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Commercial Guide to Doing Business in Argentina: subsidiaries in Argentina

by | Jun 2, 2020

Further to branches[1], foreign companies usually do business in Argentina through subsidiaries. Following, we will cover different types of subsidiaries in Argentina and their basic setting-up requirements.

Unlike branches, subsidiaries are independent companies and, therefore, the partner´s liability is limited to the capital contributions they have committed to making.

To incorporate subsidiaries in Argentina, foreign companies must register themselves beforehand with the Public Registry of the Autonomous City of Buenos Aires or any of the provinces.

Among the company types the Argentine law regulates, to set up a subsidiary, foreign companies usually choose the Corporation (Sociedad Anónima, or SA), the Limited Liability Company (Sociedad de Responsabilidad Limitada, or SRL), and the Simplified Corporation (Sociedad por Acciones Simplificada, or SAS).

Some basic features to consider when choosing a company type are:

 SASRLSAS
Number of partners1 or moreTwo or more, and up to 501 or more
Equity ownership

Non-resident individuals and/or foreign companies may own 100% of the company.

A single-shareholder SA may not be incorporated by another single-shareholder SA.

Non-resident individuals and/or foreign companies may own 100% of the company.

Non-resident individuals and/or foreign companies may own 100% of the company.

A single-shareholder SAS may not be incorporated by another single-shareholder SAS.

Minimum capital contributions[2]AR$ 100,000No minimum requiredTwice the minimum salary
Corporate purposeThe corporate purpose must be precise and specificThe corporate purpose must be precise and specificThe corporate purpose may be wide and multiple[3].

In a future release of our Commercial Guide to Doing Business in Argentina, we will cover the requirements to register a foreign company to incorporate a subsidiary.

Mario E. Castro Sammartino

For additional information on these or any other issues related to doing business in Argentina, please, sign up for our Legal Blog or contact us at any time.

Our publications exclusively express the author´s opinion and do not purport to be legal counsel on any case. Should you need it, you must consult with your trusted lawyer.

[1] See our article on branches in Argentina on our Legal Blog: https://cspabogados.com.ar/en/branches-in-argentina/

[2] The General Inspectorate of Justice (Inspección General de Justicia, o IGJ), the federal agency in charge of the Public Registry within the jurisdiction of the Autonomous City of Buenos Aires, requires that the corporate purpose be reasonably related to the share capital, and may request capital contributions higher than the minimum (General Resolution N° 7/2015, as amended by General Resolution N° 5/2020).

[3] The IGJ does not allow the incorporation of companies with multiple corporate purposes (General Resolution N° 7/2015, as amended by General Resolution N° 5/2020).

[4] The IGJ mandatorily requires an auditing body when the SAS´s share capital is equal to or higher than AR$ 50,000,000, in which case the company must appoint at least one active and one alternate controller.

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