Argentina is one of the largest economies in Latin America with a GDP of US$518.4 billion in 2018. Acknowledging the current complexity of its legal system, the government is working to reduce bureaucratic processes for those wishing to start a business in Argentina. According to the World Bank Group, Argentina’s efforts to streamline its institutional functions through adopting digital processes has reduced wait times for activities such as obtaining import and export licenses.
With a growing middle class and highly educated citizens, Argentina is considered one of the important investment destinations in the region for entrepreneurs. Those interested in operating commercially in the country must first understand the legal steps involved to start a business in Argentina.
Start a business in Argentina
The process to start a business in Argentina will depend on the type of entity or legal structure you choose to use.
In general terms, the steps that we will mention below are the most common in the business creation process. However, it should be taken into account that for some entities additional information or procedures will be necessary.
1. Define the legal structure of your company
Before starting your business in Argentina, it is necessary to be clear about the type and business plan that you want to carry out. This will help you decide which legal entity in Argentina will give you the right governance structure.
The Argentine Companies Law offers for several different types of legal entities for entrepreneurs to start a business with, each with particular characteristics. You’ll need to identify which one is best suited for your governance needs and intended commercial activities.
The most common types of legal entities in Argentina are:
- Simplified Joint Stock Company (Sociedad por Acciones Simplificadas, or SAS): a popular choice due to the requirement to have only one shareholder, and low minimum share capital of approximately US$600. Full foreign ownership is allowed
- Public Limited Company (Sociedad Anónima, or SA): with this legal entity, you can raise capital through issuing public shares
- Limited Liability Company (Sociedad de Responsibilidad Limitada, or SRL): Limited Liability Companies protect personal assets from company liability.
Choose carefully, as this will affect how you do business in Argentina.
2. Appoint a Power of Attorney
Next, you’ll need to draft and sign a document for Power of Attorney in Argentina, to allow a legal expert to form the company on your behalf.
In some cases, especially when you or your company’s partners do not reside in the country, it will be necessary to write and sign the Power of Attorney to an external local lawyer who can form a company in Argentina.
The purpose of the document is to grant all the powers required to a lawyer in Argentina so that this person can represent you and your business through the company formation process, and ensure you can legally do business in Argentina.
3. Choose and reserve your company name (optional)
It’s a good idea to choose and reserve your company name in Argentina, to ensure you get the name you want to do business under.
The General Inspection of Justice (Inspección General de Justicia or IGJ) manages this process, and is responsible for verifying the name of the company. In case you wish to reserve the name of your business in Argentina, you must make a request to the IGJ by filling out a form through the website and making the respective payments.
4. Write and certify the bylaws or social contract
Your company’s bylaws, also known as a social contract, act as the ‘constitution’ of your company, and outline your commercial intentions. All company shareholders must sign this document. You will also need to certify these signatures through a Public Notary.
These bylaws must be registered with the Public Registry of Commerce in order to create your company in Argentina.
Other documentation required
The Public Registry of Commerce will require you to present the company bylaws, plus additional documents such as:
- Prequalification opinion (Legal document (mandatory) prepared by a registered lawyer)
- Proof of publication in the “Official Gazette”
- Proof of acceptance of the position by the manager / Director
- Support of the capital deposit in the Bank of the Argentine Nation
- Documentation proving the constitution of the guarantee to be provided by the head managers
- Proof of payment of fees and amounts
- Translations (if applicable)
- Affidavits of Politically Exposed Person of Representatives and/or Administrators.
- Affidavit of Final Beneficiary.
5. Initial deposit of share capital in the National Bank
In Argentina, a new business must make a deposit of at least 25% of the capital subscribed to the Bank of the Argentine Nation. You must obtain proof of payment for this transaction.
You can also present the estimated amount in cash to a Notary who certifies that amount. Please note that this deposit can be withdrawn once the company’s bylaws are registered with the Public Registry of Commerce.
6. Publish the creation of your company
Next, you’ll need to make a public announcement of your new business in Argentina through a national publication known as the Official Gazette.
Only a registered lawyer or another authorized individual can carry out this step. Note that the Official Gazette charges per line published, at a value of AR$169 (approximately US$2.90) per line.
7. Payment of incorporation fee
You must pay a fee for the forms and processing costs when submitting the required documents for starting your business in Argentina. This process is carried out through the website of the Ministry of Justice and Human Rights.
In this platform you must download the invoice that must be settled at the Banco de la Nación in Argentina. The paid invoice is then presented to the Public Registry of Commerce.
8. Register the company books
To create a company in Argentina, you must register the accounting books (journal, inventory and balance) in addition to other books that contain the minutes of the meeting, board minutes, records of actions, deposits of shares and attendance at meetings.
These books must be submitted to the Public Registry of Commerce to be formalized. In most cases, the Public Registry of Commerce delivers some of these certified books directly.
9. Obtain Unique Tax Identification Code (CUIT) and registration in social security
To obtain the Unique Tax Identification Code (CUIT), you must present yourself to the Federal Public Revenue Administration (Administración Federales de Ingresos Públicos, or AFIP) unit located at the company’s fiscal address. You must present proof of registration of the company before the Public Registry of Commerce and other related documentation.
Once the CUIT is obtained, the registration of taxes and social security can be done through the AFIP page, entering through the profile of the Administrator or Manager of the company.
It is important to keep in mind that the partners and legal representatives or administrators of the company must have previously obtained their own Fiscal Code (CUIT), or the equivalent for foreigners (CDI) in the National Public Revenue Administration.
Through AFIP, the company must register for all relevant corporate taxes. Please note that you must also register with the General Revenue Department to report your local taxes. The relevant local taxes for your business in Argentina will depend on the address where your company is registered.
10. Open a corporate bank account
Finally, your business will need a corporate bank account, to make commercial transactions.
Required documentation may differ slightly from bank to bank in Argentina. Generally speaking, you’ll need to provide identification of your business’ shareholders and details of your new business to open your corporate bank account and start your business in Argentina.
Thankfully, you don’t need to travel to Argentina for this step. By partnering with a local legal and accounting expert in Argentina, you can have this step taken care of for you while you’re out of the country, if necessary.
Start a business in Argentina with Biz Latin Hub
For investors interested in starting a business in Argentina, it is important to know the essential legal steps of the company formation process.
Seeking help from a local team can avoid problems or delays in the processes of starting a business in the country and ensure that all legal and regulatory requirements of Argentina are met.
Biz Latin Hub has an experienced team that for more than 5 years has provided support to foreign investors and companies that have decided to enter the Argentine market. We offer a set of personalized market entry and back-office services providing a comprehensive approach to its expansion in Argentina.
For more information on how to create a company in Argentina or for personalized assistance, contact us through [email protected].
Learn more about our team and expert authors, and check out our short presentation below on why you should consider doing business in Argentina.