Do you have a great business idea and would like to commence operations in Argentina? In order to do so, you’ll have to legalize your business and choose the right legal structure according to the type of business activity you will be conducting.
This article will provide you with the most commonly used types of legal entities in Argentina. Once these processes are complete, you are free to begin your business operations in this exciting emerging economy.
Entity Type 1- Corporation (Sociedad Anónima – ‘S.A’) in Argentina
The first type of legal structure in Argentina is a corporation, which requires a minimum of (2) shareholders. It is not important whether they are local or foreign. A corporation requires a minimum investment of AR$100.000, with a proportion of the company shares of at least 10% – 90%. The Corporation must also have a board of directors of which the majority must reside in Argentina and hold annual shareholders’ meetings in order to assess the financial situation of the company.
Entity Type 2 – Limited Liability Company (Sociedad de Responsabilidad Limitada – ‘SRL’)
An SRL can be formed with a minimum of (2) partners and a maximum of (50), The SRL requires a minimum capital commensurate with the activity to be performed by the company, which is to be divided into stocks. This structure must be administered by a manager residing in Argentina. Similar to a corporation, a SRL must also assess annual statements through a yearly partner’s meeting.
Entity Type 3 – Simplified Shares Company (Sociedad por Acciones Simplificadas – ‘S.A.S’)
The Argentine S.A.S was created in 2017 in order to simplify the process of establishing a legal entity in Argentina. This type of legal structure has the following advantages:
- Able to have (1) shareholder (natural or legal person)
- Low minimum capital (twice the minimum wage)
- Quick formation time (the legal entity can be approved in 24 hours)
This new type of legal entity has been a key factor in the increased commercial interest in Argentina over the past year. Combined with investor-friendly reforms, Argentina is opening its doors to foreign participation, and the economy is feeling the benefits of this.
Entity Type 4 – Branch of Foreign Corporation in Argentina
Installing a branch in Argentina is an attractive option for companies who have headquarters in a foreign country. In order to install the branch, proof of the existence of the office overseas must be provided to local authorities.
The branch will have to prove the following conditions:
- A representative in the country where the company is being established
- Carry out business in line with partnership purposes.
- Have own accounting and submit annually its balance sheet to the controlling authority
Learn more about the types of legal structures in Argentina
Argentina has recovered well from the debt crisis of 2001. This has been in part due to an increase in foreign investment which has helped to grow the economy. Choosing the right type of legal entity, and setting up a business in Argentina can be a challenge, for this reason, it is recommended to work with a local partner. Get in contact with Biz Latin Hub – our team of local experts and professionals can support you and your business venture in Argentina with our services ranging from legal and commercial representation to market entry. Contact our country manager, Javier, at [email protected] for personalized information.
Watch the following video for more information on doing business in Latin America!