The Argentine government is implementing a policy to encourage foreign direct investment (FDI) for the free inflow of foreign currency, and foreign direct investment plays a role in promoting Argentina's external competitiveness and developing Argentina, which lacks capital.

1994 According to the Foreign Investment Act, which has been in effect since 1994, the Argentine Constitution equally recognizes foreigners' labor rights, business operations, and the right to sell assets. There are no special incentives for general foreign investment, but separate incentives are provided mainly in industries that need development in Argentina.(Most incentives have a lot of tax credits.)

Foreign investors have the right to remit investments and total profits abroad, but it is difficult to remit them abroad due to the current government's tightening of foreign exchange regulations. Currently, it is impossible for overseas investors to remit profits obtained from investing locally to their home countries, and it is very important to reinvest the profits locally or manage them well until future negligence remittances are possible.

Foreign investment is eligible to use all forms of corporation specified in domestic law, and under Executive Order 21382, foreign investors investing capital in Argentina have the same rights and obligations as domestic investors.

Investment Incentives

• Tax incentives for the promotion of the mining industry Incentives are granted for exploration, development, preparation, extraction and specific treatment of minerals only for selected companies. The following tax benefits are provided for projects in each province.

  • VAT, social security tax, and total tax burden imposed by each province are maintained at the same price for 30 years from the date of filing of the company.

  • ROYALTY: Royalty imposed by the province is limited to 3% of the extracted mineral value.

• Tax credit for research and development projects Development and research companies in Argentina can receive tax credit certificates worth up to 10% or $5 million of the amount spent on annual research projects.

• Investing in Capital Assets and Infrastructure Projects The scheme is one of the incentives given to a company newly entering an infrastructure development project, which may be reimbursed for capital assets included in an investment project or VAT included in an infrastructure project, or subject to accelerated depreciation of certain assets under certain asset.

Software Industry System

It is a tax benefit provided for the software industry such as program development and design. According to Act No. 26692, taxpayers (both corporations and individuals) are not included in all national tax increases until December 31, 2019, and taxpayers are reduced to 70% of the social security tax borne by the employer. In addition, income tax is deducted up to 60%.

Biofuel Industry

Bioethanol, biodiesel, and agricultural biomaterials produced from agricultural raw materials, agricultural or organic wastes are treated as biofuels, and incentives are applied by calculating costs such as income tax and VAT reductions or fuel transportation costs.

Modern Biotechnology

Tax breaks are implemented for companies conducting research, development and production projects on modern biotechnology.

Special Economic Zones

Tiera del Fuego: The Government do not tax all economic activities established in Tiera del Fuego. Imports or exports of current assets are also exempt from taxation.

Renewable Energy

The government is focusing on renewable energy projects with the aim of developing renewable energy. The goal is to increase the use rate of renewable energy to 8% by 2017 and 20% by 2025. Developers are provided with the following incentives.

• Early refund of VAT and income tax

• Compensation for Losses Due to Profits: Taxes are reduced if there is a loss to the business. Extend the period of compensation for losses to 10 years.

• Taxes on minimum estimated income: Assets related to activities recognized by this Act are not included in the tax base for minimum estimated income tax.

• Reducing the financial burden of financial liabilities: It reduces financial liabilities such as losses and interest incurred by the company's project.

• Tax exemption on dividends or dividend payouts: dividends paid by the company that owns the project will be exempted from 10% income tax.

• Tax certificate: 60% returned by the state for electromechanical installations used in investment projects. This is reimbursed through tax.
  In addition, the Renewable Energy Development Fund (FODER) is a public trust fund aimed at financing projects, issuing securities, and investing in renewable energy companies.

Restrictions and Prohibitions (By Industry)

There are no restrictions or prohibitions specified by the Argentine government.

Special Economic Zone (Zonas Francas)

In special economic zones, commerce is not subject to the general tariff system, so taxes on imports and exports are not imposed. The primary purpose is to promote trade and industrial export activities while providing financial incentives through cost reduction and simplification of administrative procedures. Logistics storage, commerce, and industry are the primary targets, with exceptions for weapons, ammunition, and projects that pose threats to plant and animal health, safety, and environmental protection.

Under Argentina's current law, bonded areas can be established in 23 provinces and four special areas. In the case of Tierra del Fuego, the entire state has been designated as a special tariff area. La Plata is Argentina's largest port and has been established as a logistics-oriented bonded area due to its favorable location, just 70 km from Buenos Aires. Additionally, bonded areas are being established in significant regions such as Colombia, La Pampa, San Luis, and Mendoza.

As of May 2022, Argentina has 14 free trade zones in 12 provinces, in addition to Tierra del Fuego. These include Buenos Aires Province (La Plata, Bahia Blanca), Cordoba Province (Cordoba), Chubut Province (Comodoro Rivadavia), La Pampa Province (General Pico), Mendoza (Luhan deyo, Mishio), Altacio, and Uruguay (Altasio).

Except as an exception to the criminal nature stipulated in Article 590 of the Customs Act, goods entering and leaving these areas are exempt from the tax, customs, and financial provisions applicable to the Argentine general customs domain.

The Tierra del Fuego (TDF) area is a special tariff area that can import and export goods without tariffs until 2023 under the South American Joint Market Convention. In accordance with Act No. 19640 enacted in 1972, the following national taxes are reduced and exempted:

• VAT, Export Tax, Statistics Tax Exemption

• A reduction in income tax

• Exemptions from tariffs and VAT on imports of capital goods

• Tariff exemptions for imports of raw materials

• Reimbursement of relevant taxes on exports by sea transport

How to select a location:

It is possible to check advantageous location information by contacting the Argentine Investment Agency (AAICI) and the state government in advance. In principle, there is no incentive to establish a factory, but since Brazil, a member of the South American common market, recently provides tax exemptions to attract manufacturing at the local government level, Argentina also provides incentives to use idle facilities and create jobs. In addition, in order to receive support for local investment, it is also good to contact the Argentina Investment and Trade Promotion Agency (AAICI) under the Ministry of Production from the beginning.

Priority review of moving into a free trade zone or industrial complex

Since the establishment of a free trade zone to attract foreign investment is active, moving into the complex can also be considered. Various taxes (real estate tax, income tax, etc.) can be exempted if the factory is attracted and operated through the move-in of the Industrial Complex.

Buenos Aires (Buenos Aires)

• Area: 203 km²

• Population: 1.66 million

• Provincial capital: Buenos Aires

• Major institutions: areas where major public institutions and universities are concentrated

• Key industries: crops (soybean, wheat, sunflower, peanuts) and agricultural machinery, automobiles, IT and other service industries

• Note: In the case of Argentina, one-third of the population is concentrated in the city and state of Buenos Aires, so in terms of commercial districts, most of them enter the Buenos Aires region.

Neuquen

• Area: 63 km²

• Population: 620,000

• Provincial capital: Bakamuerta

• Major institutions: Major oil companies such as Pan American Energy

• Major industries: Neugen State, where shale gas reserves are located, has a concentration of oil companies and energy industries. In addition, it is an area with a lot of fish and fruit production due to low temperature and high precipitation.

• Note: To meet Argentina's domestic energy needs, the federal government is announcing plans to invest in renewable energy and provides various incentives and tax exemptions to newly entering individuals or corporations under Act No. 26,190.

Cordoba

• Area: 222.4 km²

• Population: 1.39 million

• Provincial capital: Cordoba City of Córdoba

• Major institutions: Intel, Fiat, BMW

• Major Industries: Automotive, IT Industry Research Institute

• Note: Most of the automobile production plants are concentrated in the city of Cordoba. In the case of the IT industry, multinational companies such as Intel are establishing research institutes in Cordoba. This area consists of a vast meadow area and is adjacent to the metropolitan area, which is a densely populated area, so it is also a preferred area for dairy companies.

Argentina's corporate establishment-related law is stipulated in Act No. 19550, the Ley General de Sociedades.

When a company is established, it can take the form of a corporation (S.A.: Sociedad Anónima), a limited liability company (S.R.L.), a joint venture (S.C.: Sociedad de Comandita), a private company, or a branch office.

When investing in foreign companies, there are three types of investments: a stock company, a limited liability company, and a branch office.

Limited companies are easier to establish in terms of procedural requirements, while stock companies offer advantages in terms of improving external credit and local financial procurement.

Limited companies are primarily used for establishing businesses by trusted individuals, such as relatives and friends.

Additionally, there are no restrictions on foreign ownership, no obligation to reinvest profits, no requirement to convert corporate forms to domestic commercialization, and it's possible to acquire 100% of the stock from domestic companies, allowing for various investment methods, including solo and joint ventures.

In Argentina, as in other countries, businesses can operate under various structures. The choice of structure depends on the purpose, investment capital, member characteristics, and tax considerations.

Co., Ltd. has the advantage of being able to raise funds externally through stock issuance. Therefore, for relatively large-scale projects, such as public institutions, other corporations, and wholesalers, the form of a stock company is preferable to that of a private company. There is no significant difference between establishing a stock company and a limited company. Shareholders in a corporation and joint investors in a limited company limit their liability to the capital they commit to when signing the company's articles of incorporation, as stated in a fair certificate.

Limited companies are useful for establishing small and medium-sized enterprises or startups because they require less initial capital than stock companies, are easier to set up, and entail fewer government sanctions later on. Recently, in an effort to attract more foreign investment, the Argentine government has implemented a simpler procedure for establishing corporations. The establishment must be registered with the Inspección General de Justicia (IGJ), a federal government institution, and must be approved. Once registered with the Registro Público de Comercio, the entity can function as a corporation.

Documents submitted to the Corporation Office (IGJ) when registering a foreign corporation

• Depending on the nature of each corporation, the required documents may vary, but most can be registered as local foreign corporations. According to a local lawyer, it typically takes about a month to prepare all the necessary documents.

• Any document mentioned must be notarized or certified by a competent court and bear the relevant apostille (certification of the host country) as per the 5 October 1961 Hague Convention.

• Copies of valid corporate contracts and the final revisions of foreign companies.

• A summary of the articles of incorporation from the Commercial Registry.

• A board decision.

• A certificate guaranteeing that none of the activities or principal activities carried out by the notary representative (employee) during the establishment and registration or merger of the enterprise are prohibited or restricted.

• Power of attorney for the appointed representative to establish and register the enterprise with the Corporation and other relevant agencies.

A foreign company must meet one or more of the following conditions

• Operate one or more branches, agencies, or offices outside Argentina.

• Hold the right to use non-current fixed assets or assets of a third party with such properties located outside Argentina.

  • Specifically specify non-current fixed assets and corporate activities not compliant with stock offering rules.

  • Present the value of the most recent settlement (balance sheet) approved in advance (the period should not exceed one year). For the management of assets of a third party, a certificate indicating the assets and gross income managed based on the financial statements in item 6-2-2 is required.

• Participate in other companies unrelated to stock offerings or invest in a predetermined stock market.

  • For stock market investments, a certificate of transactions made during the year immediately preceding the registration request must be submitted. It should include information on the type of stock, transaction volume, total amount, stock exchange where the transaction was made, exchange rate, and bond trading base price at the date of issuance of the certificate.

  • To fulfill item 6, a foreign company may provide financial statements.

  • Financial statements may be signed by independent accountants certified by authorities related to foreign companies or a combination of accountants. However, if no such accountant association exists in the home country of a foreign company, a certificate of the absence of an accountant association issued by a notary must also be submitted along with the financial statements

1. A certificate attesting to the validity of the entity and confirming that the entity is not involved in liquidation or subject to any legal proceedings that restrict its property and activities.

2. Certificate of identification of the co-investor or shareholder of the company when deciding to apply for company registration.

3. Once a branch, office, or agency of a foreign company is registered with the Corporation, the financial statements of the registered entity, branch, or permanent agency must be submitted, along with the audit report of the Corporation, within 60 days after the settlement date of the last fiscal year.

The branch office is not a separate corporation independent of the headquarters, but a part of the headquarters, and the law that applies to the headquarters (national law where the headquarters are located) also applies to the branch office. Foreign-based companies need to register their branches with the Registro Publico de Comercio. At the time of registration, the corporate name of the headquarters may be used or a third name may be used. Registration must be made in the name of a corporate representative and must be notarized by the home country and Argentina. The branch is obligated to comply with all the requirements of the Argentine company law, and accounting books must be prepared separately from the headquarters and presented to the tax authorities if necessary.

The branch office may utilize or perform all the tasks corresponding to the headquarters, but since it is not a separate corporation, the final responsibility for the operation of the branch office lies with the headquarters. However, in order to maximize the use of the branch, such as supporting the headquarters' business activities, it is necessary to grant more authority to enable activities necessary for the operation of the branch.

Like corporations, branch offices must be registered with the Inspeción General de Justice (IGJ), an affiliated organization of the federal government, and then approved. The registration documents are the same as the corporation.

Documents submitted by the Corporation Agency (IGJ)

• Depending on the nature of each corporation, the following documents may vary, but most of them can be registered as local foreign corporations. According to a local lawyer, it usually takes about a month to prepare all documents.

• Any document stated shall be certified by a notary or competent court and recognized with the relevant apostille (certification of the host country). (5 October 1961 Hague Convention).

• Copies of valid corporate contracts and final revisions of foreign companies

• a summary of the articles of incorporation of the Commercial Registry

• a board decision

• A certificate guaranteeing that none of the activities or principal activities applied by the notary representative (employee) during the establishment and registration or merger of the enterprise are prohibited or restricted.

• Power of attorney to the appointed representative for establishing and registering an enterprise with the Corporation and other agencies.

• A foreign company must ensure that it fulfills one or more of the following conditions.

  • Operate one or more branches, agencies, or agencies outside Argentina.

  • Holds the right to use non-current fixed assets or assets of a third party with such properties elsewhere than Argentina

  • Specifically specifies non-current fixed assets and corporate activities that do not comply with the stock offering rules.

  • Present the value of the most recent settlement (balance sheet) approved in advance (the period does not exceed one year).(6-2-2)
    * For the management of assets of a third party, a certificate indicating the assets and gross income managed based on the financial statements in item 6-2-2.

  • Participate in other companies that are not related to stock offerings or invest in a predetermined stock market. * For stock market investments, a certificate of transactions made during the year immediately preceding the registration request must be submitted. It should include information on the type of stock, the volume of transactions, the total amount, the stock exchange where the transaction was made, the exchange rate, and the bond trading base price at the date of issuance of the certificate.

    • To carry out item 6, a foreign company may send financial statements.

    • Financial statements may be signed by independent accountants who are certified by authorities belonging to foreign companies and a combination of accountants. However, if there is no such accountant association in the home country of a foreign company, a certificate of absence of the accountant association issued by a notary must also be sent along with the financial statements.

    • Documents to comply with this item must come from abroad, be applied by the employees of the company, and state that the authority of representation lies with the notary public or public official.

• A certificate that warrants the validity of the entity and that the entity is not involved in liquidation or in any legal proceedings that constrain property and activities.

• Certificate of the individualization of the co-investor or shareholder of the company when deciding to apply for company registration.

• Once a branch, branch or agency of a foreign company is registered with the Corporation, the financial statements of the registered representative, branch or permanent agency must be submitted with the audit report of the Corporation within 60 days after the settlement date of the last fiscal year.

In Argentina, the same document procedure is carried out with a concept like that of the branch office

"Co., Ltd." is the most widely used form of business organization, and matters concerning the establishment and operation of a corporation are stipulated in the Federal Government Companies Act. The establishment must be registered with the Inspección General de Justicia (IGJ), an agency under the federal government, and then approved. After obtaining approval, you can commence business activities by registering with the National Tax Service and obtaining a taxpayer number (CUIT).

At least two shareholders are required, and shareholders are liable within the paid-in capital. Shareholders are not restricted by nationality or residence, and the majority of shareholders must be permanent residents of Argentina.

The minimum capital required to establish a company is 100,000 pesos, and there must be an internal and external audit department.

The general shareholders' meeting, involving the company's management, must be convened within four months based on the settlement date, during which capital increases and reductions, as well as daily tasks, are determined. The board of directors is responsible for company management, and directors are appointed at the annual general shareholders' meeting, with no limit on the number of directors (even one person is allowed). However, if the stock is listed and publicly owned, or if the capital exceeds 10 million pesos, at least three people must be appointed. The Board of Directors is required to hold meetings at least once every three months.

As of April 4, 2018, regulations have been enacted to allow corporations to be established within 24 hours if they pay additional costs in urgent cases. If no other issues are found, a taxpayer unique number (CUIT) will be issued 24 hours after registration.

A limited company is a type of company widely used when operating small and medium-sized enterprises, similar in form to a stock company, and it is a common company structure in Argentina. The characteristic of a limited company is that the participation limit is set at two to 50 members (shareholders). The company's capital is allocated by each member, and responsibility and authority are granted to each member based on their stake.

Members may not arbitrarily transfer their shares to individuals outside the membership. The highest decision-making body is the general shareholders' meeting, and the company is managed by a member representative. The representative may be one person or may be jointly operated by multiple individuals. Since there is no board of directors, all decisions are made directly at the general shareholders' meeting and can be executed promptly, giving it the advantage of speed.

While there is no minimum capital requirement, consulting firms often recommend about $1,100 as an appropriate amount. A limited liability company must establish terms and conditions that stipulate contracts between investors, capital investment provisions, management responsibilities, investor changes, internal audit requirements, and liquidation procedures. Limited liability companies have a simpler establishment process than corporations, but when regulations are altered, the consent of the majority (or unanimous consent) of the investment members is required, which can sometimes pose challenges to the company's continuity. Limited liability companies have a shorter establishment period and weaker government regulations or management compared to stock companies, especially if their capital is less than $700,000.

There must be at least two and a maximum of 50 investment members. An investment member can be an investor regardless of nationality or residence, or a foreign company or stock company.

From July 12, 2017, regulations were enacted to allow limited liability companies to be established within 24 hours in urgent cases. If no other issues are identified, a unique taxpayer identification number (CUIT) will be issued 24 hours after registration

Many individual entrepreneurs choose this form because it is easy to establish and inexpensive. You can apply for business registration through the federal government's National Tax Service or a local tax office under your personal name, and it can be completed on the same day. The conditions for the application require individuals to be adults aged 21 or older, as recognized by Argentine law. Foreigners must possess permanent residency or short-term permanent residency, which can be obtained through a work visa. You must obtain a certificate of residence confirmation through the competent police station in advance and submit it.

At the end of the business registration application, a taxpayer identification number (CUIT) will be issued. This number serves as a taxpayer's ID card, which is essential for conducting business activities, as well as for ordinary citizens' lives. Individual businesses or self-employed individuals must apply for a business license from the competent city hall. The business tax, which is the tax payment, is determined every month based on the size of the business transactions, and the competent authority for tax collection is the city hall tax office.

Individual business operators retain all operating profits and are responsible for all business activities. Private companies may use an individual's real name or other alias externally.

This is a newly created form of corporate establishment in Argentina designed to promote business and corporate investment. The Corporation Agency (IGJ), a federal agency, is responsible for companies established in Buenos Aires, Argentina. Simple Co., Ltd. (SAS) is a private company that is relatively easier and simpler to establish compared to the existing forms of establishment, and it can be established digitally.

It offers the advantage of being simpler than the existing company establishment types, with relatively low registration costs, and the required capital for establishment is only half of the minimum wage. Furthermore, registration can be completed within 24 hours.

All the required documents for establishment are digitized, and every document must include a TAD digital certificate. Additionally, it can be established through a notary and can also be established under the Corporate Affairs Agency (IGJ), a federal government agency. When established through a notary, the notary must be a licensed user of TAD.

This type of company is a business entity based on a contract in which two or more individuals or corporations operate jointly, managing a general business and sharing the profits and losses of that business. Simple partnerships are interpreted in the same sense as "partnerships" in the United States. This business entity consists of a member who invests capital and another member who invests in technology and knowledge. Their relationship is established through a verbal or written agreement. While verbal partnership agreements may also be recognized, it is recommended to have written contracts between partners because proving them in court can be challenging. Each partner has unlimited personal liability and an equal say in management.

The existence of this company is not permanent, unlike that of a private company. The partnership is legally dissolved upon the death, bankruptcy, or withdrawal of any one of the partners, followed by the process of liquidation and termination of the partnership. A partner or an interested party may request dissolution from the court for various reasons, such as when a partner is deemed incompetent or unable to fulfill their obligations under a partnership agreement.