Starting a Business In Argentina

Business Opportunities in Argentina

Argentina boasts abundant resources and great potential for future growth. Argentina’s energy sector holds significant promise with the world’s second-largest shale gas reserves, fourth-largest shale oil reserves, and a wealth of solar and wind resources. 

Developing sectors such as agriculture and energy require access to advanced U.S. technology, equipment, and expertise. In addition to being digitally capable, Argentina has a relatively equitable income distribution compared to other Latin American nations. The country is home to a sizable middle class, with a strong demand for American consumer goods.

The country offers several sectors with significant business opportunities for businesses planning for Argentina business incorporation. The Argentine government supports the oil and gas industry and further encourages exploration and production, particularly in Vaca Muerta and offshore exploration. Renewable energy also presents medium and long-term prospects with oversubscribed energy auctions from renewable sources. 

Agricultural technology and machinery are other vital sectors, with two-thirds of Argentina’s exports being agricultural. Public-private infrastructure projects and investments in roads, rail, ports, and utilities have attracted funding from the Inter-American Development Bank and the World Bank. However, federal spending cuts and Argentina’s current high “country risk” level mean $55 billion in planned PPP infrastructure projects (planned 2017-2025) are on hold. 

The Argentine government emphasizes efficient spending, accessibility, and modernization in healthcare technology, including e-health, through its National Healthcare Plan The city of Buenos Aires plans to upgrade 14 hospitals. Healthcare-based companies planning for company incorporation in Argentina can benefit from the incentive mentioned above. 

Through this article, you will gain a deeper understanding of the process for the company registration process in Argentina and learn how to start a business in Argentina.

Benefits of Starting a Business in Argentina

Businesses planning for Argentina business incorporation must be aware of the advantages of doing business in Argentina. The pros of setting up a company in Argentina are plenty; here are a few:

• One of the primary benefits of setting up a company in Argentina is its participation in Mercosur. It is a regional trading bloc comprising Argentina, Paraguay, Brazil, and Uruguay as its founding members, with other South American nations as associate members. This bloc offers access to a population of over 250 million people and accounts for nearly three-quarters of the total economic activity in South America.
• Argentina’s commitment to connecting with the global economy and playing a vital role on the world stage was highlighted by its presidency of the G20 in 2018. 

1. 1. As a member of the Mercosur trading block, companies in Argentina benefit from its relationships with its largest trading partners, including China, the European Union, and the United States. 
   2. Argentina has experienced significant international trade and investment in recent years, with the EU being Mercosur’s top trade and investment partner. Moreover, this deal creates fresh possibilities for EU goods and other products by eliminating steep tariffs in a market that has a growing ability to buy, thus benefitting those planning to start a business in Argentina.

• One of the significant advantages of doing business in Argentina is its highly educated population, with over 43 million people completing secondary education. Moreover, many Argentinians speak English proficiently, with an EPI score of 566, the highest in Latin America, according to the English First’s English Proficiency Index. 

1. 1. Companies appreciate the benefits of doing business in a country with several highly skilled English-speaking professionals, eliminating the need for costly translation services and overcoming language barriers in international business ventures.

• Agriculture is a significant industry in Argentina, recognized as one of the world’s largest agricultural producers. The country boasts a vast network of industrial and smallholder farmers and is a major supplier of soy, wheat, corn, fruits, and other crops. Thus, agro-businesses planning for company incorporation in Argentina can benefit from the country’s booming agriculture industry. 

Requirements for Starting a Business in Argentina

Businesses planning to set up an offshore company in Argentina have to fulfill specific requirements to do business in Argentina. The most crucial paperwork required to start a business in Argentina is:

Unique Tax Identification Code

To commence any economic activity in Argentina, citizens and companies must register with the AFIP (Federal Administration of Public Revenues) and obtain a Unique Tax Identification Code (CUIT). 

Shareholders

You can start a business in Argentina with at least one shareholder, a person, or a legal entity.

Deposit of minimum paid-up capital

To start a business in Argentina, it is required to deposit at least 25% of the initial paid-up capital with the Argentine National Bank, Banco de la Nación Argentina. The company must pay the remaining 75% within the next two years.

Articles of incorporation

To start a business in Argentina, the founding partners must provide their signatures on the articles of incorporation in the presence of a notary public. The articles of incorporation must include essential details such as the founding partners’ information, the company’s name and address, the objective of the company, the share capital, the duration of the company, the internal administration, rules regarding profit distribution and loss-bearing, and rights and obligations between partners. Additionally, the articles must include clauses related to the company’s dissolution and liquidation.

Types of Business Structures in Argentina

You can opt for one of the following business establishments if you want to start a business in Argentina:

Sole proprietorship (Persona Física)

• The sole proprietorship is the most popular and straightforward business structure for companies wanting to start a business in Argentina. 
• It is owned and operated by an individual who assumes full responsibility for the business and its debts.

Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

• An SRL can have one or more members; the minimum share capital is ARS 10,000. 
• It is the equivalent of a limited liability company in other countries. 
• The members’ liability is limited to their contributions.

General Partnership (Sociedad en Comandita Simple or SCS)

• This form of partnership has two types

1. 1. The general partners oversee the business and have unlimited liability. 
   2. The limited partners contribute capital but have limited liability.

Company limited by shares (Sociedad en Comandita por Acciones or SCA) 

• It is another form of partnership for companies wanting to start a business in Argentina where there are two types of partners: the general partners who manage the business and have unlimited liability, and the limited partners who contribute capital but have limited liability. 
• The use of shares differentiates it from the SCS.

Company Registration Process

Step 1: Define the legal structure of your company

• Determining the type of business you want to establish, and the corresponding business plan is crucial if you plan to set up an offshore company in Argentina.  
• It will enable you to identify the appropriate legal entity that provides the necessary governance structure. 
• The Argentine Companies Law provides several legal entity options, each with unique characteristics. Selecting one that best suits your intended commercial activities and governance requirements is essential.

Step 2: Appoint a Power of Attorney

• The next step in setting a company in Argentina is to create and sign a Power of Attorney document that authorizes a legal expert to establish the company on your behalf. 
• If you or your partners are non-residents, appointing a local lawyer is necessary. The appointed lawyer will form the company and represent you during the process. 
• This document’s purpose is to provide the necessary authority to the appointed lawyer to carry out the company formation process and ensure that your business operates legally in Argentina.

Step 3: Choose and reserve your company name

• Selecting and reserving the company name is the third step in setting a company in Argentina. 
• The IGJ is responsible for verifying and approving the company name and initiating the process by submitting a request through the official website and the required payment.

Step 4: Create the bylaws or social compact and certify it

• To start a business in Argentina, you must prepare your company’s bylaws, which serve as a social contract and lay out your commercial objectives. 
• All company shareholders must sign this document, and the signatures must be certified by a Public Notary. 
• Once completed, the bylaws must be registered with the Public Registry of Commerce to establish your company in Argentina.

Step 5: First investment in the National Bank’s share capital

• While setting a company in Argentina, depositing a minimum of 25% of the subscribed capital to the Bank of the Argentine Nation and obtaining proof of payment is required. 
• Alternatively, the business can present an estimated amount in cash to a Notary who will certify the amount. 
• You can withdraw this amount after registering the company’s bylaws with the Public Registry of Commerce.

Step 6: Publicize the founding of your business

• To announce the formation of your new business in Argentina, you must publish a notice in the Official Gazette, a national publication. 
• A registered lawyer can only carry out this step. 
• It’s important to note that the Official Gazette charges per line published the cost is around ARS169 (approximately US$2.90) per line.

Step 7: Incorporation fee payment

• To set up an offshore company in Argentina, you must pay a fee for the forms and processing costs associated with submitting the necessary documents. 
• You can complete the process online via the Ministry of Justice and Human Rights website.

Step 8: Register the business’s books

• When setting up a company in Argentina, it is necessary to register various accounting books such as journals, inventories, and balance sheets, along with additional books containing meeting minutes, board minutes, records of actions, share deposits, and attendance records. 
• You must formalize these books by submitting them to the Public Registry of Commerce.
• The Public Registry of Commerce may provide certified copies of some of these books directly to the company. 

Step 9: Get a CUIT, or unique tax identification number, and register with the social security

• To obtain a Unique Tax Identification Code (CUIT), a business planning to set up an offshore company in Argentina must go to the Federal Public Revenue Administration (Administración Federal de Ingresos Públicos, or AFIP) unit at the company’s registered address. 
• It is necessary to present proof of company registration before the Public Registry of Commerce, along with other relevant documentation.
• After obtaining the CUIT, one can register taxes and social security on the AFIP website by logging in through the profile of the company’s administrator or manager.
• It is important to note that the company’s partners, legal representatives, or administrators must have already obtained their own Fiscal Code (CUIT) or the foreign equivalent (CDI) from the National Public Revenue Administration.

Step 10: Create a business bank account

• To conduct commercial transactions, your business will need a corporate bank account.
• The documentation needed to open a corporate bank account may vary slightly depending on the bank in Argentina. 
• Typically, you must provide identification for your business shareholders and details about your new business.
• By providing this information, you can open a corporate bank account and start conducting commercial transactions for your business in Argentina.

How Much Does it Cost to Incorporate a Company in Argentina?

The cost of incorporating a company in Argentina in Year 1 is ARS 1,447,025, while the annual company costs in Year 2 and beyond the amount to ARS 322,140. The average total fees per engagement, which includes Argentina business incorporation, government fees, an estimate of tax registration fees, and a corporate bank account, amounts to ARS 3,947,920.

Are Foreigners in Argentina on Certain Passes Allowed to Start a Business in Argentina?

To start a business in Argentina, foreign nationals must obtain a visa or residence permit. Mercosur Agreement citizens are usually exempt from needing a sponsor and can work once granted residence or a visa. However, sponsors support non-Mercosur Agreement nationals who wish to start a business in Argentina.

Before the COVID-19 pandemic, two options were available for applying for a temporary Mercosur visa. An unsponsored Mercosur visa had to be requested either in the applicant’s country of residence at the corresponding Argentine Consulate or in person at the DNM in Argentina. Applicants needed to schedule a meeting at the Argentine Consulate and submit required documentation, including criminal records, identification or passport, an address certificate, a 4×4 picture, and proof of payment of consular fees.

Once the consulate grants the visa and stamps in the passport, Mercosur expatriates are permitted to enter and reside in Argentina for up to two years.

Government Assistance for Foreign-owned Businesses 

The following list summarizes the main commercial incentives you’ll get for Argentina business incorporation. The grants for starting a business in Argentina are as follows: 

• For companies planning to start a business in Argentina, the country offers promising investment and trade prospects, with potential opportunities in various sectors, such as infrastructure, health, agriculture, information technology, energy, and mining. In 2018, President Mauricio Macri pursued a policy of market-oriented economic reforms aimed at reducing the effects of previous administrations’ market-distorting economic policies.
• Since taking office in December 2015, the Macri administration has endeavored to streamline bureaucratic procedures involved in business creation, implemented some tax reforms, encouraged foreign direct investment, and initiated labor reforms through sector-specific agreements with unions.
• The Macri administration in Argentina actively seeks foreign direct investment and has enacted various reforms to improve the investment climate. These reforms include simplifying bureaucratic procedures, increasing transparency, reducing costs, adopting good regulatory practices, and improving capital market efficiencies.
• Since 2016, Argentina has expanded its economic and commercial cooperation with various countries, such as Chile, Brazil, South Korea, Japan, Spain, Canada, and the United States. Argentina has also increased its engagement in international fora, including the G-20, WTO, and OECD.
• In the past year, Argentina has introduced new gas and energy, communications, technology, and aviation regulations to improve competition and offer incentives to attract investment in these sectors. The country seeks tenders for investment in wireless infrastructure, lithium mines, oil and gas, renewable energy, and other sectors.
• In Argentina, foreign and domestic investors typically compete under the same conditions, with some restrictions in certain sectors such as aviation and media. Additionally, there are restrictions on foreign ownership of bodies of water, rural productive lands, and areas along borders.
• To support investment and trade, Argentina has a national Investment and Trade Promotion Agency that offers information and consultation services on economic and financial conditions, investment opportunities, Argentine laws and regulations, and services to help Argentine companies establish a presence abroad. The agency also offers matchmaking services and organizes roadshows and trade delegations to facilitate investment and trade opportunities.

How Can Multiplier Help?

Company registration in Argentina can be time-consuming due to the need to comply with the country’s tax and labor laws. However, companies looking to expand internationally can benefit from working with international EOR services like Multiplier.

Companies can employ talented professionals through Multiplier’s EOR services without setting up a new subsidiary in the country. It allows businesses to test market opportunities and save on hiring expenses while attracting top talent. Multiplier also assists with employment contracts, payroll management, and multi-country transactions, ensuring compliance with local laws and business establishment processes.

Working with a team of experts from Multiplier can simplify the process of expanding a business in Argentina and help companies navigate the complex legal and regulatory landscape.