Argentina represents an attractive commercial destination for businesses. It houses a diverse range of sectors (notably oil and gas, agriculture, tourism and IT) and a highly educated workforce. Its geographical position offers a number of advantages for importing and exporting goods and services. Setting up a business in Argentina is however not without its challenges.
Thanks to the government’s increasingly progressive outlook on development and international trade, further advantages are being allowed for foreign investors looking to expand into Argentina.
In August 2018, Argentina’s Public Registry of Commerce (IGJ) enacted Resolution 6/18. This resolution introduces substantial changes to the way foreign companies can establish their business in the country. The government’s intent behind the Resolution is to make company formation in Argentina easier. The Resolution achieves this through simplifying public administration procedures, particularly regarding the registration process.
Registering for a business is now easier
Foreign companies interested in settling a business or operating in Argentina, either through the registration of a Branch or the establishment of a Subsidiary, must go first through a registration process with the Public Registry of Commerce (IGJ).
In this process, you will be required to present certain documentation regarding the foreign primary entity, which, in addition, must need to be translated into Spanish by a public translator.
This process used to be slow and complex due to the amount of documentation required by IGJ. However, the enactment of National Decree No. 891/2017 aims to incorporate a series of guidelines called ‘Good Practices in simplification,’ applicable to the operation of the National Public Sector, including the IGJ.
In this framework, General Resolution IGJ No. 6/18 simplifies these administrative procedures, which seeks to advance with the facilitation and reduction of procedures that foreign commercial companies should conduct in order to start their commercial operations.
Specific modifications in registration procedures
Among the modifications introduced by this Resolution, the following elements stand out.
- Regarding the requirements for foreign companies to apply for registration, documentation on their assets and activities abroad will no longer be required for the purpose of accrediting a significant economic activity outside the country. Previously, it was necessary to present a balance or accounting certification of the foreign company to prove this point. In addition, partners of the legal entity should no longer be identified, which used to happen before the reform.
- The obligation for foreign companies to renew their registration annually by submitting information related to their partners and assets – called the ‘Annual Information System’ – has now been eliminated. Currently, once the company is registered, only changes in the statute, head office or legal representatives must be registered.
- The restriction that established foreign companies could only act in the acts subject to registration through their registered representative or attorney was eliminated. According to the new text, both the registered representative and a representative director by the head office can represent the foreign companies.
- Cancellation due to inactivity of branches: the reform removed the requirement that branches must have a validity of no more than five years in order to be closed.
- The IGJ was authorized to evaluate the registration of companies from countries with special tax regimes, or categorized as non-cooperative in matters of fiscal transparency and/or as non-collaborators in the fight against money laundering and financing of terrorism (the commonly referred to as “tax havens” and “offshore” companies). Businesses with these categories may be evaluated as long as they can demonstrate economically significant activity abroad and identify their shareholders. The registration of this type of company was previously prohibited.
Promoting Argentina’s investment prospects
This Resolution and the provisions established to apply for procedures that are initiated subsequent to its sanction (08/30/18), and to those that are already in progress.
The approval of this Resolution is another example of Argentina’s efforts to become an attractive destination for foreign investors and entrepreneurs who seek simple and agile ways to establish and operate their businesses. Argentina’s competitiveness for investment continues to increase in a dynamic and demanding international context.
Registering a company in Argentina? Call us
Not only because of the quantity and variety of resources but now because of the regulations in force, Argentina is becoming more and more accessible to international investments. Therefore, it is important to have qualified and trusted people to advise you on the best ways to enter the market and start operating.
If you are considering entering the Argentine market and want to ensure that your operations run smoothly, Biz Latin Hub can help. Our tailored range of business solutions ensures your company gets the best possible start it needs when expanding into new territory.
Contact our specialized Team in Argentina at [email protected] to receive personalized assistance. Check out our video below to find out more information about doing business in Argentina.