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World Investment Directory 2004: Latin America and the Caribbean

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The World Investment Directory series of UNCTAD is an attempt to centralize in the United Nations data-gathering efforts to measure systematically FDI, the activities of TNCs and related variables. Accordingly, the purpose of the World Investment Directory and its database is to assemble comprehensive data and information on FDI, operations of TNCs, basic financial data on the largest TNCs, the legal framework in which such investment takes place and selected bibliographic information about FDI and TNCs in individual countries. This publication covers 36 economies of Latin America and the Caribbean, providing data on both inward and outward flows and stocks of FDI, operations of TNCs, and basic information on the largest TNCs in and from these countries, as well as information on the regulatory framework affecting FDI.

A. Definitions and sources of data
The Foreign Capital and Exchange Department (Decec) of the Brazilian Central Bank (Bacen) is responsible for the registration, supervision and follow-up of foreign direct investment (FDI) in Brazil.
FDI in Brazil is defined as imports of goods, machinery and equipment into the country without any initial disbursement of foreign exchange, or of financial or monetary resources for use in economic activities. In both cases, the resources should belong to natural or juridical persons resident, domiciled or headquartered outside of Brazil.
FDI stock and flows before 1995 were compiled with data from the registry of FDI in the Central Bank. From 1996 up to 2000, data on foreign exchange transactions are used and only those investments larger than $10m over a year in a single company are considered.
From 2001 onwards, all investment amount is taken into account. FDI inflows include investment in assets, disbursements of foreign exchange, conversion of external credits into investments and conversion into investments of other assets belonging to residents abroad.
Short- and long-term loans between parent companies and their local subsidiaries, as well as other related credit made available from the country of origin of the investment, are not classified as direct investment. The amount of intra-company loans is nevertheless available among the information collected through the Census.
FDI stock data are calculated on the basis of the 1996 and 2001 Census of Foreign Capitals in Brazil, and updated using data from inflows collected through data on foreign exchange transactions.
Reinvestment is defined as the returns produced by enterprises established in the country, attributable to persons resident or domiciled abroad, which were reutilized in the same enterprises that produced them or in another sector of the economy. The Central Bank of Brazil defines reinvestment in another sector of the national economy as the reutilization of profits in enterprises other than the original one, provided that:
a) they are not used in activities considered to be speculative, such as stock exchange transactions and real estate transactions;
b) it is proven that reinvestment permits the beneficiary enterprises to develop new technology and to increase their roll-over capital.
The flows of Brazilian investments abroad are calculated on the basis of foreign exchange transactions. The stock data are collected annually through the Brazilian Capital Abroad Survey.
C. Legal framework for FDI
I. National Framework
Foreign Capital Investment Law No. 4131 of 3 September 1962
Source: World Intellectual Property Organization (WIPO), Industrial Property and Copyright Laws
and Treaties, No. 4, April 1974 (English translation), 27 September 1962
Amendment: Law No. 4390 of 29 August 1964, (effective 11 September 1964)
Source: Ibid., 11 September 1964
Foreign Capital Executive Decree No. 55762 of 17 February 1965 as amended, implementing Law
No. 4131 1962 in its amended version, (effective 18 February 1965)
Sources: Ibid., 18 February 1965, p. 21
Law No. 5772 of 21 December 1971 on Industrial Property, (effective 31 December 1971)
Source: Ibid., 31 December 1971
Industrial Property Law 1996, covering Patents and Trademarks
Source: The National Law Centre for Inter-American Free Trade,, 24
Feb 2004
Executive Decree No. 93075 of 6 August 1986 on Foreign Ownership of Real Estate
Source: Diario Official, (Official Gazette) 7 August 1986
The Constitution of the Federative Republic of Brazil 1988, Title II, Chapter I (Individual and
Collective Rights and Duties)
Source: WIPO, op. cit., No. 6, June 1989 (English translation)
Decree No. 96758 of 22 September 1988 implementing Decree Law No. 2452 of 29 July 1988,
(effective 23 September 1988)
Source: Banco Central do Brasil, Capitals Estrangeiros no Brasil-Legislaçao, June 1989 Diario
Official, (Official Gazette)
Decree Law No. 2452 of 29 July 1988 on Export Processing Zones, (effective 30 July 1988)
Source: Banco Central do Brasil, Capitals Estrangeiros no Brasil-Legislaçao, op. cit.
The Constitution of the Federative Republic of Brazil of 5 October 1988, Title II, Chapter I (Individual
and Collective Rights and Duties)
Source: World Intellectual Property Organization (WIPO), Industrial Property and Copyright Laws
and Treaties, No. 6, (June 1989) (English translation)
Decree No. 96758 of 22 September 1988 implementing Decree Law No. 2452 of 29 July 1988,
(effective 23 September 1988)
Source: Banco Central do Brasil, Capitals Estrangeiros no Brasil-Legislaçao, June 1989 Diario
Official, (Official Gazette)
Decree Bo. 288 of 28 Feb 1967 amending the provisions under Law No. 3.173 of 1957 regulating the
Manaus Free Trade Zone
Source:, 24 Feb 2004
Decree Law No. 2452 of 29 July 1988 on Export Processing Zones, (effective 30 July 1988)
Source: Banco Central do Brasil, Capitals Estrangeiros no Brasil-Legislaçao, op. cit.
Amendment: Law 8396 of 2 January 1992
Source: Diario Oficial, (Official Gazette) 6 January 1992
Decree No. 96036 of 12 May 1988, implementing Law No. 7646 of 18 December 1987, (effective 16
May 1988)
Source: Ibid., 16 May 1988
Resolution No. 1901 of 29 January 1992 of "Banco Central de Brasil"
Source: Diario Official, (Official Gazette) 31 January 1992
Law No. 8.031 on the National Privatization Programme 1990
Amendment: Law 9.491 1997
Amendment: Law 9.635, 1998
Source:, 24 Feb 2004
Arbitration Law 1996
Source: Ibid
Law No. 8402 of 8 January 1992 reinstating Fiscal Incentives for Industry
Source: Diario Official, (Official Gazette), 9 January 1992
Law No. 8383 of 30 December 1991 on the Fiscal Incentives for Industry
Source: Ibid., 31 December 1991
Law No. 8177 of 1 March 1991 on Deindexation of the Economy
Source: Ibid., 4 March 1991
Provisional Measure No. 276 of 5 December 1990 on Protection of Free Competition
Source: Ibid., 6 December 1990
Law No. 8158 of 8 January 1991 on Protection of Free Competition
Source: Ibid., 9 January 1991
Regulated by: Decree 36 of 14 February 1991
Source: Ibid., 15 February 1991
Law No. 8031 of 12 April 1990 creating the National Privatization Program in order to
encourage productive investments and to strengthen stock markets
Source: Ibid., 13 April 1990
Regulated by: Decrees 99463 and 99464 of 16 August 1990
Source: Ibid., 17 August 1990
Decree No. 99179 of 15 March 1990 concerning the Federal Deregulating Program on
reducing Government intervention and encouraging a free enterprise market
Source: Ibid., 16 March 1990
Decree S/N on Foreign Participation of Companies in Stock Exchange 2001
Source:, 24 Feb 2004
Decree 3.756 stating provisions concerning the Chamber of Exports
Source: Ibid
Law 10.303 on Public Honored Companies 2001
Source: Ibid
Law 10.184 on Concessions for Financial Exports 2001
Source: Ibid
Law 9.841 on Small and Medium Enterprises 1999
Source: Ibid
Law 9.317 concerning Tax on Small and Medium Enterprises 1996
Source: Ibid
Law 8.955 on Franchise Agreements 1994
Source: Ibid
Law No. 7713 of 22 December 1988 on Income Tax
Source: Ibid., 16 December 1988
Amendment: Law 8,218 of 29 August 1991
Source: Ibid., 30 August 1991
Source: Ibid
Law No. 9.532 on Taxes 1997
Source: Ibid
Law No. 8.191 concerning Tax on Industrial Products 1991
Source: Ibid
Law No. 6.704 on Export Credit Insurance 1979
Amendment: Law 10.659 2003
Source: Ibid
Law No. 9.613 on Money Laundering
Source: Ibid
Law No. 5988 of 14 December 1973 on the Rights of Authors and Other Provisions (Copyright Law)
Source: WIPO, No. 4 (April1974)
Amendment: Law No. 7123 of 12 September 1983
Source: Ibid., 13 September 1983
Normative Act No. 15 concerning the Registration of Contracts Providing for the Transfer of
Technology a Related Agreements 1975, (effective 16 September 1975)
Source: Registry of Industry Property No. 256 of 16 September 1975, WIPO, op. cit., p. 49 (English
Law No. 7646 of 18 December 1987 on the Protection of the Intellectual Property in Computer
Programs, on their Marketing within the Country and Introducing Other Measures; effective 22
December 1987
Source: Legislaçao e Normas (Ministry of Culture, National Copyright Board (CNDA), Brasilia,
1988), p. 62; WIPO, op. cit.
Law No. 9.456 on Intellectual Property 1997, (effective 15 May 1997)
Amendment: Law No. 10.196 2001
Source:, 24 Feb 2004
Law No. 7232 of 29 October 1984 on the National Informatics Policy, (effective 29 Dec 1984)
Source: Ibid.
Law No. 8.248 ordering the Capacity and Competitiveness of the Computer and Automation Sector
Source: Ibid
Law No. 9610 on Copyrights 1998
Source: Ibid
Law No. 9472 the General Telecommunications Law 1998
Source: Ibid
Decree No. 2.335 creating and Regulatory Agency for Electricity 1997
Source: Ibid
Decree 2.455 creating a Regulatory Agency for Petroleum 1998
Source: Ibid
Law No. 7804 of 18 July 1989 on the National Environment System
Source: Ibid
Law No. 9.605 of 12 Feb 1998 determining the Penal and Administrative Sanctions arising from
Environment Infringement
Source: Ibid
II. International Framework
1. Multilateral and regional instruments:
Paris Convention for the Protection of Industrial Property, 1995
Source:, 24 Feb 2004
Convention establishing the Multilateral Investment Guarantee Agency (MIGA) of 11
October 1985
Source: Depository of the original convention: World Bank; International Legal Materials, vol. XXIV
(November 1985), p. 1505
Law 170 ratifying Agreement on Trade-Related Aspects of Intellectual Property Rights 1994,
(effective 1 January, 1995)
General Agreement on Trade in Services 1994, (effective 1 January, 1995), Fourth Protocol to the
General Agreement on Trade in Services 15 February 1997, Fifth Protocol to the General Agreement
on Trade in Services 12 December 1997
The ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social
Policy, adopted 16 November 1977
Southern Cone Common Market - Mercosur Trade Agreement 1991
ALADI, Latin American Integration Association established by the Treaty of Montevideo 1980,
(effective March 1981)
2. Bilateral treaties
Bilateral treaties for the avoidance of double taxation with United States 1929 (Air and Sea Transport),
Japan 1967 (Income and Capital), United Kingdom 1967 (Air and Sea Transport), France 1971
(Income and Capital), Portugal 1971 (Income and Capital), Belgium 1972 (Air and Sea Transport),
Finland 1972 (Income and Capital), Denmark 1974 (Income and Capital), Spain 1974 (Income and
Capital), Austria 1975 (Income and Capital), Germany 1975 (Income and Capital), Sweden1975
(Income and Capital), Italy 1978 (Income and Capital), Luxembourg 1978 (Income and Capital),
Argentina 1980 (Income and Capital), Norway 1980 (Income and Capital), Ecuador1983 (Income and
Capital), Philippines 1983 (Income and Capital), Canada 1984 (Income and Capital), Czech Republic
1986 (Income and Capital), Hungary 1986 (Income and Capital), Slovakia 1986 (Income and Capital),
India 1988 (Income and Capital), Korea, Republic of 1989 (Income and Capital), Netherlands 1990
(Income and Capital), China 1991 (Income and Capital), Finland 1996 (Income and Capital), United
States 1997 (Air and Sea Transport), Paraguay 2000 (Income), Portugal 2000 (Income), Chile 2001
(Income and Capital), Portugal 2001 (Income and Capital), Belgium 2002 (Income and Capital), Israel
2002 (Income and Capital)
Source: UNCTAD database on BITs and DTTs
Bilateral investment treaties for the protection and promotion of investments with Chile 1994, Portugal
1994, Switzerland 1994, United Kingdom 1994, Denmark 1995, Finland 1995, France 1995, Germany
1995, Italy 1995, Korea, Republic of 1995, Venezuela 1995, Cuba 1997, Netherlands 1998, Belgium /
Luxembourg 1999
Source: UNCTAD database on BITs and DTTs
D. Sources of information
1. Central Bank of Brazil:
2. Investe Brasil:
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