Entrepreneurs and Chief Executives looking at their expansion options should be evaluating the potential to do business in Argentina. The country holds a number of commercial opportunities for foreign business. With a GDP of approximately US$470 billion, it’s one of the largest economies in Latin America.
The country is experiencing somewhat tumultuous political and economic circumstances. However, the opportunities to do business (and those who move to take advantage of them) seem largely unaffected.
Argentina is classified as a high-income economy with an estimated population of over 42 million people. Endowed with natural resources and a vigilant workforce, the country is a place of interest for foreign investors and entrepreneurs.
In this article, we highlight reasons why it’s the right time to do business in Argentina.
Regulative incentives to do business in Argentina
Argentina has taken steps to reduce bureaucratic procedures for foreigners to do business. You can set up your business in a highly competitive timeframe – as little as a week. The process requires limited government approval or registration (with the exception of the trade and foreign exchange sector). With the right legal support, you can register your company with a Public Registry of Commerce, who stores your information with the National Registry of Companies (Registro Nacional de Sociedades).
It’s important to take into account that Argentina has a progressive tax regime. This means that tax rates increase with a rise in income. The corporate tax rate has sat at 30% since 2018.
There are also many regional and provincial incentives like industrial parks and duty-free areas for foreign investors wishing to setup their company in Argentina. If you are looking to finance your project, Argentina has a streamlined credit process system and was ranked as the 67th easiest country in the world to obtain credit.
Profitable sectors for doing business
Argentina is one of the leading agricultural producers in the world, exporting products such as beef, corn, soybeans, cereal, and wheat. According to Statista, agriculture accounts for around 6% of the country’s GDP. Other leading sectors include the automobile, electronic, services and mining industries.
Argentina’s well-diversified service sector also plays an important part, accounting for nearly 60% of total GDP. The sector is particularly strong in the areas of corporate, finance, tourism, real estate and telecommunication. As services are moving online with new technological innovation and an increased proportion of mobile users in the country, this area presents significant potential to do business in Argentina.
Labor and workforce in Argentina
Argentina has a highly educated and well-trained workforce, despite its high levels of unemployment and child labor. Argentinian employers must contribute to their employee’s pension and health care plans. These contributions are equal to approximately 33% of the worker’s salary. Upon retirement, all workers (assuming they were involved in legal, formal work for more than 30 years), are entitled to a basic universal benefit as a form of social security payment.
Trade unions have traditionally been strong in Argentina. Although this has declined over the years, they are still prevalent in modern Argentina and have some influence over labor activity and movements.
Do business in Argentina with specialist support and guidance
Are you looking to do business in Argentina and need assistance in order to form a company or start running a project? Contact Biz Latin Hub to get started.
To ensure you understand relevant legal and taxation requirements, consult a corporate services specialist when doing business in Argentina. It’s imperative to comply with your obligations under local law in order to get the best start.
Our Argentine legal and accounting professionals offer a full suite of market entry and back-office services for businesses expanding into the country. We’re your single point of contact for responsive, efficient, multilingual assistance to form your company in full compliance of local corporate regulations.
Contact us here for guidance and advice on how to succeed in your new market.
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Note: This post was updated on 31 January, 2020.