Argentina has the third-largest economy in Latin America and boasts numerous under-exploited or untapped investment opportunities. If you are looking to take advantage of any of these and considering company formation in Argentina, you will want to know about the steps involved in the process, the types of legal entities to choose from, and potential alternative options for entering the market.
With a Gross Domestic Product (GDP) of $449.7 billion (USD) and a Gross National Income (GNI) of $11,200 (USD) per capita, according to the World Bank, Argentina is at the higher end of upper-middle-income countries. Foreign Direct Investment (FDI), meanwhile, has fluctuated between $2.8 billion and $600m (USD) per year over the past two decades and sat at around $1.5 billion (USD) in 2019.
Boasting rich natural resources, a large agricultural sector, a well-developed industrial base, and a highly-educated population that includes a large and well-established middle class and the highest level of English language proficiency in the region, the Argentinian economy has a great deal to offer potential investors.
If you are considering starting a business in this large South American economy or you would like to register a company having previously hired local staff through an Employer of Record (EOR) in Argentina, read on to find out about the key steps involved in the company incorporation process and the types of legal entities available to choose from.
But first, watch the video below on doing business in Argentina.
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7 steps for company formation in Argentina
If you are considering company formation in Argentina, it is strongly recommended to engage with a trusted market entry services provider able to assist you with the likes of appointing a legal representative, creating the company’s statutes and powers of attorneys, and establishing a fiscal address in the country. A market entry services provider will also help you navigate Argentina’s at times complex legal and tax system and help you in every step of a company incorporation process, which includes:
- Drafting and signing of powers of attorneys
- Registering of shareholders
- Creating the company’s bylaws
- Registering the company before the Public Registry of Commerce.
- Obtaining of tax identification number (Clave Única de Identificación Tributaria – CUIT).
- Activating a corporate bank account
- Certifying all documents before a public notary and legalizing them before the Argentine Consulate
Once your fiscal address in Argentina is established, your company will be able to hire local personnel and draft employment contracts.
Types of legal entities in Argentina
One of the most important aspects to consider when forming a company in Argentina is the type of legal entity to establish in the country. The most common legal entities in Argentina are the Public Limited Company (S.A.), Limited Liability Company (S.R.L.), and Simplified Stock Company (S.A.S.).
Some of the main requirements to establish each of these legal entities include:
A) Public Limited Company (S.A.)
- Most of the shareholders must reside in Argentina
- An annual shareholders meeting should be held to assess the financial condition of the company
- The company must have minimum investment capital of $100,000 (ARS) or $1,217 (USD)
B) Limited Liability Company (S.R.L.)
- The company must have a minimum of two shareholders and a maximum of 50
- No minimum capital required
C) Simplified Stock Company (S.A.S.)
- The capital must be made up of shares
- The capital investment must be twice the Argentine monthly minimum wage — approximately $410 (USD)
Form a branch or register a subsidiary
Two alternative options to company formation in Argentina that are available to investors seeing to enter the market are to form a branch or to register a subsidiary. Branch formation in Argentina does not imply having to incorporate a different legal entity, because while a branch must be registered in the Public Registry of Commerce, the laws that govern it are mainly the laws of the company’s country of origin.
To register a subsidiary in Argentina, on the other hand, means creating an independent legal entity. While that is a more complex administrative undertaking, it limits liabilities held by the holding or parent company based overseas.
Hiring local staff in Argentina through an EOR
Hiring local staff through EOR in Argentina could be a good alternative if you are planning on developing commercial activities on a smaller scale or for a limited time. It can also be a good way to get better acquainted with the market before going through full company formation in Argentina.
An EOR in Argentina will support your organization by providing HR services including recruitment and firing, onboarding and offboarding, ongoing support with payroll, taxes, and benefits, drafting contracts and documents in English and Spanish, and overseeing various other administrative tasks.
An established EOR in Argentina will also have an established recruitment network, meaning you can expect them to find you suitable personnel quickly, while also complying with all local labor regulations, giving you peace of mind and time to focus on other crucial aspects of your business.
Biz Latin Hub can assist you with company formation in Argentina
At Biz Latin Hub, our multilingual teams of legal, accounting, and back-office specialists are equipped to help you with company formation in Argentina, as well as a wide range of other corporate support services in the South American nation. With our full suite of market entry services, we can be your single point of contact to help you to enter the market in Argentina, or elsewhere in Latin America and the Caribbean.
Contact us now to discuss your expansion options.
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The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.