On January 16, 2020, the Central Bank of the Argentine Republic (Banco Central de la República Argentina, or BCRA after its Spanish acronym) enacted Communication “A” 6869, lessening the foreign exchange market restrictions for multinational companies doing business in Argentina.

In the case that non-resident shareholders execute new foreign direct investments in Argentina as of 17 January 2020, the relevant Argentine companies will be allowed to access to the foreign exchange market for the payment of dividends to non-resident shareholders, without the need of prior BCRA approval, subject to the following requirements:

a) The stock capital contributions must have been transferred to Argentina and sold for Argentine Pesos through the foreign exchange market as from 17 January 2020;

b) Dividends must correspond to audited and approved financial statements of the local company;

c) The total amount of payments abroad to execute on account of dividends (including the amount of the payment being made at the time of the access to the foreign exchange market) must not exceed 30% of the value of the new stock capital contributions of foreign direct investments;

d) The access to the foreign exchange market for the payment of dividends must happen in a term of no less than 30 calendar days as of the sale for Argentine Pesos, through the foreign exchange market, of the last capital contribution that computes to the extent of the 30% limit mentioned above;

e) The Argentine company has to show proof at least of the filing of the petition to increase its stock capital with the Public Registry, and to submit the documents proving the definite capitalization of the contributions within 365 calendar days as of the beginning of the procedure; and

f) The local company must have complied with the information regime on foreign assets and liabilities.

Mario E. Castro Sammartino

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