Doing Business in Argentina: What Does the Future Hold?

Like most countries in the region, and indeed the world, Argentina took an economic hit during the pandemic. But since then the Andean country has seen  GDP growth of 5 percent in 2022, and was projected to grow by 3 percent both in 2023 and 2024. However, signs indicate that after its initial post-pandemic surge, Argentina’s growth is beginning to falter. So what does that mean for foreign investors?  What does the future hold for doing business in Argentina?

On the matter of whether doing business in Argentina will get easier, there’s a fine line between pessimism and realism. Let’s let one statistic speak for itself. Argentina ranked 126th out of 190 countries in the 2020 Ease of Doing Business Index, a study conducted by the World Bank. The index ranks countries on how friendly a business climate they offer entrepreneurs and investors, where a No. 1 ranking (New Zealand) is the best for doing business, and No. 190 (Somalia) is the worst.

Read on to find out more about what the future holds for doing business in Argentina.

SEE ALSO: Types of Legal Structures in Argentina

An infographic on the most profitable businesses in Argentina in 2023
Thinking about Doing Business in Argentina? Learn which are the most favorable sectors

Why could doing business in Argentina continue to be challenging in the future?

Simply put, the bureaucracy, barriers and burdens that have made doing business in Argentina so painful in the past will continue into the future. Some of the key challenges for companies and investors include:

  • Difficulties starting a business
  • Importation, currency barriers
  • Persistently high inflation 
  • Convoluted property registry process
  • High cost of obtaining credit
  • A complicated tax regime
  • Complex regulations for cross-border trade
  • The ongoing national debt crisis

Key challenges to doing business in Argentina

If you’re wondering if doing business in Argentina will get easier, it could – if you hire the right local legal and accountancy team that will work tireless to obtain all the licenses, certificates, notarization and documentation you will need. What follows are some of the biggest hurdles that companies and investors that plan to do business in Argentina will face:

1. When starting a business, be prepared for red tape

Starting a business in Argentina requires businesspeople to navigate a maze of bureaucracy and comply with seemingly needless requirements like notarizing employee records. “Argentina made starting a business more difficult by introducing an additional procedure for legalizing the employee books for companies hiring more than 10 employees,” the 2020 Ease of Doing Business study stated. Not something you want to hear if you are hoping that doing business in Argentina will get easier.

2. Import barriers, difficulty accessing foreign currency

Businesses that rely on imports to Argentina could experience delays or denials of licenses to import goods and services, and face strict limitations on a company’s ability to access foreign currency to pay for those imported goods or services.

3. High inflation

The annual rate of inflation in Argentina stood at 211.4% as of December 2023, a significant increase from the recorded 72.4% at the end of 2022. Unlike other issues, much of this isn’t Argentina’s fault. The global rise in energy and food prices due to the war in Ukraine and fluctuation in oil prices have had a particularly adverse impact on Latin America. It is extremely likely these factors will have a negative impact on whether doing business in Argentina will be easier or not.

4. Registering property

Registering property requires the completion of seven procedures taking an average of 51.5 days. Before the process can begin, three different hard-to-get certificates are required, and the act of obtaining them can be costly and time consuming. 

5. Costly access to credit

Bucking the inefficiency trend, getting access to Argentine credit in may be one of the most streamlined processes in the country. This may be the one glimmer of hope that doing business in Argentina will get easier. Still, there are four complex procedures to navigate and the cost of obtaining credit can be quite high.

6. Complex tax system

Paying taxes is a highly complicated process, with around nine payments needed per year, which can take roughly 312 hours of work to prepare. Argentina has very high levels of taxation and a complex system with overlapping taxes, making paying taxes a headache for businesses. The corporate tax rate in Argentina ranges between 25 to 35 percent

7. Cross-border trade barriers

A map of Argentina by Biz Latin Hub
If you are thinking of doing business in Argentina, you should get to know its main cities

“Barriers” to Argentine trade might not be the most precise term to use, since those barriers are self-inflicted. But needless to say, cross-border trade remains challenging.

The government recently signed a series of new trade agreements with its neighbors, which sought to optimize the flow of international trade. Among the measures taken was the removal of tariffs on technological products.

Despite these efforts, Argentina remains one of the most complex countries from which to do cross-border trade. On the trade side of things, the future of doing business in Argentina seems to continue to be challenging.

8. Argentina’s sovereign debt crisis

Argentina’s economy has been hit by crises, defaults and rampant inflation for decades. This has been exacerbated by recent fears of a global recession and spiraling inflation, spooking investors over possible defaults and missed loan-repayment targets with the International Monetary Fund (IMF).

Signs of hope doing business in Argentina will get easier – in some sectors

Despite Argentina’s macroeconomic problems and omnipresent bureaucracy, there are positive signs in three of its most important sectors:

  • Manufacturing – In 2022, the president of Toyota Argentina, Daniel Herrero, said his auto manufacturing plant would increase production by 20 percent, and would continue the ramp-up in production. 
  • Oil & gas sector – Argentina is a key exporter of oil and gas, and in 2022 was able to ramp up production, seeing 57-percent year-on-year growth in the sector as a result of increased capacity, and an increase in non-conventional extraction.  Furthermore, according to a report published in 2024, the export of crude oil have been rising by around 30% each year. 
  • Electricity production – The country is adept at generating electricity, but problems persist in distributing power along the national electricity grid. If private companies and the government could work out a deal to invest in updating critical infrastructure, this would not only help to boost power generation, but also jobs as well.

Biz Latin Hub can help you to determine whether doing Business in Argentina Will Get Easier

At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in Bogota and Cartagena, as well as over a dozen other major cities in the region. We also have trusted partners in many other markets.

Our unrivalled reach means we are ideally placed to support multi-jurisdiction market entries and cross-border operations.

As well as knowledge about how the business climate in Argentina is likely to pan out, our portfolio of services includes hiring & PEO, accounting & taxation, company formation, bank account opening, and corporate legal services.

Contact us today to find out more about how we can assist you finding top talent or otherwise doing business in Latin America and the Caribbean.

If this article on whether doing business in Argentina will get easier was of interest to you, check out the rest of our coverage of the region. Or read about our team and expert authors.

A BLH infogrpahic showing key services offered by the company
Biz Latin Hub can support you in doing business in Argentina

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.
David Wright
David Wright

David spent 22 years working for the British Diplomatic Service serving in various Latin American countries. He served twice in Colombia including acting as an advisor on regional security matters to the President of Colombia. Currently, he acts as a consultant for companies and governments on risk management, security and technology.

David is also involved in mining related companies, both in Executive and Non-Executive roles. Together with Craig Dempsey he set up Biz Latin Hub and now acts as its Non-Executive Chairman. David holds a Bachelors Degree in Astrophysics from Birmingham University and also studied at Brown University.

Receive the latest news and advice about expanding your business globally
Subscribe to our newsletter to receive the latest business news and advice about entity formation, legal entity compliance, accounting, back office and fiscal requirements. Receive the latest news and advice about expanding your business globally.

This field is for validation purposes and should be left unchanged.