Guarantee of representatives of foreign companies in Argentina: changes by the IGJ
The regime of the guarantee of representatives of foreign companies in Argentina has changed in the rules of the General Inspectorate of Justice (hereinafter, IGJ).
The IGJ has issued its General Resolution N° 5/2024, published on February 23, 2024 (hereinafter, the Resolution), in the National Official Gazette, effective as of the following day.
Until the Resolution came into force, representatives of foreign companies registered with the IGJ had to provide a certain guarantee in all cases. After the Resolution the regime of the guarantee of representatives of foreign companies in Argentina is the following:
1) Guarantee of representatives of foreign companies registered to only be partners or shareholders of domestic companies
The involvement of these representatives is narrow, just limiting themselves to file for incorporating the foreign companies in Argentina, and representing the foreign partners or shareholders at the domestic companies´ shareholders or partners meetings.
The obligation to provide a guarantee has been repealed.
2) Guarantee of representatives of foreign companies registered as a branch
These representatives bear the responsibility of conducting the branch´s operation in Argentina.
The obligation to set up a guarantee stands, although the amount of the guarantee for each representative has changed: it must equal 60% of the minimum share capital established for corporations incorporated in Argentina, as it was in effect on the date the documents instructing the guarantee were submitted, or 60% of the capital allocated to the branch, if applicable. In any case, the guarantee's amount cannot ever be less than AR$ 300,000 or more than AR$ 1,000,000.
The Resolution is in line with the new regulatory framework that the IGJ wants for companies in Argentina: less government interference in corporate business and more freedom for companies to self-regulate and do business.
For the new allowed multipurpose corporate object, please, see the following post on our Legal Blog: https://cspabogados.com.ar/en/multiple-corporate-purposes-in-argentina/.
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.
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