When setting up a business in Argentina, foreign investors have three options: establishing a foreign branch office, acquiring ownership interests in an existing company or creating a new company. The main characteristics, requirements and implications of the different legal structures available to companies in Argentina are presented below.
A branch or representative office is created when a foreign company establishes a branch in Argentina, yet it does not imply the creation of a new legal entity. While a branch must be registered with the public registry of commerce, the laws governing its existence and validity are primarily the laws of the company’s home country.
A branch office may undertake all activities pursued by a company’s head office (HO) on behalf of the HO through the branch office staff member appointed as the company’s representative. The assets of the entire foreign business – that is, the total value of the HO’s capital, not only the capital the HO assigns to its Argentine branch –is subject to liability. The branch office’s accounts must be kept separately from the HO’s operations, and its financial statements must be filed periodically with the public registry of commerce.
The branch must be managed by a legal representative vested with broad administrative and judicial authority – which may be limited in certain circumstances – to ensure that all of the branch’s affairs and business transactions are conducted efficiently. Branch offices are subject to supervision by the public registry of commerce and must comply with the same requirements as corporations.
Establishment or acquisitionedim
The Business Associations Law (no. 19550) establishes a wide range of forms of companies. The forms most widely used by foreign investors are corporations (sociedades anónimas, or SAs, as regulated under Argentine law) and limited liability companies (sociedades de responsabilidad limitada, or SRLs, as regulated under Argentine law). Unlike branch offices, company liability is limited to the amount invested in the business.
Unlike local companies, foreign companies must submit proof of their formation or incorporation in their countries of origin to the public registry of commerce before they can set up a company or acquire ownership interests in an existing one. They must also file their articles of formation or incorporation, bylaws, amendments and any other documents relating to their legal representatives that may be required to conduct business.
Corporation. A corporation (SA) has a legal existence separate and distinct from its owners. Its shareholders are limited in liability in terms of the amount they have invested in the corporation.
At least two shareholders are required to form a corporation. Ownership interests are represented by shares of stock, which may or may not be offered to the public.
The operation of these companies is regulated by their corporate bylaws. The general business affairs of the corporation are managed by a board of directors comprised of one or more members, who may be shareholders. The majority of the board members must be Argentine residents. There are no restrictions regarding shareholders’ residency or nationality; however, foreign commercial company shareholders must register first with the public registry of commerce.
The board members are jointly and severally liable, without limitations, to the company, its shareholders and third parties for poor performance, breaking the law and/or bylaws, and any other damages arising from fraud, acting beyond the scope of their authority and gross negligence.
In Argentina, corporations are subject to internal and external audits. External audits are undertaken by the relevant authorities in the jurisdiction. There are also regulatory organizations to review certain activities.
Internal audits are usually carried out by one or more company auditors appointed by the shareholders at the annual meeting. Those companies not under the control of a governmental entity are not obliged to appoint company auditors. The bylaws may also establish the creation of a surveillance committee of three to 15 shareholders to monitor corporate management.
Limited liability company. A limited liability company (SRL) shares many characteristics with an SA, but there are important differences to highlight.
- SRLs must have at least two members and no more than 50;
- An SA cannot be a member;
- SRLs ineligible to list on the stock market;
- Changing the members requires an amendment to the articles of association;
- Establishing SRLs is less complex;
- More flexible bylaws than an SA; and
- No minimum on capital, but the amount should be in line with the company’s purpose.
Foreign companies with ownership interests in an Argentina company. A foreign company that wishes to purchase ownership interests in a new or existing company must also meet the requirements mentioned above, but first register the company with the public registry of commerce. This involves a number of steps.
First, the foreign company must prove that it has been formed or incorporated in accordance with the laws in force in its home country.
Second, the company must file its original articles of formation or incorporation, their amendments and any other qualifying documents, amendments and documents related to its legal representatives with the competent public registry of companies. Should the company be a corporation, it must file these also with the superintendence of corporations.
Third, the company must submit the resolution to register a company in Argentina. This resolution must include the closing date of the fiscal year as well as the principal place of business and designated legal representative in Argentina.
Fourth, the company must inform the public registry of legal prohibitions or restrictions, if any, on activities in its home country, as demonstrated by the company’s articles of formation or incorporation and their amendments. It also must submit the names of partners, members or shareholders at the time of the application.
Finally, the company must provide evidence that it meets at least one of three requirements outside Argentina on the date of application for registration, as set out below. The latter two must be evidenced by the company’s financial statements or certificates signed by its officers, as taken from the records on the company’s books.
- One or more branch or representative offices, evidenced by certificates of good standing issued by competent authorities;
- Ownership interests in other companies consisting of non-current assets, as defined by generally accepted accounting principles; or
- Ownership of fixed assets in its home country and evidence of their value.
Ministry of Foreign Affairs and Worship
Esmeralda 1212 – Piso 6
Ciudad Autónoma de Buenos Aires
(C1005AAG) República Argentina
电话 Tel: 54 11 4819 7904
传真 Fax: 54 11 4819 7904