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Basics on Doing Business in Argentina

Published by Hector Lopez

This intends to be an overview of the legal system; foreign investment, including restrictions, currency regulations and incentives; and business vehicles and their relevant restrictions and liabilities. The article also summarizes the laws regulating employment relationships and provides short overviews on competition law; data protection; and product liability and safety. In addition, there are comprehensive summaries on taxation and tax residency; and intellectual property rights over patents, trade marks, registered and unregistered designs.

Foreign investment

Generally, foreign citizens investing in Argentina have the same status and rights as local investors. However, the following restrictions exist:

Aviation: foreign citizens are not allowed to own the majority of the shares. Broadcasting: foreign ownership of Argentine broadcasting companies is limited to 30%. The purchase of land in frontier zones and other security areas requires prior governmental approval.

Rural Land: non-nationals must not own more than 15% of the total rural land in each Argentine province or municipality and must not own land that comprises or is located beside permanent and significant bodies of water.

The foreign owner must not have more than a specified number of hectares, which varies according to location (for example, 1,000 hectares for the principal agriculture area in the north of the province of Buenos Aires), although there are some exceptions applicable to foreign individuals (Law 26,737).

Approval by regulatory agencies is needed for acquisitions in the following industries:





Exchange controls or currency regulations

There are restrictions on the transfer of funds in and out of Argentina, including a 30%, one-year non-remunerated deposit (released on expiry of the term or the filing of documents) in certain foreign exchange transactions if prescribed documents are not filed before the foreign currency is converted into Argentine currency (Argentine Central Bank Communications "A" 445 and 435).

Exemptions from the 30% deposit can apply to:

Direct investment of capital in local companies by non-Argentine residents if the contribution is capitalized in accordance with current legal requirements, and evidence of the registration procedure before the Public Registry of Commerce (the Registry) is filed (code 447).

The sale of shares of local companies to direct investors, if the acquisition of the share capital resulting from the transaction qualifies as a direct investment and is evidenced by the relevant share purchase agreement and a copy of the filing with the Registry or a copy of the transfer of the shares' entry in the corporate books of the local company (depending on the type of company) (code 453).

Foreign exchange receipts from goods exports must be settled through the foreign exchange market (Ministry of Economy (Executive Order Nº 120/03, as amended)). In addition, the Central Bank has provided that the exporter has 120 additional business days to settle foreign exchange receipts though the foreign exchange market, extended to 180 business days when the purchaser fails to pay the transaction costs and to provide the foreign exchange receipts resulting from export credit insurance.

Most common form of business vehicle used by foreign companies in your jurisdiction, and what are the main applicable formalities, rights, restrictions and liabilities

The corporate entities most commonly used for business enterprises in Argentina are the:

Stock corporation (Sociedad Anónima) (SA), in which the capital is divided into shares. Stock corporations can also publicly offer their shares and be listed on the stock exchange (listed companies).

Limited liability company (Sociedad de Responsabilidad Limitada) (SRL), in which the capital is divided into quotas.

Registration Formalities

Foreign companies intending to own shares or participate in the incorporation of an Argentine company must register with the Inspection of Corporation of the province in which the foreign company will be based (Inspection General de Justicia) (IGJ) (Section 123, Companies Law).

The time between the date of filing with an IGJ and the date of registration varies between 15 and 40 days. Each IGJ has specific requirements as to the necessary documentation for registration, but it generally includes:

A copy of the foreign company's bye-laws and articles of incorporation.

Evidence of the foreign company's valid incorporation in its home jurisdiction (issued by the relevant foreign authorities).

A copy of the board meeting minutes where relevant details are discussed.

Additionally, stock corporations are incorporated by a deed executed before a notary public or a private instrument with notarization of all the signatures and filed before the companies' local IGJ. The company must register before the tax office (Administración Federal del Ingresos Públicos) where the company will obtain a tax number (Clave Única de Identificación Tributaria).

Additional registration is necessary for certain industries such as Central Bank registration for financial institutions.

The documentation to be filed for stock corporations generally includes the following:

The original, and two copies of the incorporation public deed or private instrument.

Payment of the IGJ fee.

A copy of the Official Gazette in which it is announced that the company is being incorporated and in which relevant information about the new company and its shareholders and board members is provided.

Evidence that at least 25% of the capital has been paid in.

The qualification report issued by the notary public or a lawyer in which they certify that the documents filed comply with the corporate applicable legislation. Where it is indicated that a company is part of a foreign entity group, the existence of the foreign company must be proved and documentation provided proving consent to be associated with the foreign company.

Share capital

The capital of a company must be reasonable for the activities that it plans to undertake. The minimum capital for corporations is around US$ 3 K equivalent, but certain sectors have a much higher minimum capital (such as, financial institutions and insurance companies). There are no maximum capital requirements.

Management structure

Generally there is a unitary management/board structure. However, in some situations, there is a two-tiered structure.

The managers of an SA are referred to as the board of directors while the managers of an SRL are referred to as the board of managers. The company's bye-laws can allow the board to form an executive committee to manage the day-to-day business of the company, so forming a two-tiered board structure. The bye-laws can also provide for a supervisory body (Síndico o Comisión Fiscalizadora) to be set up. This is mandatory in certain companies (for example, public companies, companies with a minimum capital of ARS10 million and companies that provide public services).

A surveillance council (Consejo de Vigilancia) (a body formed by shareholders whose constitution is determined by the shareholders) can also be established. The surveillance council has supervisory powers over the board and can appoint directors, but is rarely used.

In addition, the board of directors can appoint general or special managers (who may or may not be directors), to whom they can delegate executive administrative functions. In the case of SRLs, management powers can be distributed among the individual members of the board of managers.

No nationality requirements apply to directors, although the majority of directors must reside in Argentina.

Workforce and Employment Contracts

A written contract is not mandatory and a labor contract can be established in any form or language, including in writing, orally or even tacitly (Article 48, LCL), and without specific terms or language unless it is a fixed term employment contract or temporary contract which must be in writing. However, in the even of litigation written contracts must be in Spanish and therefore are normally created in Spanish.

If a foreign employee is required to work in Argentina, a written contract is required as a condition for obtaining the necessary work permits.

The rights and duties under the LCL apply to all labor contracts, regardless of the will of the parties. Collective bargaining agreements establish rights and duties for employees covered by those agreements. The parties can agree in a labor agreement matters more favorable to the employee than those provided by law or collective bargaining agreement or matters not covered by the law but cannot agree terms less favorable.


Imports and exports are subject to the following tax rates:

Exports of goods (except agriculture and oil products) are generally exempt from VAT but are subject to export duties (derechos de exportación) at 5%.

Exports of agriculture products such as wheat, corn, soya oil, sunflower, meat and oil products are generally exempt from VAT but are subject to export duties at a rate that varies from 5% to 45%.

Exports of services that will have no use in Argentina are generally exempt from VAT and of export duties.Generally, no import duties are imposed on goods from Argentina, Brazil, Paraguay and Uruguay (Mercosur countries) if they meet the requirements of origin from a state member of Mercosur.

The import of Mercosur goods is subject to withholding VAT and income tax.Imports from outside the Mercosur are subject to the prior payment of duties, VAT and income tax withholding. The maximum rate is 35%, (this amount has been established for the member countries of World Trade Organisation).


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