This banking account allows certain qualifying entities to open bank accounts for investment purposes with simpler requirements. It would also allow foreign residents to access the foreign exchange market without having to appoint an Argentine resident attorney in fact.

The Argentine Central Bank introduced a new bank account, the Special Bank Account for Investment (Cuenta Especial de Inversión, "Investment Account"),[i] which allows certain qualifying entities to open bank account for investment purposes with simpler requirements. This Investment Account would also allow the foreign resident to access the foreign exchange market without having to appoint an attorney in fact who is an Argentine resident.

1. Entities qualifying to open the Investment Account

The opening of an Investment Account is available to foreign and local investors. Foreign investors must have a financial activity, authorized, regulated and supervised in an adequate manner in anti-money-laundering matters in its jurisdiction of incorporation in accordance with the recommendations of the Financial Task Action Force (FATF/GAFI).  The jurisdiction of incorporation cannot be one which is deemed "non-cooperative" or "high risk" by FATF/GAFI.

The foreign investor must also be subject, in its jurisdiction of origin, to the supervision, authorization and/or control of the supervisory agencies both in anti-money laundering matters and in financial matters. These supervisory agencies must have a cooperation agreement or memorandum of understanding with either the Central Bank or the Argentine Securities Commission (Comisión Nacional de Valores or "CNV").

The financial institution must apply the know-your-customer (KYC) regulations issued by the Financial Information Unit (Unidad de Información Financiera or "UIF").[ii]

2. Authorized payments and collections

The Investment Account can be used only to receive and make certain payments and collections expressly stated in the regulations. The Investment Account cannot have a negative balance.

All debits in the Investment Account must be related to following concepts:

  1. purchase of private or governmental  securities;
  2. purchase of Central Bank's instruments of monetary regulation;
  3. transfers between same-owner accounts;
  4. repatriation of funds; and
  5. account operating expenses (e.g.: commission and other costs).

All the transfers from the Investment Account must be made electronically by one of the individuals authorized to operate with the bank. All credits in the Investment Account must be made through electronic transfers that allow their traceability.

The financial institution in which the non-Argentine resident has the Investment Account may act in representation of such client when executing the foreign exchange purchase and sale document if the funds are transferred from or to the Investment Account. This authorization may simplify access by non-Argentine residents to the foreign exchange market since otherwise financial institutions generally, require that the foreign resident appoints an attorney in fact who is domiciled in Argentina to execute this documentation.

3. Process to Open the Account

The regulations of the Central Bank provide that certain corporate documentation must be filed with the financial institution but there are certain facilities that would expedite the process. The documents and information can be provided directly by the holder of the account or through the financial entity, whether local or foreign, that is transferring the funds to the Investment Account. Also, the documentation can be filed by electronic means but the hard copy must be delivered within 60 calendar days following the opening of the Investment Account.

Regarding the necessary tax registration to open the Investment Account, the client may open an account with a Foreign Investor Code (Código de Inversor Extranjero or "CIE"), which has been recently created and provides for a simplified registration process for foreign financial investors.

Footnotes

[i] Argentine Central Bank Communication "A" 6165.

[ii] The UIF issued Regulation No. 4/2017 which is a specific regulation to be applied to these types of accounts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.