Company incorporation in Argentina is becoming more and more popular among foreign investors. The country boasts a large and diversified economy and a highly educated population that includes a well-established middle class and a growing services sector.
Hiring staff through an employer of record in Argentina is also a good choice for those looking for shorter-term or limited-scale operations. This allows you to hire local personnel without going through the processes of company formation and liquidation.
While Argentina has experienced some economic difficulties in recent years, the country has undergone significant growth since a famous debt crisis in the early 2000s, with the gross domestic product (GDP) (all figures USD) increasing more than four-fold between 2002 and 2021.
Like many countries, the economy took a beating during the challenging pandemic years. An optimistic sign for companies wanting to register a business in Argentina is that the recovery has been very strong. In 2019, the economy had a value of $447 billion of GDP after a high of over $600 billion in 2017.
At that point, Argentina was the third-largest economy in Latin America. It fell considerably during COVID, down to $385 billion in 2020. It then bounced back to above the 2019 level in 2021, showing optimistic signs for the future!
Gross national income (GNI) has more than tripled since the millennium. In 2021, Argentina registered a GNI of $10,630 — a figure that places it as an upper middle-income country by standards established by the World Bank. Constantly high figures for Foreign Direct Investment also explain why company incorporation in Argentina is a shrewd business decision. In 2021, Argentina received over $6 billion.
The country also has particularly high English proficiency levels. For first-time investors looking to incorporate a company in Argentina, this is a big help!
The Southern Cone country is part of many free trade agreements. Perhaps most notable is the Southern Common Market (Mercosur), an initiative that includes Brazil, Paraguay, and Uruguay, and which recently celebrated its 30th anniversary.
Read on to understand more about company incorporation in Argentina, including choosing the correct entity type and the critical steps in the process. Or go ahead and contact us now to discuss your business formation options.
Company incorporation in Argentina: which type to choose?
When undertaking company incorporation in Argentina, there are four main types of entities that foreign investors tend to choose from. These are the private limited liability company (LLC or PLLC); the public liability company (PLC); a partnership or a sole proprietorship. Each one carries its advantages and drawbacks, and the best choice will depend on your business's nature and intended structure. As you might expect, aligning with a company formation agent in Argentina is often advised.
Investors particularly favor an LLC because they can wholly own it and establish it with no minimum capital. You need at least two shareholders and can have up to 50. Each shareholder's liability is restricted to what they initially contributed to the company's shareholding.
On the other hand, a PLC is an entity where shares are publicly traded on a stock exchange. You must appoint at least two directors to establish such an entity. These directors can be any individual with the right to reside in Argentina, as long as there are no legal restrictions that prevent them from occupying said position.
A sole proprietorship, meanwhile, requires one investor and is straightforward to set up, however, liability remains unlimited. The investor will be responsible for all of the entity's debts and obligations. A partnership is similar, but multiple partners set it up, and they share unlimited liability among themselves.
How to incorporate a company in Argentina in 9 steps
Once you have chosen your entity type, follow these nine steps in order to complete company incorporation in Argentina:
Step 1: Appoint a legal representative
Appoint a legal representative via a power of attorney (POA). This means they can act on your behalf, including signing legal documents and overseeing the company formation process.
Step 2: Choose your company name
Choose and register your company name with Argentina's General Inspection of Justice (Inspección General de Justicia or IGJ). This process can be completed online once you have confirmed that there are no other companies trading under that name.
Step 3: Draft your company bylaws
Also known as a social contract, your company's bylaws are the fundamentals of your firm. They highlight your company's commercial intentions and structure.You can complete this process online once you have confirmed that no other companies are trading under that name.
Step 4: Deposit initial share capital in the National Bank
In Argentina, you must make a deposit of 25% of the initial capital to the Bank of the Argentine Nation. Once the company's bylaws have been successfully registered, you will be able to withdraw that money again.
Step 5: Make a public announcement of your company incorporation in Argentina
Next, you must announce the creation of your company through a national publication in the Official Gazette. This must include the date you signed the constitution, the registered office, and the Social Capital. This publication must be undertaken by a registered lawyer in Argentina.
Step 6: Pay the incorporation fee
With these steps complete, you must pay to submit documents to the Ministry of Justice and Human Rights site.
Step 7: Register the company books
Register the company's accounting books (balance, journal, and inventory). You must also submit any other books with minute notes on the meeting, board, deposit of shares, and record of actions.
Step 8: Obtain a Unique Tax Identification Code (CUIT)
To obtain this code, you need to present yourself in front of the Federal Public Revenue Administration (AFIP) with the required documentation, including the proof of registration of the company before the Public Registry of Commerce.
Step 9: Complete company incorporation in Argentina by opening a company bank account
The last step in the process of incorporating a company in Argentina is to open a company bank account. You don't need to be physically present in the country to do this. Your legal representative may recommend a specific account provider based on the nature and location of your business.
Originally published 26 May, 2021 | Updated on: 20 July, 2023
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
