General rules to register a foreign company in Argentina

To do business regularly in Argentina, foreign companies must first register with the Public Registry, whether to set up a branch, hold equity in an existing local company, or incorporate a new company.

For such purposes, Section 118 of the General Companies Law No. 19,550 (hereinafter, the GCL) requires foreign companies to:

• Prove their existence under the laws of their country of origin;
• Establish a domicile in Argentina, complying with the publication and registration required for companies incorporated in our country; and
• Prove their decision to establish themselves in Argentina and appoint an individual to represent them locally.

In the case of a branch, they must also:

• Determine the amount of capital to be allocated to it when applicable by special laws.

If the foreign company registers to hold equity in an already existing local company or to incorporate a new company under Section 123 of the GCL, it must also:

• Register its articles of incorporation and bylaws, their amendments, and other relevant documentation.

The Public Registries to register a foreign company in Argentina are organized by the provinces and by the Autonomous City of Buenos Aires, each with its requirements and regulations.

As the jurisdiction most chosen by global companies, we will describe how to register a foreign company in Argentina to incorporate a new company or hold equity as a partner in an existing local company under the requirements of the General Inspectorate of Justice (hereinafter, the GIJ), the agency in charge of the Public Registry in the Autonomous City of Buenos Aires.

Documents to be obtained or granted abroad to register a foreign company with the GIJ

General Resolution No. 7/2015 of the GIJ establishes that to apply for registration to incorporate a new local company or hold equity in a company already existing in Argentina, a foreign company must submit:

1) A certificate evidencing the registration and good standing in its jurisdiction of origin, dated not more than six months from the date of filing for registration (“certificate of good standing”);

2) Articles of incorporation and bylaws, and their amendments;

3) Resolution of the corporate body that decided the registration in Argentina, containing:

a) The decision to incorporate a new local company or to hold equity in an existing one and to register for such purposes its articles of incorporations and bylaws under the terms of Section 123 of the LGS;

b) The date of closing of its fiscal year;

c) The statement that the foreign company is not subject to liquidation or any other legal proceeding imposing restrictions on its assets or activities;

d) The designation of the registered office in the Autonomous City of Buenos Aires or the authorization to the legal representative to set it;

e) The appointment of the individual who will be the legal representative of the foreign company. Regarding this point:

           (i) The term of the tenure may be limited;

           (ii) The appointment of the legal representative must include the granting of a special power of attorney to participate in the incorporation of the local company and / or acquire shares in an already existing one, exercise the rights and comply with the obligations of the foreign company as a partner and answer to judicial or extrajudicial summons made at the local registered office of the company or, if applicable, at the address of the legal representative, in all matters related to that capacity and the obligations and liabilities derived therefrom. If any restriction to the legal representative’s capacities had been established, they should have been expressly indicated;

           (iii) It is possible to appoint more than one legal representative, to act jointly or indistinctly, and to provide for alternate legal representatives;

           (iv) A specific postal address in the jurisdiction of origin and a specific electronic address (e-mail) of the foreign company must be set in the appointment, which is binding for the foreign company for any communication related to the performance and termination of the tenure of the legal representative; if the special postal address is omitted, the domicile or headquarters arising from the articles of incorporation or bylaws of the company or their amendments, whichever is the last one fixed, will be considered as such.

f) An investment plan in Argentina: the foreign company must submit an investment plan, stating: the list of the company or companies in which it intends to hold interest or which it intends to incorporate in Argentina; the domicile and name of the local company or companies in case they are already incorporated; the effective activity carried out by the foreign company abroad; the effective activity carried out by the existing local company or to be carried out by the new domestic comoany to be incorporated; the identification of the remaining partners and the number of shares the foreign company intends to acquire, either in an already existing local company or in a company to be incorporated. In the absence of a provision in the corporate resolution, the investment plan may be signed by the legal representative appointed for Argentina.

4) One or more documents from abroad evidencing:

a) That the company is not prohibited or restricted from carrying out all its activities, or the principal or principal of them, in its place of incorporation;

b) That its economically significant business activity and that the center of management of the company is located outside Argentina;

c) The partners at the time of the decision to apply for registration, indicating for each partner not less than its name and surname or corporate denomination, domicile or registered office, identity card / passport number or registration or incorporation data, and the number of shares and votes and their percentage in the capital stock. The filing of this documentation is not necessary if the individualization of the partners with the indicated data results from the articles of incorporation or bylaws of the foreign company and their amendments and a statement on its subsistence is also produced.

5) One or more foreign documents showing the identity of the final beneficiaries[1].

Evidence of economically significant business activity abroad

To prove that the foreign company carries out an economically significant business activity abroad and that its center of management is also located there, the following may be done:

1. To sufficiently individualize if it has one or more agencies, branches, or representations in force in foreign jurisdictions and/or;
2. To sufficiently identify non-current fixed assets abroad, indicating their value resulting from the last balance sheet approved by the company not more than one year before and/or;
3. Regarding investment operations in stock exchanges or stock markets: to submit a certificate issued by a professional in economic sciences of the jurisdiction, on the operations carried out during the year immediately before the beginning of the procedure, mentioning the type of securities and operations, amounts traded and global amounts according to their quotation, stock exchanges or markets where they were carried out and quotation value of the securities in the portfolio as of the date of issuance of the certificate and/or;
4. Concerning the exploitation of third-party assets: to submit a certificate from a professional in economic sciences of the jurisdiction of origin indicating the assets exploited and gross income resulting from the last accounting statement approved by the foreign company not older than one year and/or;
5. Regarding the participation in other companies not subject to the public offering: to inform the name, country of origin, percentage of ownership, the activity carried out, and the value resulting from the participation according to the last accounting statement approved by the foreign entity no more than one year before and/or;
6. In the event of habitually carrying out investment operations in stock exchanges or stock markets provided for in its corporate purpose: to submit certification from a professional in economic sciences of the jurisdiction of origin, indicating the type of securities and operations, amounts traded and global amounts according to the quotation of the securities in the portfolio as of the date of issuance of the certificate and/or;
7. To submit the last accounting statement approved by the foreign company no more than one year before the date of issuance of the certificate, evidencing any of the above requirements.

To evidence said economically significant business activity abroad, global certifications may also be admitted, if they reflect credibly and reasonably the conditions of the foreign company, when they refer to audited and approved accounting statements and their issuance is justified by the amount and variety of the company’s assets and operations.

Investment Vehicle Companies

If the foreign company applying for registration is only an investment vehicle company, it will be exempted from proving:

1. That it does not have in its place of incorporation prohibitions or restrictions to develop of all its activities or the main one or main ones of them;
2. That its economically significant business activity and that the center of management of the same is located outside Argentina.

However, they must:

1. Prove that the requirements waived are met by the direct or indirect controlling company of the foreign company filing for registration;
2. Submit an express statement of acknowledgement of the condition of “vehicle” of the foreign company applying for registration, which must arise from documents issued by the management or governing bodies of the petitioner and its controlling company, together with the necessary documents for its registration;
3. Submit the organization chart of the companies indicating the percentages of participation that attribute direct and indirect sole or plural control, signed as a sworn statement by the appointed representative;
4. Individualize the partners owning the participations referred to in the preceding paragraph;
5. Submit an original certificate evidencing the registration and good standing of the controlling company, dated not more than six months from the filing date, issued by the registry authority of the jurisdiction of origin;

In the case of joint control, the above requirements must be complied in relation to the companies exercising such control. For these purposes, joint control shall be understood as that which exists when all the partners, or those holding the majority of votes, have resolved to share the power to form the corporate will of the entity exercising such control, by syndication agreements or covenants.

Legalization of foreign documents

All documents coming from abroad must be originals issued by the relevant government authorities or copies certified by a notary public of those granted by foreign companies. In addition, they must be legalized, either through the Hague Apostille or the relevant procedure for those countries that are not parties to the Hague Convention.

Documents to register a foreign company in Argentina must be carefully and neatly prepared and organized so that its review be easy for the GIJ and thus avoid objections and delays in the completion of the process.

Mario E. Castro Sammartino

[1] Beneficial owners are those individuals who own at least ten percent of the share capital or voting rights of a company, and/or those individuals who by other means exercise ultimate control of the same.

Final control shall be understood as that exercised, directly or indirectly, by one or more individuals through a chain of ownership and/or through any other means of control and/or when, due to factual or legal circumstances, the same individual/s have the power to shape by themselves the corporate will for the decision making by the governing body of the company and/or for the appointment and/or removal of members of the management body thereof.

When it is not possible to identify the individual (s) who is/are the beneficial owner according to the above definition, the beneficial owner shall be deemed to be the individual who is in charge of the management or representation of the company.

If the beneficial owner is an indirect controller, the following must be submitted:

• supporting documentation, corporate article of incorporation and bylaws, registers of shares, contracts, transfer of shares and/or any other document evidencing the chain of ownership and/or control; or
• a detail of the chain of ownership.

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