Choosing The Right Legal Vehicle To Do Business In Argentina: A Brief For Foreign Companies

Author:Mr Mario Eduardo Castro Sammartino
Profession:Castro Sammartino & Pierini
 
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There are different legal vehicles to do business in Argentina. The ones most commonly used by multinational companies are:

  1. Branches; and

  2. Subsidiaries, with one or more partners.

    The main features to ponder are:

  3. Branches

    1. The parent company is fully liable for all debts and liabilities the subsidiary may incur in;

    2. No capital allocation is required;

    3. Accounting must be kept separate from that of the parent company;

    4. They need to appoint a legal representative and set a legal address in Argentina.

  4. Subsidiaries

    1. The whole company may be owned by foreigners, and no resident partners are needed (except for certain regulated activities and assets, such as communication media and rural lands, where certain restrictions apply to foreigners);

    2. Partners may be individuals or legal entities. Foreign companies shall have to first register themselves with the Public Registry in order to incorporate or participate in a subsidiary; since this prior recording takes time, when time is of the essence of the business, the subsidiary may be constituted by individuals, who in due time assign their participation to the foreign companies once they have been registered with the Public Registry;

    3. Subsidiaries may have one or more partners. Subsidiaries may have only one partner as long as they incorporate themselves under the type of either a Single-Shareholder Company (Sociedad Anónima Unipersonal) or a Simplified Corporation (Sociedad por Acciones Simplificada), although this latter type also admits two or more partners. Subsidiaries with two or more partners have been customarily set up under the type of Limited Liability Companies (Sociedades de Responsabilidad Limitada) or Corporations (Sociedades Anónimas). Small or family-held companies usually adopt Limited Limited Liability Companies.

  5. SINGLE-SHAREHOLDER COMPANY

    Single-shareholder companies may have only one partner.

    1. The minimum capital stock is AR$ 100,000. It is represented in shares, and the partners are only liable for the contributions they have individually committed to complying. Shares may be assigned privately, with no report to and nor registry with the Public Registry;

    2. Management

      It requires at least one director residing in the country. If the board has more than one partner, the absolute majority of the directors must be Argentine residents.

    3. Audit

      It requires one active and one alternate syndic, both residents.

      For more information on single-shareholder companies...

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