Do you have a brilliant business concept and are you eager to kickstart company incorporation in Argentina? Understanding the types of legal structures in Argentina is paramount for bringing your vision to fruition. With a variety of legal frameworks available, it’s crucial to select the appropriate structure that aligns with your business activities.
Argentina, as the third-largest economy in Latin America, teems with enticing business prospects. Boasting a GDP of USD$632.77 billion, the Argentine economy stands robust and ripe for investment. Moreover, the presence of established legal structures in the country influence the various types of legal structures in Argentina.
In this article, we’ll delve into the most commonly utilized types of legal structures in Argentina, equipping you with essential knowledge to navigate the legal intricacies and embark on your business journey confidently in this vibrant, burgeoning economy alongside Biz Latin Hub.
Why engage in Business in Argentina?
Argentina presents a multitude of reasons why it is a favorable destination for doing business. There is a unique blend of opportunities and legal structures in Argentina, each of which cater to diverse industries. This provides a solid foundation for international investors, ensuring transparency and protection.
Legal entities in Argentina, such as Sociedad Anónima (SA) and Sociedad de Responsabilidad Limitada (SRL), offer flexibility and liability protection, enhancing the appeal for entrepreneurs. These legal entities in Argentina facilitate efficient operations and compliance with local regulations. The government’s commitment to economic reforms further bolsters the business environment, attracting foreign direct investment.
Argentina’s skilled workforce, rich natural resources, and diverse industries create a robust market for goods and services. Legal structures in Argentina provide a framework for foreign entities to engage in partnerships with local companies, fostering innovation and collaboration.
The country’s strategic location and membership in the Mercosur trade bloc enhance its access to regional markets. Legal structures in Argentina also allow for easy repatriation of profits and capital. With a growing tech sector and emerging opportunities in renewable energy, foreign investors find Argentina’s business landscape promising.
In conclusion, Argentina’s favorable legal structures and legal entities create an environment ripe for international business ventures. The nation’s resources, workforce, and strategic advantages, coupled with its commitment to reforms, position it as an attractive destination for those seeking dynamic opportunities in Latin America.
3 Types of Legal Structures in Argentina
The most common types of legal structures in Argentina are:
- Corporation (Sociedad Anónima – ‘S.A’).
- Limited Liability Company (Sociedad de Responsabilidad Limitada – ‘SRL’).
- Simplified Shares Company (Sociedad por Acciones Simplificadas – ‘S.A.S’).
This article will provide you with the most commonly used types of legal entities in Argentina
1. Corporation (Sociedad Anónima – ‘S.A’)
The first type of legal structure in Argentina is a corporation, which requires a minimum of two shareholders. It is not important whether they are local or foreign. A corporation requires a minimum investment of AR$100,000, with a proportion of the company shares of at least 10% (max 90%). The Corporation must also have a board of directors of which the majority must reside in Argentina and hold annual shareholders’ meetings in order to assess the financial situation of the company.
2. Limited Liability Company (Sociedad de Responsabilidad Limitada – ‘SRL’)
An additional legal structure in Argentina is an SRL. An SRL can be formed with a minimum of two partners and a maximum of 50. The SRL requires minimum capital commensurate with the activity to be performed by the company, which is to be divided into stocks. This structure must be administered by a manager residing in Argentina. Similar to a corporation, a SRL must also assess annual statements through a yearly partner’s meeting.
3. Simplified Shares Company (Sociedad por Acciones Simplificadas – ‘S.A.S’)
The Argentine S.A.S was created in 2017 in order to simplify the process of establishing a legal entity in Argentina. This type of legal structure has the following advantages:
- Able to have a single shareholder (natural or legal person)
- Low minimum capital (twice the minimum wage)
- Quick formation time (the legal entity can be approved in 24 hours)
This new type of legal entity has been a key factor in the increased commercial interest in Argentina over the past year. Combined with investor-friendly reforms, Argentina is opening its doors to foreign participation, and the economy is feeling the benefits of this.
Our recommendation: The Simplified Joint Stock Company (S.A.S.) offers a combination of speed, flexibility and investor-friendly features that make it a suitable option for foreign companies wishing to establish a presence in Argentina.
Opening a local branch in Argentina
Installing a branch in Argentina is an attractive alternative option for companies who have headquarters in a foreign country. In order to install the branch, proof of the existence of the office overseas must be provided to local authorities. It suits already well-established companies looking to build on existing brand awareness.
The branch will have to prove the following conditions:
- A representative in the country where the company is being established.
- Carry out business in line with partnership purposes.
- Have own accounting and submit annually its balance sheet to the controlling authority.
FAQs on Types of Legal Structures in Argentina
1. Can a foreigner register a company in Argentina?
Yes, foreign nationals can register a company in Argentina. However, they may need to fulfill certain requirements and follow specific procedures outlined by Argentine law. It’s advisable to seek legal counsel to ensure compliance with regulations.
2. What type of legal entity is recommended in Argentina?
The recommended legal entity in Argentina often depends on various factors such as the nature of the business, liability considerations, and tax implications. Common options include Sociedad Anónima (S.A.), Sociedad de Responsabilidad Limitada (S.R.L.), and the Simplified Shares Company (S.A.S).
3. How do I create a legal entity in Argentina?
To create a legal entity in Argentina, individuals or entities must follow the registration procedures outlined by the Argentine government. This typically involves preparing the necessary documentation, filing with the appropriate authorities, and obtaining approval.
4. What is an LLC in Argentina?
In Argentina, an LLC (Limited Liability Company) is known as Sociedad de Responsabilidad Limitada (S.R.L.). This legal structure combines limited liability with operational flexibility, making it a popular choice for small to medium-sized businesses.
An example of an LLC in Argentina could be a small technology consulting firm formed by a group of software engineers. The liability of each member is limited to their respective capital contributions, protecting their personal assets from the debts and legal liabilities of the company. This structure gives them flexibility in management and taxation, while providing protection against individual financial risks.
Learn more about the types of legal structures in Argentina
Whichever of the types of legal structures in Argentina you choose, setting up a business can be a challenge. That-s why its best done with an expert. Ideally, work with a local partner who knows both the county and the region.
Get in contact with Biz Latin Hub – our team of local experts and professionals can support you and your business venture in Argentina with our services ranging from legal and commercial representation to market entry. Feel free to contact us now for personalized information.
Watch the following video for more information on doing business in Latin America!
After reading about the types of legal structures in Argentina, learn about how to do business in the region
