Regulations In Argentina

Author:Mr Ricardo Beller
Profession:Marval O'Farrell & Mairal

Argentina is seeing an increasing government tendency towards intervention and regulation of economic activities. Almost all aspects of economic activity are currently being affected. Measures include restrictions on transfers of funds abroad, restrictions both on the import and export of goods, limitations on the acquisition of real estate by foreigners, and increasing regulation and scrutiny of companies that carry out certain activities such as broadcasting and oil & gas. These are only some examples.

Regulation and government intervention per se should not necessarily have a negative impact. However, when these create uncertainty, economic activity is invariably affected. The higher the uncertainty, the higher the negative effect. This applies especially to transactions that require a huge investment and a long ROI period.

Uncertainty is the main challenge Argentina faces at the moment. Profitable business opportunities exist, but the analysis of the risk involved must increasingly include an evaluation of political and macroeconomic aspects of the proposed transaction.

Due diligence in Argentina should not only include the typical range of issues, but also a much broader scope of questions, such as: Is this company in a strategic sector that may result in delays or non-approval of the antitrust authority? Is this a real estate company...

To continue reading