The legal framework for foreign investments in Argentina is provided by Articles No. 14 and 20 of the National Constitution (the NC), the Foreign Investment Law No. 21,382 as amended (the FIL), and the international treaties to which Argentina is a party which, among other matters, regulate the promotion and protection of investments, avoid double taxation and establish reciprocity so that individuals may have access to social security benefits[1].

Pursuant to Articles No. 14 and 20 of the NC, foreigners enjoy the same rights as Argentine citizens. With specific regard to investments, the FIL ratifies the equal constitutional treatment (Article No. 1), defines certain concepts such as foreign capital investment[2] and foreign investor[3], and specifies some forms of foreign investment[4].

The FIL also expressly recognizes that foreign investors may use any of the legal forms of organization provided for by domestic law (Article No. 6) and that they may transfer abroad the net and realized profits from their businesses, and repatriate their investment (Article No. 5). It is important to note that the rights to remit dividends to parent companies and repatriate investments are currently restricted by foreign exchange regulations that limit the access to the foreign exchange market for the acquisition of foreign currency and its transfer abroad.

Notwithstanding the full equality of treatment enshrined in the above-mentioned regulations, foreign investments in rural land, border areas, broadcasting media, and domestic air transport services are subject to certain restrictions. No prior approval is required for foreigners to invest in Argentina, except when antitrust law applies to a certain transaction.

Complementing the rules of domestic law, Argentina has entered into several international treaties with effect on certain aspects of foreign investments and doing business in Argentina. Thus, our country has in force bilateral investment treaties with different countries, treaties to avoid double taxation, and reciprocity treaties on social security matters.

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Mario E. Castro Sammartino

[1] Under Article No. 75, Section No. 22, of the NC, international treaties have a higher hierarchy than laws.

[2] Foreign capital investment is considered to be:

“(a) Any capital contribution belonging to foreign investors applied to activities of an economic nature carried out in the country.

 (b) The acquisition of shares in the capital of an existing local company by foreign investors” (LIE, Article No. 2, 1).

[3] A foreign investor is: “Any individual or legal entity domiciled outside the national territory, holder of an investment of foreign capital” (LIE, article No. 2, 2). According to Decree No. 1,853/93, the concept of foreign investors includes individuals of Argentine nationality but residing outside the national territory (Article No. 3).

[4] “Foreign investment may be made in:

1. Freely convertible foreign currency.
2. Capital goods, spare parts, and accessories thereof.
3. Profits or capital in local currency belonging to foreign investors, provided that they are legally able to be transferred abroad.
4. Capitalization of foreign credits in foreign currency of free convertibility.
5. Intangible assets, in accordance with specific legislation.
6. Other forms of contribution contemplated in special or promotional regimes”(Article No. 3).

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