Choosing a local director in Argentina when expanding your company into the country can be an important decision, because while you can select almost any legal adult for the role, the appointment is an opportunity to add some valuable local expertise to your organization. By choosing a local director with extensive knowledge of corporate law in Argentina, or any other professional service that you will need, you will have access to in-house knowledge that will be invaluable to the development of your business.
Argentina is the third-largest economy in Latin America, with a gross domestic product adjusted for purchasing power parity (GDP-PPP) of $903.5 billion (all figures in USD). Despite not being as well known as the likes of Brazil or Colombia as investment destinations, in 2019 Argentina recorded more than $6 billion of foreign direct investment (FDI) inflows.
The South American nation is at the higher end of upper-middle-income nations, with a gross national income (GNI) of $22,000 per capita and a highly-educated population, including a large and well-established middle class. Argentina has the highest level of English proficiency among non-English speaking countries in Latin America and the Caribbean, and the country’s professional services sector is highly developed.
Once referred to as ‘the world’s barn’ due to its fertile arable lands, Argentina benefits from having a well-developed agricultural sector and is a major producer of soybeans, beef, wheat, maize, cow’s milk, grapes, and chicken meat, among others. Argentina also has significant reserves of gas and lithium, as well as enormous potential for developing renewable energy sources.
If you are considering doing business in the country or have already entered the local market, read on to understand some of the things you will want to consider when hiring a local director in Argentina. Or go ahead and contact us now to discuss your business options.
Why do you need a local director in Argentina?
A local director in Argentina will represent your company before local authorities and will have budgetary influence in order to achieve the business objectives. A local director will also execute a range of managerial and administrative tasks, while overseeing the day-to-day activities of the local entity.
In so doing, a local director in Argentina will also manage your organization’s compliance with corporate regulations, guaranteeing that all tax, labor, accounting, and environmental protection requirements established by law are met. A local director can also supervise the recruitment, hiring, and training of qualified local staff.
It is recommended to choose a local director with a broad range of experience, not only because of the value they can add to your organization in terms of knowledge, but also in terms of the extended network of local officials, commercial associates, and potential clients they could give you access to.
Corporate and legal responsibilities of a local director
A local director in Argentina is going to be overseeing all of your operations in the country, and as such must be kept informed of all relevant commercial developments in order to be able to effectively manage local operations. Therefore, a local director must:
- Be informed about all projects carried out within the company, and their impact on the performance of the organization
- Participate regularly and actively in meetings with shareholders
- Communicate with company staff when necessary
- Access updated financial data to evaluate and manage the performance of the local entity
Likewise, a local director in Argentina has legal responsibilities tied to their role, including:
- Acting honestly at all times
- Guaranteeing that the company can pay all debts acquired before and during having held the position of local director
- Prudence in managing company income
- Acting in good faith and in the best interests of the company
- Keeping company information confidential and only using it in an ethical manner
- Ensuring that adequate and up-to-date financial records are maintained
Who can be a director of a foreign company in Argentina?
Any legal adult — either foreign or Argentinian national — can be a director of a company established in the country. In case there is more than one director, the majority must be of Argentine nationality. In addition, the local director of a company in Argentina must obtain an official tax ID (Código Único de Identificación Tributaria — CUIT) and make mandatory contributions during the term they serve in the role.
Note that a person residing outside of Argentina can assume the position of director. However, this will imply that on occasions she or he must be replaced by an alternate director for the development of various procedures that must be carried out in the country.
Biz Latin Hub can support your operations in Argentina
At Biz Latin Hub, we guarantee excellence in the delivery of our comprehensive portfolio of corporate support services, which are available in Argentina and 16 other countries in Latin America and the Caribbean where we operate. Our full suite of back-office assistance, including accounting support and legal services, facilitate investment throughout the region, and everywhere we operate we have highly qualified and experienced staff available to occupy directorships in order to guarantee you a smooth overseas expansion.
Reach out to us now to discuss your market entry options.
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