FEES REGULATIONS

PUBLIC SPECIAL ECONOMIC DEVELOPMENT ZONES - ZDEEP

THE MINISTRY OF PUBLIC FUNDSTHE APPROVAL OF THE FEES REGULA-TIONS FOR THE PUBLIC SPECIAL ECONO-MIC DEVELOPMENT ZONES

MINISTERIAL AGREEMENT NUMBER 274-2019

Guatemala, June 19, 2019

WHEREAS:The Political Constitution of the Republic of Guatemala entitles to the Secretaries to exerci-se jurisdiction over all agencies of their depart-ments, as well as to rule, process, resolve and oversee all business related to their field and to look after the strict law enforcement.

WHEREAS: The norms contained in the “Fee Policy on Land Tenure of Public Special Econo-mic Development Zones” do not properly contain all aspects related to fees that are established in the “Regulations for authori-zing, entitlement and functioning the Public Special Economic Development Zones” that was approved by the Board of Directors of the Trade and Industrial Free Zone of Santo Tomas de Castilla -ZOLIC (after its Spani-sh name)- in the resolution of the Board of Directors No. 05/04/2019 on January 30, 2019.

WHEREAS:It is needed to count with provisions to regu-late the fees in the Public Special Economic Development Zones within the framework of the previously identified regulations. Thus, on April 8, 2019, the Board of Directors of the Trade and Industrial Free Zone “Santo Tomas de Castilla” - ZOLIC - when performing its duties as established in Article 16, items

c), l) and m) of the Decree number 22-73 of the Congress of the Republic of Guatemala, Organic Law of ZOLIC, issued on April 8, 2019, a resolution identified as J.D. No. 18/11/2019. That resolution approved the “Fees Regula-tion for the Public Special Economic Develo-pment Zones.” It presented the provisions to the Executive Branch through the Ministry of Public Funds in order to receive its approval by a Ministerial Agreement to set up the fees in Dollars of the United States of America and payable using that currency or its equivalent in quetzals, according to the exchange rate used for dollars. Thus, it is appropriate to issue the corresponding legal provision, following the utmost interest of the State. Thus, the publication must be costless.

THEREFOREThe duties are performed according to Arti-cle 194, items a) and f) of the Political Consti-tution of the Republic of Guatemala; Articles 22 and 22, item m) of the Decree number 11-97 of the Congress of the Republic; the Executive Organism Act; Article 2, items c), l), and m); Article 16 of the Organic Law of the Trade and Industrial Free Zone “Santo Tomás de Castilla”, Decree 22-73 of the Congress of the Republic; Article 6, item 6 of the Gover-nment Agreement number 11-2018, and the Internal Organic Regulations of the Ministry of Public Funds.

IT AGREES

THE APPROVAL OF THE FEES REGULATIONS FOR THE PU-BLIC SPECIAL ECONOMIC DEVELOPMENT ZONES

I, Ana Leticia Santos Calmo, Certified Sworn Translator, duly commissioned and qualified by the Republic of Guatemala to translate the English and Spanish languages according to Resolution No. 787-2006, Registry No. 518-10-06, issued by the Ministry of Education on September 29th, 2006, hereby CERTIFY: Having before me the MINISTERIAL AGREEMENT of the FEES REGULA-TIONS FOR THE PUBLIC SPECIAL ECONOMIC DEVELOPMENT ZONES, written in Spanish, which relevant contents translated into English to the best of my knowledge, read as follows: --------------

4

TITLE I

General Dispositions Chapter I

Article 1. Purpose. These Regulations are created with the purpose to regulate the different applica-ble frees for users, administrators, and ZDEEP staff who are involved in the functioning of the Public Special Economic Development Zones, called ZDEEP.

Article 2.Definitions: The following terms will be appli-cable within these Regulations:

a. ADMINISTRATOR: The person appoin-ted by ZOLIC; and individual or legal person in charge of any or all adminis-tration activity of a ZDEEP. This legal construct shall not be considered a user; therefore, will not enjoy the inherent fiscal benefits granted to ZDEEP. If it has no such administrator, ZOLIC will be able to assume such role at any moment.

b. REGULATION FOR AUTHORIZING, ENTITLEMENT, AND FUNCTIONING OF PUBLIC SPECIAL ECONOMIC DEVELO-PMENT ZONES: It may be abbreviated as ZDEEP Regulations.

c. FACTOR TABLE FOR THE ESTATE’S OWNER: It is a mechanism to establi-sh conditions that will rule operations of a ZDEEP, according to the following characteristics: 1. Economic activities the ZDEEP is engaged: industry, trade, and services; 2. Regional categories with the allocation of the 22 departments (territo-ries) of Guatemala; 3. Level categories -A, B, C, and D- of land tenure that will result into a percentage distribution of the fee

the Users will pay, that will correspond to the estate owner; it will range between 54% and 70% of the fee.

d. FACTOR TABLE OF ZOLIC: It is the resi-dual percentage of the fee the Users will pay, that will correspond to ZOLIC; it will range between 10% and 26% of the fee.

e. COMMERCIAL USER: Any individual exclusively engaged in merchandising, distribution, storing, preservation, fractio-ning, packaging, re-packaging, packing, re-packing, handling, labeling, cleaning, and any other operation in merchandi-ses of his/her property or under his/her responsibility to be imported into the national territory or to be exported.

f. SERVICE USERS: Those individuals who are entirely engaged in supplying services, including those provided within the Guatemalan territory to people who do not have a domicile or residence in the country.

g. INDUSTRIAL USER: Those individuals who are entirely engaged in manufactu-ring, producing, transforming, or assem-bling the merchandise.

h. PUBLIC SPECIAL ECONOMIC DEVE-LOPMENT ZONES: These are extra-cus-tom areas entitled to operate the Trade and Industrial Free Zone “Santo Tomas de Castilla” that are out of the perimeter outlined in the Regulating Plan of the Santo Tomas de Castilla Port. ZDEEP is the abbreviation.

i. TRADE AND INDUSTRIAL FREE ZONE “SANTO TOMAS DE CASTILLA”: Also known as ZOLIC, its abbreviation.

5

TITLE II

Chapter IApplicable Fees to ZDEEP Users

Article 3. Fee for ZDEEP Users entitled in Third-par-ty Estates. The users will pay the fee in the concept of a lease. The Board of Directors of ZOLIC will approve it by the Entitlement Resolution, grounded in Article 10 of the ZDEEP Regulations for each ZDEEP project in particular.

Fees and Terms

Article 4. Fee Allocation and Methodology. Fees set out in the previous article will be allocated in percentages, following the provisions given in the factor tables described in the items a) and b) of this article and that ZOLIC will pay accordingly to the Economic Activity, Regional Category - following the Human Development Index of Guatemala -, and Tenure area level per square meter - leased or sub-leased.

6

FACT

OR

TAB

LE L

EASE

PA

YMEN

T O

R O

NER

OU

S U

SUFR

UCT

Num

ber o

f ca

tego

ry

Cate

gory

1

Cate

gory

2

Cate

gory

3

Cate

gory

4

Alta

Ver

apaz

(0.3

70),

Hue

huet

enan

go (0

.399

) y

Chi

quim

ula

(0.4

08)

64%

62%

60%

62%

60%

58%

60%

58%

56%

58%

56%

5A%

66%

64%

62%

64%

62%

60%

62%

60%

58%

60%

58%

56%

68%

66%

64%

66%

64%

62%

64%

62%

60%

62%

60%

58%

70%

68%

66%

68%

66%

64%

66%

64%

62%

64%

62%

60%

Qui

ché

(0.4

24),

Jala

pa (0

.426

), To

toni

capá

n (0

.432

), Sa

n M

arco

s (0

.451

), So

lolá

(0.4

55),

Jutia

pa (0

.455

), B

aja

Vera

paz

(0.4

57),

Pet

én (0

.458

), Sa

nta

Ros

a (0

.470

), Su

chite

péqu

ez (0

.471

), R

etal

hule

u (0

.476

), Iz

abal

(0.4

81),

Chi

mal

tena

ngo

(0.4

87)

y Za

capa

(0.5

11)

Escu

intla

(0.5

16),

El

Prog

reso

(0.5

18),

Que

tzal

tena

ngo

(0.5

29)

y Sa

cate

péqu

ez (0

.567

)

Gua

tem

ala

(0.6

14)

Dep

artm

ents

of G

uate

mal

a (H

DI n

umbe

r in

brac

kets

fo

r eac

h te

rrito

rial d

ivis

ión)

Amou

nt in

US$

per

leas

e sq

uare

met

erAm

ount

in U

S$ p

er le

ase

squa

re m

eter

Amou

nt in

US$

per

leas

e sq

uare

met

er

REGIONAL CATEGORY

CATE

GO

RY B

ASE

D O

N T

ENU

RE

LEVE

L FO

R IN

DU

STRY

CA

TEG

ORY

BA

SED

ON

TEN

UR

E LE

VEL

FOR

CO

MM

ERCE

CATE

GO

RY B

ASE

D O

N T

ENU

RE

LEVE

L FO

R S

ERVI

CEFe

e Ty

pe D

Fee

Type

DFe

e Ty

pe D

Fee

Type

CFe

e Ty

pe C

Fee

Type

CFe

e Ty

pe B

Fee

Type

BFe

e Ty

pe B

Fee

Type

AFe

e Ty

pe A

Fee

Type

A

Bet

wee

n 1%

an

25%

Bet

wee

n 1%

an

25%

Bet

wee

n 1%

an

25%

Bet

wee

n 26

% a

n 50

%B

etw

een

26%

an

50%

Bet

wee

n 26

% a

n 50

%B

etw

een

51%

an

75%

Bet

wee

n 51

% a

n 75

%B

etw

een

51%

an

75%

Bet

wee

n 76

% a

n 10

0%B

etw

een

76%

an

100%

Bet

wee

n 76

% a

n 10

0%

Fee

for T

enur

esFe

e fo

r Ten

ures

Fee

for T

enur

es

a) Factor table for the estate owner:

7

FACT

OR

TAB

LE L

EASE

PA

YMEN

T O

R O

NER

OU

S U

SUFR

UCT

Num

ber o

f ca

tego

ry

Cate

gory

1

Cate

gory

2

Cate

gory

3

Cate

gory

4

Alta

Ver

apaz

(0.3

70),

Hue

huet

enan

go (0

.399

) y

Chi

quim

ula

(0.4

08)

16%

18%

20%

18%

20%

22%

20%

22%

24%

22%

24%

25%

14%

16%

18%

16%

18%

20%

18%

20%

22%

20%

22%

24%

12%

14%

16%

14%

16%

18%

16%

18%

20%

18%

20%

22%

10%

12%

14%

12%

14%

16%

14%

16%

18%

16%

18%

20%

Qui

ché

(0.4

24),

Jala

pa (0

.426

), To

toni

capá

n (0

.432

), Sa

n M

arco

s (0

.451

), So

lolá

(0.4

55),

Jutia

pa (0

.455

), B

aja

Vera

paz

(0.4

57),

Pet

én (0

.458

), Sa

nta

Ros

a (0

.470

), Su

chite

péqu

ez (0

.471

), R

etal

hule

u (0

.476

), Iz

abal

(0.4

81),

Chi

mal

tena

ngo

(0.4

87)

y Za

capa

(0.5

11)

Escu

intla

(0.5

16),

El

Prog

reso

(0.5

18),

Que

tzal

tena

ngo

(0.5

29)

y Sa

cate

péqu

ez (0

.567

)

Gua

tem

ala

(0.6

14)

Dep

artm

ents

of G

uate

mal

a (H

DI n

umbe

r in

brac

kets

fo

r eac

h te

rrito

rial d

ivis

ión)

Amou

nt in

US$

per

leas

e sq

uare

met

erAm

ount

in U

S$ p

er le

ase

squa

re m

eter

Amou

nt in

US$

per

leas

e sq

uare

met

er

REGIONAL CATEGORYCA

TEG

ORY

BA

SED

ON

TEN

UR

E LE

VEL

FOR

IND

UST

RY

CATE

GO

RY B

ASE

D O

N T

ENU

RE

LEVE

L FO

R C

OM

MER

CECA

TEG

ORY

BA

SED

ON

TEN

UR

E LE

VEL

FOR

SER

VICE

Fee

Type

DFe

e Ty

pe D

Fee

Type

DFe

e Ty

pe C

Fee

Type

CFe

e Ty

pe C

Fee

Type

BFe

e Ty

pe B

Fee

Type

BFe

e Ty

pe A

Fee

Type

AFe

e Ty

pe A

Bet

wee

n 1%

an

25%

Bet

wee

n 1%

an

25%

Bet

wee

n 1%

an

25%

Bet

wee

n 26

% a

n 50

%B

etw

een

26%

an

50%

Bet

wee

n 26

% a

n 50

%B

etw

een

51%

an

75%

Bet

wee

n 51

% a

n 75

%B

etw

een

51%

an

75%

Bet

wee

n 76

% a

n 10

0%B

etw

een

76%

an

100%

Bet

wee

n 76

% a

n 10

0%

Fee

for T

enur

esFe

e fo

r Ten

ures

Fee

for T

enur

es

b) Factor table for ZOLIC:

8

c) Estate owner.Between 54% - 70% of the fee.

d) Administrator. 20% of the fee to cover administrative fees referred in Articles 49 and 51 of the ZDEEP Regulations.

e) ZOLIC. Between 10% - 26% of the fee. The income will be used for implementing infrastruc-ture projects, technology, advertising, and marketing that boosts the quality of the services provided by ZOLIC in the different ZDEEP.

f) Methodology. Steps to determine the percentages esta-blished in the Factor Tables described in items a) and b), which are:

f.1 Assign a regional category; it will depend on the estate location where the ZDEEP will be entitled.

f.2 Define the number of square meters of the entire entitled ZDEEP that will be tenured by the users.

f.3 Measure the tenure level of the ZDEEP. This factor estimation will proceed as follows: on the last day of the month, the ZDEEP administra-tor will generate a report to establish the number of square meters that are tenured; the formula to apply is the following:

ZDEEP Tenure Level:

leased meters2

number of meters2 authorized for lease or sub-lease

f.4 According to the result, determi-ne the tenure level for each economic activity in the factor table.

f.5 By applying the formula below,

ZOLIC will determine the compensa-tion amount that shall pay to the esta-te owner:

Compensation =((user fee * %of industry*

m2of industry)

(user fee * % of commerce* m2 of commerce)

(user fee * %of service m2of service))

+

+

Article 5. Fees for ZDEEP users in estates owned by ZOLIC. When a ZDEEP is established in a ZOLIC estate, current fees regulated in the Regulations of the Trade and Industrial Free Zone “Santo Tomas de Castilla” will apply. The concept of the charge to users will be Rent of Roofing and Uncovered Areas.

Article 6. Division or Partition of the Real Estate. Based upon Article 13 of the ZDEEP Regu-lations, where a user contracts the estate where it will operate, the user will beco-me liable to fulfill with the rent payment. Likewise, the percentage established in Article 4, item c) herein, will be applied.

9

Article 7. Fee payment term of the ZDEEP users. After becoming entitled as a user, he/she shall pay the rent fee, monthly and upfront, during the first five work days of the month. Failure to this provision will be sanctioned by Article 15 of these Regulations.

Article 8. IT System. Based on the rules given in Arti-cles 3, item e); 17, items l) and m); and, 49 of the ZDEEP Regulations, the User shall pay the license costs and annual continuing license fees.

Chapter IIApplicable Fees to ZDEEP

Article 9. ZDEEP entitlement fees. It includes the one-time payment to ZOLIC which purpo-se is to cover additional costs to acquire the ZDEEP entitlement status. The fee will be established after ZOLIC determines the cost of the Evaluation Committee and the Physical Inspection of the Estate according to the following formula:

+

Entitlement cost =

[(Evaluation Committee Cost)

(Cost of Physical Inspection of Estate)]

a) Evaluation Committee Fee. It will be estimated as the hour/individual cost of each individual who takes part in the Committee according to the correspon-ding appointment; it will be the total sum of effective worked hours per each:

Formula:

Evaluation Committee Cost = (Hour individual cost *

∑number of hours)

b) Physical Inspection Fee of the Estate. It will be estimated based on the travel expenses assigned to the staff that has been duly appointed, and who will carry out the inspection according to the current norms. The fee will also include the driver’s travel expenses, fuel, and depreciation of vehicles used in the Physical Inspection of the Estate. It will take into consideration:

Physical Inspection of Estate =

(∑travel expense of assigned staff + Depreciation + Fuel)

Where: ∑ Travel expenses of appointed staff = amount allocated to each individual, according to the current norms

Depreciation =

Fuel =

Vehicle Cost

Travelled distance (km) for physical inspection to estate

Fuel performance KM/Gl

Travelled distance (km) for physical

inspection to estate

fuel price

)

))

)Km of useful life of

vehicle

*

*

The fuel estimation will take as reference the “Prices of the National Fuels” chart that is uploaded in the website of the Ministry of Energy and Mining on the date the Physical Inspection is carried out.

10

Chapter III

Applicable Fees to the Administrator

Article 10. ZDEEP user’s entitlement fees. The fee includes the amount the ZDEEP adminis-trator will pay to ZOLIC after the Entitle-ment Resolution of ZDEEP Users has been issued, and after the Entitlement contract of ZDEEP Users has been signed. The esti-mation shall consider the cost ZOLIC may pay for the users authorizing and entitle-ment process. Therefore, it will be estima-ted from the hour/individual cost of each professional who takes part in the Commit-tee, and the sum of effective worked hours per each member:

Evaluation Committee Cost = (Cost hours individual*

∑number of hours)

ZOLIC shall determine the ZDEEP Users Entitlement cost and will inform it to the Administrator.

Article 11. Control and Supervision Fee. The ZDEEP Administrator shall monthly pay to ZOLIC in concept of control fees, according to Arti-cle 3, item f); Article 17, item i) of the ZDEEP Regulations, the amount of US$ 640.00 (Dollars of the United States of America) or its equivalent in local currency, per person, according to the exchange rate given by the National Bank of Guatemala. The mini-mum number of people is three (3) accor-ding to the following estimation:

Monthly cost= (Unit cost per person *

Number of appointed staff)

Where:

Number of individuals

40 hours worked in a week

US$ 640.00

3

5

7

80 hours worked in a week

120 hours worked in a week

Minimum number of people

Working schedule of ZDEEP

Monthly unit cost per individual

Article 12. Physical Inventory Fee. ZOLIC will charge a fee for carrying out the physical inven-tory, as stated in Article 39 of the ZDEEP Regulations. It will be estimated taking into consideration the travel expenses assigned to the staff responsible for that duty, plus fuel and depreciation of vehicles. When the physical inventory is complete, ZOLIC will inform the Administrator about the cost, considering the formulas below, it will be effective when the inventory ends. The physical inventory shall be performed once a year, at the very least.

Formula:

Inventory fees =(∑travel expenses of appointed staff +

Depreciation + Fuel)

11

Where:∑ Travel expenses of appointed staff = amount allocated to each individual, according to the current norms

Depreciation =Vehicle Cost

Travelled distance in Km

))

Km of useful life of vehicle

*

Fuel =

Travelled distance in KmFuel performance

KM/GL

Fuel Price))

*

Article 13. ZOLIC as Administrator. When ZOLIC assu-mes the administration of a ZDEEP entitled in a third-party estate, the provision of Article 4, item d) of these present Regulations will be applied.

Chapter IVApplicable Fees to ZOLIC

Article 14. Liabilities. ZOLIC shall pay to the estate owner and the administrator, the provi-sion of Article 4, items c) and d) of these Regulations. Payments referred in this arti-cle will be paid after delivering the closing report on the incomes received. The admi-nistrator shall present the report to ZOLIC within the five (5) work days of the following month. ZOLIC shall have five (5) work days once receives the closing report. shall pay to the estate owner and the administrator, the provision of Article 4, items c) and d) of these Regulations. Payments referred in this article will be paid after delivering the closing report on the incomes received. The administrator shall present the report to ZOLIC within the five (5) work days of the following month. ZOLIC shall have five (5) work days once receives the closing report.

I= P * i * t

Title III

Sanctions Sole Chapter

Article 15. Sanctions. When payments of the fees described in these Regulations are behind, ZOLIC will claim 5% as a monthly interest in the concept of arrears, from the first late day, following the formula below and without the need of requesting for it. Such provision shall be drawn in the correspon-ding contracts.

Where:

I= interest P= amount of payment due i= 0.05 monthly T=number of days delayed

12

Title IV

Sole Chapter

Article 16. Administrative Special Fees. According to the provision in Article 51 of the ZDEEP Regulations, the Board of Directors will approve special fees the users must pay in the case of an unforeseen and inevita-ble situation or circumstance, a fortuitous case or force majeure. These fees shall be allocated proportionally among the authorized users.

Article 17. Amendments to the Fees Regulations for the Public Special Economic Develo-pment Zones. In compliance to the provi-sions of Articles 55 of ZDEEP Regulations; Article 16, item l) of the Decree 22-73 of the Congress of the Republic of Guatema-la; and the Organic Law of ZOLIC, the fees may be revised and modified time to time. To this effect, the General Management of ZOLIC shall file the Amendment Proposal to the Board of Directors before submit-ting it for its legal proceedings of approval before the Executive Organism through the Ministry of Public Funds. The users shall be informed with one month notice about the applicable, updated fees. Such provi-sion shall be drawn in the corresponding contracts.

Article 18. Unexpected Cases. The cases out of these Regulations shall be resolved by the Board of Directors following the current norms.

Article 19. Exemption Clause. All norms or provisions of any kind which contravene the provi-sions of these Regulations are repealed.

Article 20. Validity. These Regulations will be valid eight days after its publication in the Diario de Centro América (Official Journal of Guatemala).

Final and Transitory Provisions

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