Resolution CMN No. 3844 — Regulates Foreign Capital in the Country and its Registration at the Central Bank of Brazil

Resolution No. 3844, of March 23, 2010.

RESOLUTION No. 3844

Regulates foreign capital in the Country and its registration at the Central Bank of Brazil, and gives other provisions.

The Central Bank of Brazil, in accordance with art. 9 of Law No. 4.595, of December 31, 1964, makes public that the National Monetary Council, in an extraordinary session held on March 23, 2010, based on arts. 4, items V and XXXI, and 57 of the aforementioned Law; on Law No. 4.131, of September 3, 1962; on arts. 6 and 16, § 1, of Law No. 6.099, of September 12, 1974; on art. 65, § 2, of Law No. 9.069, of June 29, 1995; on art. 5, § 5, of Law No. 11.371, of November 28, 2006; and on Decree No. 55.762, of February 17, 1965,

RESOLVED:

Art. 1 This Resolution regulates foreign capital entered or existing in the Country, in currency or in goods, and its registration at the Central Bank of Brazil, including the registration of financial movements arising therefrom with the exterior.

§ 1 The registration referred to in the caput, carried out in a declaratory and electronic manner, comprises the following modalities, whose Regulations are attached to this Resolution:

I - direct foreign investment;
II - external credit, including external financial leasing; III - royalties, technical services and similar, external operational leasing, rent and chartering; IV - guarantees provided by international organizations; V - capital in national currency, in accordance with Law No. 11.371, of November 28, 2006.

§ 2 The registration referred to in this article must be carried out in the foreign currency in which the resources effectively entered the Country or, in the situations provided for in the legislation in force, in national currency.

Art. 2. Observing the exchange provisions and specific legislation, financial transfers to and from the exterior, in national currency or in foreign currency, relating to foreign capitals in Brazil must follow the form and conditions established in this Resolution.

Sole paragraph. Financial transfers to the exterior may be made in any currency, regardless of the currency in which the registration is carried out at the Central Bank of Brazil.

Resolution No. 3844, of March 23, 2010.

Art. 3 For the purposes of this Resolution, registration is defined as the entry, in the Central Bank Information System (Sisbacen) – Electronic Declaratory Registration (RDE), of the information necessary to identify the parties and to characterize the individualized operations related to foreign capital invested in the Country.

Sole paragraph. The registration referred to in this article must be carried out within 30 (thirty) days, counted from the date of the event that gave rise to it, observing the norms issued in the Annex Regulations.

Art. 4 The persons responsible for the registration, indicated in the Annex Regulations to this resolution, must keep at the disposal of the Central Bank of Brazil, updated and in order, the supporting documentation of all information declared in the RDE, until the end of the 5 (five) year period, counted from the end of participation in the share capital of the recipient legal entity, in the case of direct foreign investment, or from the conclusion of the operation, in the other cases.

Art. 5 The carrying out of the registration referred to in this Resolution does not exempt the persons responsible for the registration from complying with the legal and regulatory provisions applicable to the registered operations, including those of a tax nature.

Art. 6 The persons responsible for the registration must inform the Central Bank of Brazil, in the form and within the period defined by it, of the carrying out of payment, directly in the exterior, of an external obligation related to the operation registered in accordance with this Resolution.

Art. 7 For the purposes of the registration referred to in this Resolution, operations subject to simultaneous exchange operations or international transfers in reais, without actual delivery of resources and regardless of prior authorization by the Central Bank of Brazil:

I - the conversion of assets of non-residents in the Country into a modality of foreign capital registrable at the Central Bank of Brazil; and II - the transfer between modalities of foreign capital registered at the Central Bank of Brazil.

Art. 8 Failure to observe the provisions of the regulation regarding the registration of foreign capitals in the Country implies the prohibition of carrying out financial transfers under the registration, while the irregularities are not remedied, without prejudice to the application of penalties in accordance with the legislation or regulation in force.

Art. 9 This Resolution does not apply to investments, in the financial and capital markets, of individuals and legal entities, funds and other collective investment entities with residence, domicile or headquarters abroad, whose registration, carried out in a declaratory and electronic manner, follows the provisions of specific regulation.

Art. 10. The Central Bank of Brazil will issue the norms and adopt the measures necessary for the execution of the provisions of this Resolution, possibly establishing, inclusive, the form and other operational aspects related to each modality of registration of foreign capital.

Resolution No. 3844, of March 23, 2010.

Art. 11. Resolutions Nos. 1,460, of February 1, 1988, 1,466, of March 1, 1988, 1,522, of September 21, 1988, 1,530, of November 30, 1988, 1,834, of June 26, 1991, 2,063, of April 13, 1994, 2,337, of November 28, 1996, 2,770, of August 30, 2000, 3,217, of June 30, 2004, 3,218, of June 30, 2004, and 3,221, of July 29, 2004, as well as arts. 1, 2, 4, 6 and 7 of Resolution No. 1,969, of September 30, 1992, and arts. 1 to 6 of Resolution No. 3,455, of May 30, 2007, are hereby repealed.

Art. 12. This Resolution enters into force on the date of its publication.

Brasília, March 23, 2010.

Henrique de Campos Meirelles
President

TITLE: TRANSITORY PROVISIONS – 29 Page 1 of 2
CHAPTER: Non-Code Resolutions - 1
SECTION:
Resolution No. 3,844, of 23.3.2010.

ANNEX I REGULATION TO RESOLUTION No. 3,844, OF MARCH 23, 2010
DIRECT FOREIGN INVESTMENT

Art. 1 This Regulation regulates the electronic declaratory registration, at the Central Bank of Brazil, of direct foreign investment in the Country.

Art. 2 The registration referred to in this Regulation must be carried out in the Electronic Declaratory Registration system, Direct Foreign Investment module (RDE-IED), of Sisbacen.

Sole paragraph. The registration must be preceded by authorization from the Central Bank of Brazil for investment in the share capital of financial institutions and other institutions authorized by it to operate.

Art. 3 For the purposes of this Regulation, the following definitions are adopted:

I - non-resident investor: an individual, legal entity or collective investment entity that, having residence, domicile or headquarters abroad, holds or intends to hold participation in the share capital of a company in the Country; II - recipient company: a business legal entity constituted under Brazilian laws and with domicile and administration in the Country, in whose share capital the non-resident investor holds or intends to hold participation, as well as a branch of a foreign business legal entity authorized to operate in Brazil.

Art. 4 The persons responsible for the registration are the recipient company and the representatives, in the Country, of the non-resident investor, indicated in the RDE-IED module.

Art. 5 The following must be registered as direct foreign investment: the participation of a non-resident investor in the share capital of a recipient company, fully paid or acquired in accordance with the legislation in force, and the capital highlighted from a foreign company authorized to operate in Brazil.

Art. 6 The capitalization of profits, dividends, interest on own capital and profit reserves, in the recipient company in which they were produced, must be registered as reinvestment in the currency of the country to which they could have been remitted or, in the case of investment registered in national currency, in reais.

Art. 7 Corporate reorganizations involving recipient companies are subject to registration, in accordance with this Regulation.

Art. 8 Direct foreign investment through the contribution of tangible goods is characterized by the capitalization of the value corresponding to goods owned by non-residents, imported without the obligation of payment.

TITLE: TRANSITORY PROVISIONS – 29 Page 2 of 2
CHAPTER: Non-Code Resolutions - 1
SECTION:
Resolution No. 3,844, of 23.3.2010.

Sole paragraph. The registration of the investment referred to in the caput must be carried out within 30 (thirty) days, counted from the date of customs clearance of the tangible good.

Art. 9 The capitalization of capital reserves and revaluation does not alter the value of the registration, reflecting only in the investor's participation.

Art. 10. This Regulation applies subsidiarily to the registration modality referred to in art. 5 of Law No. 11.371, of November 28, 2006, in accordance with art. 6 of Annex Regulation V to this Resolution.

TITLE: TRANSITORY PROVISIONS – 29 Page 1 of 5
CHAPTER: Non-Code Resolutions - 1
SECTION:
Resolution No. 3,844, of 23.3.2010.

ANNEX II REGULATION TO RESOLUTION No. 3,844, OF MARCH 23, 2010
EXTERNAL CREDIT

CHAPTER I
General Provisions

Art. 1 This Regulation regulates the electronic declaratory registration, at the Central Bank of Brazil, of external credit operations granted to an individual or legal entity resident, domiciled or with headquarters in the Country by an individual or legal entity resident, domiciled or with headquarters abroad, in the following modalities:

I - external loan, including through the issuance of securities; II - external financing; III - external financial leasing.

Art. 2 The registration referred to in this Regulation must be carried out in the Electronic Declaratory Registration system, Financial Operation Registration module (RDE-ROF), of Sisbacen.

Art. 3 The costs and other conditions of the operations referred to in this Regulation must maintain compatibility with those usually observed in international markets and must be clearly defined in the registration, with no outstanding maturities or undefined or unlimited charges linked to the financial results or to any form of business performance measurement of the borrower or third parties being admitted.

Art. 4 The persons responsible for the registration referred to in this Regulation, as the case may be, are the borrower of external resources, the importer and the lessee, through their representatives.

Art. 5 Prior to the contracting of the operations referred to in this Regulation, the bodies or entities of the Federal Administration, of the States, of the Federal District and of the Municipalities are subject to accreditation at the Central Bank of Brazil, in accordance with specific regulation.

Art. 6 Early settlement of external obligations related to the operations referred to in this Regulation is permitted.

Art. 7 This Regulation applies subsidiarily to the registration modality referred to in art. 5 of Law No. 11.371, of November 28, 2006, in accordance with art. 6 of Annex Regulation V to this Resolution.

TITLE: TRANSITORY PROVISIONS – 29 Page 2 of 5
CHAPTER: Non-Code Resolutions - 1
SECTION:
Resolution No. 3,844, of 23.3.2010.

CHAPTER II
External Loans

Art. 8 The resources entered into the Country regarding external loans contracted directly or through the issuance of securities in the international market are subject to registration, in accordance with this Regulation, regardless of the term of the operation.

Art. 9 Once the entry of resources has occurred, changes in maturity date and financial conditions (renewal) and debtor (assumption) are the responsibility of the original borrower, who must carry them out in a timely manner in the RDE-ROF module, through a specific modality, canceling the original debt registration and constituting a new registration.

Art. 10 Financial institutions and leasing companies are permitted to raise resources abroad, for free application in the domestic market.

Sole paragraph. The faculty referred to in this article comprises, with respect exclusively to financial institutions, the carrying out of pass-through operations, in accordance with art. 11, observing the provisions of art. 12.

Art. 11. A pass-through operation is understood as a contract linked to the raising of resources abroad, through which a national financial institution grants credit to an individual or legal entity resident, domiciled or with headquarters in the Country, by transferring identical conditions of cost of the debt contracted abroad in foreign currency (principal, interest and accessory charges), including the taxation applicable to the hypothesis.

§ 1 The charging of any type of burden, under any title, beyond the commission for the financial intermediation service, is prohibited in pass-through operations.

§ 2 In the operations referred to in this article, the financial institution must pass on to the borrower of resources, in the Country, the effects of the exchange variation corresponding to the debt contracted abroad in foreign currency.

Art. 12. Financial institutions and leasing companies may carry out interfinancial pass-through operations, understood as pass-through operations whose borrower, in the Country, is another financial institution or leasing company.

Section I
External loans denominated in reais

Art. 13. The raising of resources, by an individual or legal entity domiciled or with headquarters in the Country, through the contracting of a direct loan or issuance of securities in the international market, denominated in reais, must be registered in the same currency in which the effective entry of resources into the Country occurred.

TITLE: TRANSITORY PROVISIONS – 29 Page 3 of 5
CHAPTER: Non-Code Resolutions - 1
SECTION:
Resolution No. 3,844, of 23.3.2010.

Art. 14. Regardless of the currency in which the registration referred to in art. 13 is carried out, the carrying out, under the registration, of financial transfers to the exterior in any currency is permitted.

§ 1 The transfers referred to in the caput of this article are limited to the amount corresponding to the value, in national currency, necessary to make the payment of interest and charges of the operation, as well as to settle the principal of the debt.

§ 2 The values referred to in this article may be paid, alternatively, through movement in a current account, in the Country, owned by the external creditor or by the agent responsible for the payments, in the exterior, of the obligations arising from the operation.

Section II
Advance export receipt operations

Art. 15. The resources entered into the Country regarding advance export receipt with a period prior to the date of shipment of the goods or provision of the service exceeding 360 (three hundred and sixty) days are subject to registration, in accordance with this Regulation.

Art. 16. The advance export receipt operation with a term exceeding 360 (three hundred and sixty) days may be linked to the export of the financing borrower, its holding company, its subsidiaries, or companies that are controlled by its holding company.

Art. 17. The amortization of the operations referred to in this section must be carried out through the shipment of goods or the provision of services, with interest being paid through financial transfers or exports.

Art. 18. In the event that the shipment of goods or the provision of services referred to in art. 17 does not occur, the return, to the exterior, of the resources that entered the Country in the manner of this section, or the transfer of the corresponding registration to the modalities of direct foreign investment or external loan, is permitted.

CHAPTER III
External Financing

Art. 19. External financing operations with a payment term exceeding 360 (three hundred and sixty) days are subject to registration, in accordance with this Regulation, through:

I - direct financing or refinancing to the importer, by the supplier of the good, tangible or intangible, by the service provider or by another financier; II - use of external credit lines granted to institutions authorized to operate in exchange headquartered in the Country, for financing importers.

TITLE: TRANSITORY PROVISIONS – 29 Page 4 of 5
CHAPTER: Non-Code Resolutions - 1
SECTION:
Resolution No. 3,844, of 23.3.2010.

Art. 20. The importation of goods without the obligation of payment to non-residents, intended for the full payment of capital of Brazilian companies, must be registered in the RDE-ROF module, and the person responsible for the registration must subsequently provide for the registration of direct foreign investment in the RDE-IED module, in accordance with Annex Regulation I.

CHAPTER IV
External Financial Leasing

Art. 21. External financial leasing (financial leasing) operations contracted between a lessor domiciled abroad and a lessee in the Country, with a payment term exceeding 360 (three hundred and sixty) days, are subject to registration, in accordance with this Regulation.

Art. 22. The norms regarding the registration of financed import operations apply to the registration of external financial leasing operations, insofar as applicable.

Art. 23. The external financial leasing contract may have as its object capital goods, movable goods and real estate, owned by foreigners, new or used, observing, for their entry into the Country, the norms that govern importation.

Art. 24. The useful life of the good subject to external financial leasing is considered to be that informed:

I - by the manufacturer, when it is a new good; II - by the manufacturer or by a specialized company, foreign or national, when it is a used good; III - by a specialized company, when it is a real estate good.

Art. 25. For the purposes of this chapter, external financial leasing must observe the following rules:

I - the total term of the operation must be limited to the useful life of the good; II - the counterpayments must be compatible with those practiced in the international market; III - the contractual installments, fixed installments, must be distributed over time in such a way that, at any moment during the validity of the contract, the proportion between the total value already transferred to the exterior and the value of the leasing is not higher than the proportion existing between the time already elapsed and the total term of the operation; IV - the contract must contain a clause of purchase option or of renewal of the contract validity term.

TITLE: TRANSITORY PROVISIONS – 29 Page 5 of 5
CHAPTER: Non-Code Resolutions - 1
SECTION:
Resolution No. 3,844, of 23.3.2010.

Art. 26. When it is a contract of external financial leasing between a lessor-buyer domiciled abroad and a lessee-seller domiciled in the Country (sale-lease-back), the value of the contract must be lower than 90% (ninety percent) of the cost of the good subject to the leasing, the acquisition of which must occur through cash payment.

TITLE: TRANSITORY PROVISIONS – 29 Page 1 of 2
CHAPTER: Non-Code Resolutions - 1
SECTION:
Resolution No. 3,844, of 23.3.2010.

ANNEX III REGULATION TO RESOLUTION No. 3,844, OF MARCH 23, 2010
ROYALTIES, TECHNICAL SERVICES AND SIMILAR, EXTERNAL OPERATIONAL LEASING, RENT AND CHARTERING

Art. 1 The following contracts are subject to electronic declaratory registration at the Central Bank of Brazil, in accordance with this Regulation, when carried out between an individual or legal entity resident, domiciled or with headquarters in the Country and an individual or legal entity resident, domiciled or with headquarters abroad:

I - use or cession of patents, of industrial or commercial trademarks, supply of technology or other contracts of the same kind, for the purpose of financial transfers to the exterior as payment of royalties; II - provision of technical services and similar; III - external operational leasing with a term exceeding 360 (three hundred and sixty) days; IV - rent, including external simple leasing, and chartering, with a term exceeding 360 (three hundred and sixty) days.

Sole paragraph. The registration of the contracts referred to in this article is the responsibility of the individual or legal entity resident, domiciled or with headquarters in the Country that enters into the mentioned contracts.

Art. 2 The registration referred to in this Regulation must be carried out in the Electronic Declaratory Registration system, Financial Operation Registration module (RDE-ROF), of Sisbacen.

Art. 3 The registration of contracts for the use or cession of patents, of industrial or commercial trademarks, of supply of technology and of other contracts of the same kind, as well as contracts for the provision of technical assistance and franchise services, must only be carried out after the annotation of the contract at the National Institute of Industrial Property (INPI).

Sole paragraph. Complementary technical services and expenses linked to the operations described in the caput of this article are also subject to registration, even if they are not subject to annotation at INPI.

Art. 4 For the purposes of this Regulation, external operational leasing must observe the following rules:

I - the counterpayments must contemplate the cost of leasing the good and the services inherent to its placement at the disposal of the lessee, with the present value of payments not exceeding 90% (ninety percent) of the cost of the good;

TITLE: TRANSITORY PROVISIONS – 29 Page 2 of 2
CHAPTER: Non-Code Resolutions - 1
SECTION:
Resolution No. 3,844, of 23.3.2010.

II - the contractual term must be lower than 75% (seventy-five percent) of the useful life of the good; III - the price for the exercise of the purchase option must correspond to the market value of the leased good; and IV - the contract cannot contain a provision for the payment of a guaranteed residual value.

Art. 5 The provisions of arts. 23 and 24 of Annex Regulation II apply to external operational leasing.

Art. 6 Early settlement of external obligations related to the operations referred to in this Regulation is permitted.

TRANSITIONAL PROVISIONS – 29 Page 1 of 1
CHAPTER: Non-Codified Resolutions - 1
SECTION:
Resolution No. 3,844, of March 23, 2010.

REGULATION ANNEX IV TO RESOLUTION NO. 3,844, OF MARCH 23, 2010 GUARANTEES PROVIDED BY INTERNATIONAL ORGANIZATIONS

Art. 1. This Regulation provides for the electronic declaratory registration, at the Central Bank of Brazil, of guarantees provided by international organizations of which Brazil is a participant, in credit operations carried out in Brazil, between legal entities domiciled or headquartered in the Country.

Sole paragraph. Financial institutions are authorized to accept, in their credit operations, the guarantees referred to in this article.

Art. 2. The registration referred to in this Regulation must be carried out, upon signing the guarantee provision contract, in the Electronic Declaratory Registration system, Financial Operation Registration module (RDE-ROF), of Sisbacen.

Art. 3. The responsibility for the registration referred to in this Regulation lies with the debtor of the internal credit operation.

Art. 4. For the purposes of this Regulation, the beneficiary of the resources entering the Country to fulfill the guarantee is considered to be the creditor of the internal operation who, on the date of the transfer by the external guarantor, is duly identified.

Art. 5. The validity period of the registration referred to in Art. 1 is equal to the maximum period provided for the fulfillment of the guarantee.

Art. 6. The entry of resources into the Country, to fulfill the guarantee, makes the external operation effective, for registration purposes.

Sole paragraph. In the case provided for in the caput, the registration must be carried out in the currency in which the effective entry of resources occurred.

Art. 7. Regardless of the currency referred to in the sole paragraph of Art. 6, the transfer abroad, supported by the registration, of the value in foreign currency corresponding to the amount, in national currency, of the credit and the legal and conventional additions in which the guarantor who fulfills the guarantee is subrogated, is permitted.

REGULATION ANNEX V TO RESOLUTION NO. 3,844, OF MARCH 23, 2010 CAPITAL IN NATIONAL CURRENCY – LAW NO. 11,371, OF NOVEMBER 28, 2006

Art. 1. This Regulation provides for the electronic declaratory registration, at the Central Bank of Brazil, of foreign capital invested in legal entities in the Country, in accordance with Law No. 11,371, of 2006.

Art. 2. The registration referred to in this Regulation must be carried out in the following modules of the Electronic Declaratory Registration system, of Sisbacen:
I - Foreign Direct Investment (RDE-IED), in the case of foreign direct investment; II - Financial Operations Registration (RDE-ROF), for the other capitals.

§ 1. Capitalizations of profits and dividends, of interest on equity, and of profit reserves arising from the portion of capital registered in accordance with item I of the caput are also subject to registration, in accordance with this Regulation.

§ 2. The registration referred to in this Regulation must be preceded by authorization from the Central Bank of Brazil, in the case of investment in the share capital of financial institutions and other institutions authorized by it to operate.

Art. 3. Only foreign capital in national currency whose value appears in the accounting records of the Brazilian company receiving the foreign capital, in accordance with current legislation, must be registered, in accordance with this Regulation.

Sole paragraph. The ownership of the foreign capital must be proven by document.

Art. 4. The registration of foreign capital, in accordance with this Regulation, must occur, regardless of the date of its full payment, by the last business day of the calendar year following the annual balance sheet in which the legal entity is obliged to register the capital, observing, with regard to the capital existing on December 31, 2005, the provisions of § 2 of Art. 5 of Law No. 11,371, of 2006.

Sole paragraph. Registration is prohibited, in accordance with this Regulation, of foreign capitals subject to other modalities of registration, to which specific regulation applies, including regarding the deadline for registration and the application of penalties.

Art. 5. Those responsible for the registration, for the purposes of this Regulation, are:
I - in the case of foreign direct investment, the company receiving the investment and the representative, in the Country, of the foreign investor, indicated in the RDE-IED module;

II - in other cases, the borrower of resources abroad.

Art. 6. The provisions of Regulation Annex I, in the case of foreign direct investment, and of Regulation Annex II, in other cases, apply to the registration referred to in this Regulation, insofar as applicable.

This text does not replace the one published in the DOU and in Sisbacen.