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Damalion Argentina desk

Doing Business in Argentina

Argentina’s economic condition is thriving. In 2020, it recorded a GDP of USD 382.2 billion, making it the third-largest economy in Latin America and 31st globally. On the other hand, GDP per capital is USD 8,433 per citizen. Argentina has great potential in industries, including agro-business and technological services with a high penetration in major international markets. Additionally, the country has Vaca Muerta, the second largest shale gas reserve in the world and fourth largest shale oil reserve.

Legal System in Argentina

  • Argentina’s legal system is primarily based on civil law and statute.
  • Case law is also a critical element in sorting out legal interpretation, but judges are only required to follow a previous decision in most cases.


The Argentine Central Bank (BCRA) is exclusive and independent from the Executive Branch. Its role includes encouraging financial and monetary stability, as well as the economic and employment growth with social equity as one of its main tenets.

To boost economic activity and establish nominal stability in Argentina, monetary policies are considered medium-term goals to create a sustainable balance between inflation, setting of interest rates, and monetary aggregates.

Argentina’s foreign exchange is considered flexible with capital controls. In terms of fiscal policy, Argentina has a Stand By agreement with the International Monetary Fund, delineating public account goals for the next few years. The National Government is undergoing negotiations to create a renewed relationship with the International Monetary Fund and other international multilateral organizations.

Foreign Investments in Argentina

In general, non-residents have the same rights and status as local investors. There are however several restrictions that exist, including:

  • Foreign investors are restricted to own majority of shares in the aviation industry.
  • Foreign investors are only allowed 30% ownership in Argentine broadcasting companies.
  • Government approval is required before foreign investors can purchase land in frontier zones and other security areas.
  • Non-residents may only own up to 15% of total rural land in each Argentine province or municipality. Foreign investors must not own land that comprises or located beside permanent or significant bodies of water.
  • A foreign owner must not have more than a specified number of hectares, which varies based on location.

Prior approval from regulatory agencies is required for the acquisition in the following industries:

  • Banking
  • Communication
  • Insurance
  • Communications

Company Business Vehicles in Argentina

Business entities commonly used by foreign investors for operations in Argentina are as follows:

  • Stock corporation (SA), which capital is divided into shares. Shares can be publicly offered and listed on the stock exchange.
  • Limited liability company (SRL) wherein capital is divided into quotas.

Main Qualities of a Limited Liability Company (SRL) in Argentina


  • Must have at least two partners and a maximum of 50 partners.

Corporate Capital

  • There is no minimum capital required for this business vehicle. However, the corporate capital must be adequate to the type of activity to be developed by the company and represented by quotas.

Liability and Corporate Capital

  • Partners’ liability is limited to the total amount of its corporate capital.
  • Capital quotas carry voting rights.
  • There are no different classes or types of capital quotas.
  • Value of each quota is ARS 10 each on multiples of ten.

Transfer of Shares or Quotas

  • Transfer of quotas is free although it may be limited due to specific reasons set forth by the company bylaws.
  • While the transfer may be limited, it cannot be banned altogether.
  • Changes to the company’s articles of association and subsequent registration with the Public Registry are required.

Administration and Management

  • Administration of a Limited Liability Company rests with the management, which is made up of two or more persons, who may or may not be partners.
  • The majority of management should be residents in Argentina.


  • Appointment of a statutory audit committee, statutory auditor, or supervisory committee is optional and must be governed by the provisions of its articles of association.
  • If the corporate capital exceeds ARS 50,000,000 such an appointment is a requirement.
  • Provisions governing stock corporations apply complementary to a Limited Liability Company only when the supervisory board is optional and when it is a requirement.
  • Attributes and duties of these bodies have to be the same established as those for stock corporations when an appointment is mandatory.

Variable Capital

  • Variable is not allowed in a Limited Liability Company.


  • In some jurisdictions, this type of company is considered transparent, like a partnership, thus may allow for selecting a check-the-box modality for tax purposes.

Main Qualities of a Stock Corporation (SA) in Argentina


  • Must have at least two shareholders and unlimited number of shareholders.

Corporate Capital

  • Set minimum share capital requirement is ARS 100,000 and is solely represented by shares.

Liability and Corporate Capital

  • Partners’ liability is limited to the total amount of its contributed paid-in capital.
  • Capital quotas carry voting rights.

Transfer of Shares or Quotas

  • Transfer of shares is allowed and free but may be limited for specific reasons as stated in the corporate bylaws.
  • Notice of transfer should be communicated to the company.

Administration and Management

  • Administration of a Stock Corporation rests with the Board of Directors, which is made up of two or more persons, who may or may not be shareholders.
  • The majority of the Board of Directors should reside in Argentina.


  • Appointment of a statutory audit committee, statutory auditor, or supervisory committee is a requirement, and may include but not limited to the following instances:

(I)- Where the capital stock is more than ARS 50,000,000.

(II)- Where the stock corporation is listed in the stock exchange.

  • In case a company fails to meet the conditions that require appointment or if it decides not to establish a supervisory board, the company must delegate alternate members to the Board of Directors instead.

Variable Capital

  • Variable is not allowed in a Stock Corporation.


  • The Stock Corporation is the most commonly used vehicle by private investors and legal entities to do business in Argentina.

Company Registration Formalities in Argentina

  • As per Section 123 of the Companies Law, foreign entities looking to own shares or participate in the incorporation of an Argentine company must register with the Inspection of Corporation of the province where the foreign company will be based.
  • Date of filing and the date of registration can last between 15 and 40 days.

Each Inspection of Corporation has their own respective requirements as to the necessary documentation for registration. Requirements include the following:

  • Foreign company’s by-laws and articles of incorporation.
  • Copy of the board meeting minutes where relevant details are discussed in detail.

A stock corporation is established by a deed executed before a notary public or private instrument with notarization of all signatories and filed before a company’s Inspection of Corporation.

A company must register before the tax office where the company obtains its tax number. Additional registration requirements for certain industries are mandatory, such as Central Bank registration for financial institutions. Additional requirements for incorporation include:

  • Original and two copies of incorporation public deed or private instrument.
  • Payment of the necessary Inspection of Corporation fees.
  • A copy of the Official Gazette in which it was announced the company was incorporated and which relevant data about the new company and its shareholders and board directors are provided.
  • Proof that at least 25% of the capital was paid up.
  • Pre-qualification report issued by the notary public or a lawyer in which they certify the documents filed adhered with the applicable corporate legislation.
  • Documentation where it is indicated that a company is part of a foreign entity, the existence of the foreign company must be proved, and documentation provided attesting the consent associated with the foreign company.

Company Share Capital

  • Capital must be reasonable for the activities that it plans to undertake.
  • Minimum capital is ARS 12, 000 or USD 1.
  • Certain sectors must have a higher minimum capital, such as in the case of financial institutions and insurance companies.
  • No maximum capital requirements.
  • Shares can be issued for non-cash consideration such as property and intangible assets.
  • Non-cash consideration must be valued by a third party.
  • Labour does not constitute a non-cash contribution.

Rights Attaching to Shares

Bylaws may include limitations on rights attaching to shares and tend to regulate the way in which a company will be managed, including:

  • Establishment of voting procedures for the board of directors and shareholders.
  • Establishment of special procedure to transfer shares to third parties.
  • Dispute resolution mechanisms.

Automatic Rights to Attaching to Shares

Shareholders have the right to:

  • Be heard at the shareholders meeting.
  • Vote at the shareholders meeting.
  • Participate in the company’s profits.
  • Participate in the company’s assets in case of liquidation.
  • Withdraw from the company in some instances.
  • Refuse to right in case of new subscription of shares.
  • Withdraw from the company in certain circumstances.

Company Management for Non-Residents in Argentina

  • There is a unitary management or board structure.
  • There is no two-tiered structure.
  • Managers of a stock corporation are referred to as board of directors while the managers of a Limited Liability company are referred as board of managers.
  • As per company bylaws, board can form an executive committee to manage day-to-day business of their company, thus forming a two-tiered board structure.
  • As per bylaws, a supervisory body can be set up. This is mandatory in certain business structures, such as in the case of public companies and companies with a minimum capital of ARS 10 million and companies that provide public services.
  • Surveillance council may also be established. They assume supervisory powers over the board and can appoint directors.
  • Board of directors can appoint a general manager or special manager to whom they can delegate administrative functions.
  • In the case of a Limited Liability Company, management powers can be allocated among individual members of the board of managers.

Management Restrictions

There are no nationality requirements applicable to directors, although the majority of directors must reside in Argentina.

Directors’ and Officers’ Liability

  • Directors must act honestly and in good faith, with the best interests of the company in mind.
  • Directors can be held personally and criminally liable to the company, shareholders and third parties if they failed to adhere to general or specific legal duties.

Parent Company Liability

  • A parent company has liability limited to its contribution to the company’s capital.
  • A parent company can be held liable in certain conditions. For instance, if the parent company votes that a company undertakes a certain course of action for its own benefit, it will be severally liable for any damage caused to the company.

Company Reporting Requirements

Companies registered and incorporated in Argentina must file the following:

  • Any changes of the bylaws.
  • Appointment, ceasing, and resignation of directors.
  • Capital variations, any increases or reductions.
  • Financial statements annually. Limited liability companies do not have to file their financial statements unless their capital is ARS 10 million or more.
  • Annual corporate fee for stock corporations.
  • Foreign companies must file proof or a sworn statement annually that they comply with an information regime that seeks to prove the main business of the foreign company has performed overseas.

Labor and Employment

The major laws that govern labor relations in Argentina are as follows:

  • Company, factory or establishment collective bargaining agreement.
  • Individual employment contracts.
  • International treaties (including International Labour Organizsation conventions ratified by Argentina).
  • Law 20,744 of Labour Contract (LCL) (does not apply to public employees and agricultural employees).
  • Law of Employment 24,013.
  • National business activity collective bargaining agreements.
  • Rules of collective labour law such as 14,250, 23,551 and 23,546.
  • The Argentine Constitution and national laws.

Argentine Labor Laws are applicable so long as work is performed in Argentina and regardless of the nationalities of both employees and employers.

  • When work is implemented in various jurisdictions, both parties can select the law to be applied in a contract.
  • Employees who are dispatched in another location under the same employer will be governed by Argentine Laws.
  • If the contract is implemented in another jurisdiction on a long-term or permanent basis, the foreign law is deemed applicable.
  • If a non-Argentinian is mandated to perform his work obligations in Argentina, a written contract is drawn out as a requirement to successfully obtain the needed work permits.

Non-Argentinian Employees Working in Argentina

If a non-citizen is assigned to work in Argentina, there must be a written contract to obtain the necessary work permits. To obtain a work permit, a foreign employee must submit the following documents:

  • Copy of original passport with seal of legal entry.
  • Original copy of certificate of birth.
  • Certificate of criminal record from the origin country.
  • Criminal record certificate obtained in Argentina.
  • Work pre-contract.
  • Registration to the tax bureau (Administracion Federal de Ingresos Publicos).

All documentations must have the approval or apostille from the Argentine Consulate where the foreign employee originates.

All paperwork in foreign language must be professionally translated into Spanish by a certified public translator.

All Argentine companies hiring foreign employees must be duly registered as a certified employer with the National Immigration Office. This office will issue approval for labor residence based on the existing labor contract, that which includes the verified identity of an employee.

Residence in Argentina is approved if the residence permit has been filed along with other pertinent documents. A residence permit allows a foreign employee to gain residence in Argentina for two to three months. Permits are set to be renewed annually.

Taxation Regime

  • Business vehicles are tax residents if incorporated in Argentina.
  • Income Tax Law determines that profits obtained by a foreign-owned company in Argentina will be taxed in Argentina.

Income Tax

  • Resident companies are assessed income tax on worldwide income at 35%, paid in monthly advances, based on their tax obligations from the previous year.

Presumed Minimum Income Tax

  • Refers to federal direct tax applicable to tax resident corporations and non-residents that maintain permanent establishment in Argentina.
  • Triggered on the holding of income-generating assets by the corporation and assessed on the taxpayer’s total income-generating assets value.
  • Applicable rate is 1% on the total value of assets, above an aggregate amount of ARS 200,000.
  • In case total assets do not exceed this value or the income tax paid is higher than 1% of the total value of assets, no presumed minimum income tax is payable.
  • Total amount paid towards presumed minimum income tax can be used as a tax credit against future income tax for up to ten years.

Personal Assets Tax

  • Applicable tax when the value of assets owned by the taxpayer as of the end of the calendar year exceeding ARS 305,000.
  • Rate varies between 0.5% and 1.25%
  • Tax applicable on shares and other equity participations in Argentina companies is 0.5% on the net equity value of the company and is payable by the Argentina company.

Gross Revenue Tax

  • Pertains to provincial tax calculated on a company’s gross income for a company with periodic commercial activity within its jurisdiction.
  • Rates are set by each province and varies between 1% and 6%, depending on the activity.

Value Added Tax

  • 21% ordinary rate
  • 10% for the sale of livestock, groceries, and provision of certain types of service
  • 27% on communication services and on the sale of electricity, gas, and meter regulated water.

Excise Tax

  • Assessed on the transfer of goods and the rendering of certain types of services
  • Applicable rates vary based on the particular goods or services rendered.
  • 60% on retail price of cigarettes
  • 20% on alcoholic beverages, or more than 10% of the alcoholic graduation
  • 10% on automobile when its value exceeds ARS 170,000
  • 20% on luxury items

Stamp Tax

  • Refers to local tax levied on public and private instruments executed in Argentina and abroad when their effects are produced in one or more relevant jurisdictions within Argentina.
  • Tax rates are set by each province, and vary between 0.5% and 3%, depending on the nature and contents of a contract.

Dividends, Interests, and IP Royalties

Dividends Paid

  • Dividends distributed by Argentina companies are not subject to income tax regardless of the shareholder’s country of residence.
  • Dividend distributions from companies that have not paid income tax at a corporate level are assessed to the equalization tax. This is applicable whenever accounting profits exceed taxable income at the corporate level or at 35% on the excess.

Dividends Received

  • Dividends received from a foreign company must be added to a company’s income tax return, but the Argentina company can deduct as tax credit on any income tax paid overseas.

Interest Paid

Argentina companies’ interest payments to foreign entities are subject to withholding tax at the following rates:

  • 5% when borrowers are financial entities as per Law 21,526 and when lenders are banks or financial entities controlled by central banks and similar authorities and located in jurisdictions that are not considered to be low tax jurisdictions.
  • Any applicable double tax treaty rates.
  • 35% on all other cases.

IP (Intellectual Property) Royalties Paid

  • IP Royalties may be subject to a reduced withholding tax rate of 28% if the agreement is registered with the competent authority.
  • Payments made in consideration for technical assistance no obtained in Argentina are subject to 21% effective withholding tax rate.
  • In all other cases, a 31.5% effective tax is applicable.
  • 5% withholding tax rate is applicable to software licenses if the software is copyright registered with the National Author’s Rights Office.
  • Rates are not applicable if there is a lower withholding rate provided under a double taxation treaty.

Transfer Pricing Rules

  • Applicable when an Argentina company enters into a business transaction with a related company overseas or a non-related company located in low tax jurisdictions and the prices of transaction do not reflect market prices.
  • To prove the terms of the transaction are equivalent to an arm’s length transaction, an Argentina company must submit a special report to the tax authorities containing detailed information including data and supporting documents.

Double Tax Treaties

  • Argentina entered into tax treaties with many EU member nations, including the United Kingdom, France, Germany, and Spain, as well as other non-EU countries, including Australia, Brazil, Bolivia, Canada, and Chile.
  • Treaties are based, other than those with South American nations, on the OECD Model Tax Convention on Income and on Capital.
  • There is existing tax treaty between Argentina and the United States.

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