In this article, we will be having a close look at the advantages of the Simplified Share Company(SAS) in Argentina.This new type company will change the Argentinian business structure, inviting many investors and foreign entrepreneurs to invest in business opportunities in Argentina. Subsequent to the various political and economic reforms, it is time for Argentina to look forward and pursue its strategic turn towards globalization.
The aim of the recent enactment of law 27.349 aims to “support the entrepreneurial activity in the country and its international expansion, as well as the collection of entrepreneurial capital in Argentina”. The tool was not only implemented for entrepreneurs and small and medium-sized enterprises (SMEs) but also for any investor intending to set up a company in Argentina.
Different Types of Companies in Argentina
Before the implementation of this new type of company, Argentina had two categories of companies: Public Limited Company(PLC), suited for larger companies, and the Limited Liability Company (LLC), for smaller businesses. A third category was later created in an attempt to boost business development, the Unipersonal Corporation (Sociedad Anonima Unipersonal), but it ended up not being a viable option for entrepreneurs or SMEs.
SAS has been created to give more incentives to the Argentine economy and its investors. Among its advantages, there is the obligation for the registration of the SAS to be approved within 24 hours of submission. Also, the resulting act of approval will contain a bank account and a CUIT (Unique Tax Identification Code). These are two basic and fundamental requirements to set off any business in the country, and they will be considerably faster to obtain compared to before when registering for PLC’s or LLC’s.
As far as social capital is concerned, there is an alternative provision in comparison with LLC´s and PLC´s. It has been decided that the minimum capital cannot be less than the amount equivalent to twice the minimum wage. Currently, the value is $ 16,020 Argentine pesos ($ 8,060 x 2) – about USD $ 1000. At the same time, capital will consist of shares, with the transmission facilities involved, and with the capacity to create different types of shares or different values. Additionally, it grants the possibility of having one or several partners, seeking to circumvent the harsh requirements of the Unipersonal Corporation (SAU).
Administrative Advantages in Argentina
Concerning corporate administration, they have facilitated organization compared to the LLC and PLC. This is because it is established that partners will determine the structure of the company and other rules governing the operation of internal bodies, as opposed to the inflexibility of the previous obligation of needing management or a directory (an LLC or PLC respectively).
Furthermore, it is no longer necessary to change the management body every three fiscal years nor is it required for the financial statements to be registered yearly with the Legal Inspection Department. Also, the company should register the annual balance sheets and ratify its board of directors every three fiscal years –the requirements that have to be met by the LLC and PLC, as applicable. The only limitation there is is that of the administrative body that can only be composed of natural people, ruling out in this sense the legal ones. Moreover, freedom of choice is established to start an oversight, syndicate or supervisory body, which will be governed by its provisions or supplemented by the General Companies Law.
Tips to Succeed in Launching a Successful SAS in Argentina
The implementation of the SAS as a corporate figure brings a breath of fresh air to the Argentine corporate structure, providing new and varied advantages. Those opting for this type of company structure will not be exempt of facing difficulties in practice, but we consider that it is undoubtedly a kick in the right direction towards the promotion, and above all, the facilitation of business and investment in Argentina. If you are from abroad and want to open a company in Argentina, the SAS would probably be the most appropriate for you. If you are wondering which type of legal structure is best for you in Argentina, you could reach out to a local service company or consultant to help you set your business up in Argentina. Regardless of what you choose, there is opportunity to do business in Argentina, especially as we see the growth of FDI (foreign direct investment) in the country. It is recommended that you get a local administrative services company to help you get started.
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