article 2. 734

The certification of constitution and functioning of the Binational Company 735

shall be made through the issuance of Temporary and Definitive Certificates, 736

according to the samples of Annex A and B of this Regulation. 737

Sole Paragraph: The Temporary Certificate granted to national investors, is the 738

qualified document to authorize the transference of the capital funding 739

therein individualized. 740

741

Article 3. 742

For the obtention of the Temporary Certificate, the national investors shall 743

present to the Secretary of Industrial Policy the following documents: 744



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I - Copy of the agreement establishing the constitution and operation 745

conditions of the Binational Company, obligatorily containing the following 746

information: 747

748

749

objectives and programs of the Binational Corporation activities; 750

structure of the corporate capital, with participation percentage of each 751

investor; 752

name, nationality and partners domicile; 753

754

755

nature and value of respective capital funding of the Binational Company, 756

with the precise identification of same funding, observing the disposal of 757

paragraph 1, Article IV of the Statute; 758

distribution of functions and administration offices between the investors of 759

each country, observing the disposal of letter c, paragraph 2, Article I of the 760

Statute; 761

rules for the distribution of results of the Binational Company; 762

rules for the commercial operations between the investors and their Binational 763

Company; 764

preference rules for cases of shares sale and increase of corporate capital; 765

rules for liquidation of Binational Companies; 766



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rules for the solution of controversies, including jurisdiction election for such 767

effect; 768

II- Copy of the project of the Bylaws or social contract for the constitution of 769

the Binational Company. 770

Sole Paragraph: In case of participation of a legal entity of private law of any of 771

both countries, it shall be requested the presentation of a declaration from its 772

legal representative stating that the majority of the corporate capital, votes and 773

effective administrative and technological control are directly or indirectly 774

hold by individuals domiciled in Brazil or Argentina or by legal entities of 775

public law of any of both countries. 776

777

Article 4. 778

In case of new funding entry, it may be requested the issuance of a Temporary 779

Certificate for the treatment foreseen in the Statute, under confirmation of the 780

shareholders or quotaholders decision on the corporate capital increase. 781

782

Article 5. 783

The authorization for the transference of funding foreseen in paragraph 3, 784

Article IV of the Statute, shall be granted by acknowledgment of the Secretary 785

of Industrial Policy on the original Temporary Certificate issued by the 786

Application Authority of the Republic of Argentina. 787

788

Article 6. 789

The capital funding shall be registered at the competent organs. 790



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791

Article 7. 792

The Secretary of Industrial Policy shall issue a Definitive Certificate by the 793

presentation of following documents: 794

I - Receipt of the inscription of the company’s constitutive acts at the 795

competent register; 796

II - Receipt of the integralization of totality of the corporate capital; 797

III - Copy of the statute, agreement or social contract, or equivalent document, 798

with eventual amendments occurred between the constitution date of the 799

company and the issuance request of the Definitive Certificate; 800

IV - Sworn declaration of the directors or managing partners, according to the 801

case, stating that the composition of the company’s corporate capital complies 802

with the rules established in Article I of the Statute; 803

Sole Paragraph: Upon issuance of the Definitive Certificate, the Secretary of 804

Industrial Policy shall notify the Application Authority of the Republic of 805

Argentina and shall publish the decision in the Official Gazette. 806

807

Article 8. 808

The company already constituted in compliance with the requests foreseen in 809

the Statute, may be qualified as Binational Company, being entitled to the 810

benefits from the moment the Definitive Certificate is issued. 811

812

813



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CHAPTER III 814

THE TRANSFERENCE OF SHARES AND PARTICIPATION 815

Article 9. 816

The transference of shares or participation in Binational Companies shall 817

request previous consent of the Secretary of Industrial Policy, to control the 818

fulfillment of Article I of the Statute. 819

820

Paragraph 1. For previous consent for the transference of shares or 821

participation of Binational Companies, it shall be delivered a sworn 822

declaration to the Secretary of Industrial Policy containing: 823

complete qualification of the parties involved in the transference operation; 824

that the transference shall not affect the minimum percentages required by 825

letters a) and b) of paragraph 2, Article I of the Statute. 826

827

Paragraph 2. Within 15 days from the effectiveness of the transference, the 828

company shall deliver to the Secretary of Industrial Policy a declaration with 829

the capital distribution, specifying the quantity and complete characteristics of 830

the shares or participation, the complete data of its titular and the percentages 831

corresponding to each of them. 832

833

CHAPTER 834



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THE PENALTIES 835

Article 10. 836

The Secretary of the Industrial Policy, upon confirmation of infractions to the 837

Statute or to the Brazilian law in force, may consider ineffective the Binational 838

qualification of the infringing company. 839

Paragraph 1. In case a company become disqualified as Binational, the 840

Secretary of Industrial Policy shall notify the Application Authority of the 841

Republic of Argentina and the register organ of the company’s constitutive 842

acts, and shall publish the disqualification act in the Official Gazette. 843

Paragraph 2. In case of disqualification, the Binational Company shall loose 844

the supporting rights of the Statute from the moment the infraction took place, 845

without prejudice to other applicable legal penalties. 846

CHAPTER 847

THE GENERAL DISPOSITIONS 848

Article 11. 849

The Secretary for Industrial Policy is authorized to issue the acts deemed 850

necessary for the application of this Regulation, observing the legislation in 851

force. 852

Article 12. 853

The Application Authority shall maintain a Register of the Binational 854

Companies with the following information: 855

Trade name; 856



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Numbers of the inscription in the Commerce Registry and in the General 857

Register of the TaxPayers of the Finance Ministry; 858

Date and constitution act; 859

Name, position, number of the inscription in the Register of Individuals of the 860

Finance Ministry; Domicile and mandate of the members of the Board of 861

Directors, Administration Council and Fiscal Council; 862

Localization of he head-offices and branches; 863

Sector of economic activity; 864

Composition of the capital; 865

Shareholders/quotaholders; 866

Nationality; 867

Participation percentage; 868

Number, issuance date and publication in the Official Gazette of the Definitive 869

Certificate; 870

Responsible for contact; 871

Position in the company; 872

Telephone/fax. 873

Sole Paragraph- The communication regarding the issuance of the 874

Definitive Certificate or any change related to the functioning of the 875

Binational Companies, shall be accompanied by the data foreseen in this 876

Article , along with the copies of the documents requested by the 877



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Application Authority of the Republic of Argentina, under reciprocity 878

conditions. 879

880

Article 13. 881

The Binational Companies shall send to the Secretary of Industrial Policy, a 882

certified copy of all acts that have been practiced in connection with the 883

maintenance of the fulfillment the Statutes requirements within 30 days from 884

the occurrence of the fact that originated it, exception made to the disposal of 885

paragraph 2, Article 9, of this Regulation. 886

887

Article 14. 888

In the case of financial institutions specific legislation shall be applicable, 889

besides this regulation. 890



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