Registration of foreign companies in Argentina: new facilities by the IGJ

by 20 Apr 2024Companies, Corporate, Doing business in Argentina

By General Resolution No. 10/2024, published in the Official Gazette on March 27, 2024 and effective as of the day following its publication, the General Inspectorate of Justice in charge of the Public Registry in the Autonomous City of Buenos Aires (hereinafter, the IGJ) repealed General Resolution No. 8/2021 and its Annex A, and amended articles of the IGJ Rules (General Resolution No. 7/2015, hereinafter, the Rules), facilitating several aspects of the registration of foreign companies in Argentina.

Among the highlights of the amendments, we will mention:

a) Proof of economically significant activity and management center abroad in case of a business group

One of the requirements for the registration of foreign companies in Argentina before the IGJ is that they must prove that they carry out economically significant business activities abroad and that their center of management is also located outside Argentina. All of which can be shown in different ways.

To this end, the new Article 212 of the Rules helps the above-mentioned proof when the foreign company applying for registration is part of an international group, under control through corporate shareholdings, and meeting certain criteria of notoriety and public knowledge.

In these cases, it will be sufficient to identify the person or persons under whose unified management the foreign company wishing to register in Argentina is run, submitting then an accounting certification of the net worth resulting from the last consolidated financial statements of the group.

b) Investment Vehicles

Article 215 of the Rules now defines investment vehicles as those foreign companies that are an investment vehicle of another foreign company that directly or indirectly exercises control by holding sufficient voting rights to form the corporate will.

Likewise, it currently allows the company whose registration is requested as a vehicle to have – as direct or indirect controlling companies – foreign companies already registered as branches or to participate as a partner in local companies.

The status of a foreign company as an investment vehicle can now be declared after its registration if it is supervening.

It is also possible to register multiple investment vehicle companies per economic group.

c) Companies from jurisdictions non-cooperative for the purposes of fiscal transparency or the fight against Money Laundering and Terrorist Financing. Offshore companies

The new Article 217 of the Rules allows their registration, but the application will be evaluated with restrictive criteria, and the IGJ may require additional documentation to prove that the company carries out economically significant business activity in the place of its incorporation, or in third countries, as well as documentation related to its partners at the time of the decision to apply for registration.

Regarding the so-called “offshore” companies[1], Article 218 of the Rules in its current wording, establishes that the IGJ will not register “offshore” companies, or companies coming from jurisdictions of that nature, for the purpose of carrying out habitual activity, establishing seats, branch or permanent representation.

All of the above does not apply to foreign companies applying for registration in Argentina as investment vehicles (Section 219 of the Rules).

d) Investment plan

The requirement of submitting an investment plan by the foreign company requesting its registration to participate as a partner of a local company has been repealed (new article 245 of the Rules).

e) Abbreviated annual information regime

Foreign companies registered in Argentina must comply with an annual informative regime before the IGJ, to prove that the requirements mentioned in a) above are still met.

The Regulations provide several ways to prove said compliance, including an abbreviated annual informative regime for those companies that comply with certain notoriety requirements (allowing the proof to be provided by means of statements of their legal representative).

This abbreviated informative regime can be used even by those companies that do not comply with the notoriety requirements, now for a maximum of five consecutive fiscal years (Rules, article 255).

It is no longer necessary to prove compliance with the Annual Informative Regime to request the registration of acts by local companies in which foreign companies participate.

f) Participation of non-registered foreign companies in corporate acts of local companies

When a foreign company not registered in Argentina participates as a partner of a domestic company in a corporate act of the latter (for example, it votes in a meeting to increase the capital stock), such corporate acts may not be registered with the IGJ, unless the votes cast by the companies incorporated abroad have not been decisive – alone or in concurrence with those of other participants in the act – for the adoption of the corporate resolution in question (Rules, Section 256).

In the meetings of the local company, the foreign company must be represented by its registered legal representative. Proxies, whose power of attorney has been granted directly by the foreign company or by the legal representative registered in Argentina, may now also take part in corporate meetings.

g) Foreign companies registered in provincial jurisdictions.

It is no longer necessary for such foreign companies to be registered with the IGJ.

h) Guarantee of legal representatives

On this subject, please see the following article in our Legal Blog: https://cspabogados.com.ar/garantia-de-representantes-de-sociedades-extranjeras/ .

Mario E. Castro Sammartino

[1] The Rules do not define “offshore” companies, but it is generally understood that offshore companies are those that are registered in one country for the purpose of carrying out their activities in another country.

 

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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