1. São Paulo | Rio de Janeiro | Brasília | Curitiba | Porto Alegre | Recife London | Lisbon | Shanghai | Miami | Buenos Aires José Paulo Alves Pequeno Noronha Advogados São Paulo, 14 April 2008. Doing Business in Brazil Hurdles to overcome upon investing in the Brazilian market Dutch Brazilian Chamber of Commerce

2. 1.Corporate Vehicle a) wholly owned company b) branch 2.Joint Venture a) in general, a matter of convenience to business only b) focus on more corporate issues 3.Acquisition a) of shares b) of establishment c) Brazilian holding company A- INVESTMENTS STRATEGIES

3. B- INCORPORATION PROCEDURES 1.Overview a) can be a time consuming procedure: from 60 to 150 days to be completed b) possible improvements: unification of some of agencies data banks

4. B- INCORPORATION PROCEDURES 2.Steps a) Commercial Registry acquisition of the legal entity status b) Federal Tax Authority (CNPJ) first operational level c) State Tax Authority for trading and industrial companies only d) Municipal Tax Authority business license – services companies

5. B- INCORPORATION PROCEDURES 3.Other Registrations a) SISCOMEX – for companies engaged in foreign trade activities b) Official Agencies which govern regulated professions, for companies engaged in activities under these agencies overview. Examples: CREA, CRECI, CORE, etc. c) Central Bank of Brazil – for banks and financial institutions. d) State Environmental Agencies – for potentially polluting companies, e) Ministry of Health and Fito-sanitary agencies – for companies trading pharmaceuticals and cosmetics.

6. C- FORMS OF FOREIGN INVESTMENTS 1.Legal Definition of Foreign Capital: Any goods, machines and equipment coming into Brazil with no initial foreign currency expense, for the production of goods or services, as well as financial and monetary funds coming into Brazil to be invested in economic activities, provided that in both cases these assets belong to individuals or legal entities either domiciled or headquartered abroad. 2.Single Exchange Market: a) purchase or the sale of foreign currency ; b) national currency between residents in Brazil and residents abroad; c) transactions involving other exchange mechanisms, carried out through the intermediation of institutions authorised to operate in exchange.

7. C- FORMS OF FOREIGN INVESTMENTS 3.The Central Bank of Brazil and the Foreign Capital Special data system (SISBACEN) to register: a) direct investments and loans, whether in cash or goods; b) remittances effected as return of capital or as earnings of such capital, profits, dividends, interest, amortization, as well as royalties for payment of technical assistance, or by means of any other title which represent the transfer of earnings to a foreign country; c) reinvestment of foreign earnings; and d) capital increases of companies. Registration of foreign capital at the SISBACEN entitles the foreign investor to repatriate its investments or to receive earnings and dividends in foreign currency.

8. C- FORMS OF FOREIGN INVESTMENTS 4. Foreign Investments in Cash a) requires no prior authorization; b) funds used to pay up subscribed shares in a Brazilian company; c) funds sent through a financial institution authorized to operate in exchange; d) the RDE-IED number: representing the pair foreign investor – Brazilian recipient company e) 30 days deadline as of the exchange, for registration of the foreign funds. f) possibility of swapping credit for investment: symbolic exchange operation.

9. C- FORMS OF FOREIGN INVESTMENTS 5. Foreign Investments in Goods Imports without exchange cover must be registered at the Central Bank system within 90 days as of the entry of the goods, by the amount indicated in their pro-forma invoice. 6. Foreign Loans a) prior authorisation is required b) the RDE-ROF number: the pair lender – borrower c) cancellation of the RDE-ROF number if no funds enter the country within 60 days after its creation; d) 30 days as of exchange operation to register the loan e) two types of foreign loans: – cash loans; and – credit loans for importing goods

10. D- FOREIGN INVESTMENTS RESTRICTIONS 1. Acquisition of Rural Land and Frontier Area Real Estate a) the acquisition of rural land by foreign individuals or companies or Brazilian companies controlled by foreigners depend on the approval of INCRA (National Institute for Colonisation and Agrarian Reform) of an agricultural or cattle raising project. Moreover, the acquisition of rural properties above certain size requires the Congress approval as well. b) the border area consists of a strip of land 150 km wide which runs along the countrys borders. The acquisition of real estate properties within the border area can only be made after prior approval by the Brazilian national security authorities has been given.

11. D- FOREIGN INVESTMENTS RESTRICTIONS 2. Restrictions to Foreign Shareholding in companies engaged in some specific activities: a) written and broadcasting media: the foreign shareholding is limited to 25% of the voting capital b) cable televisions: the foreign shareholding is limited to 49% of the voting capital. c) transport companies: the foreign shareholding is limited to 20% of the companys capital. 3. Nuclear Energy Development by the Brazilian Government only.

12. NORONHA ADVOGADOS

13. THANK YOU! OBRIGADO! José Paulo Alves Pequeno jl@noronhaadvogados.com.br www.noronhaadvogados.com.br