Foreign investments in Argentina are constitutionally protected since the Article Number 20 of the National Constitution (Constitución Nacional, or CN by its Spanish acronym) grants foreigners the same treatment than Argentine citizens. Further, under Article Number 75, Sub-article Number 22, of the CN, the international treaties in force protecting foreign investments in Argentina have a higher hierarchy than laws.
From the infra-constitutional and statutory legal standpoint, foreign investments in Argentina are specifically governed by Foreign Investment Law Number 21,382, as amended (Ley de Inversiones Extranjeras, or LIE by its Spanish Acronym), and the Decree Number 1,853/93. Under this basic legal framework:
- Foreign individuals and companies may use any legal vehicle allowed for under Argentine law to invest and do business in Argentina. No national partner is required1;
- No prior approval is required, save when antitrust law applies to a certain transaction;
- No restrictions are in force, except for certain regulated activities2 and specific transactions3;
- Foreign companies may access to the domestic credit in the same conditions than those controlled by national citizens;
- Payment of dividends abroad and repatriation of the investment may be carried out without any limits.
It is also worth noting that the foreign exchange market is free. No restriction on the inflows or outflows of foreign currency is in place. Former regulations limiting payments abroad, or obliging to settle in the foreign exchange market the proceeds from export4 of products or services have been lifted.
As far as the business organization is concerned, a new legal vehicle, the simplified corporation, has been created, providing a fast-track incorporation procedure, and many advantages for foreign individuals and companies wishing to do business in Argentina5.
To sum up, the new administration that took office in December 2,015 is striving for providing a business-friendly legal environment, removing obstacles and giving transparency and certainties to attract the investment the economy needs.
1. To set up a subsidiary in Argentina, or acquire a participation in an existing locally incorporated company, foreign companies must first register themselves before the Public Registry and file certain documents evidencing the decision to operate in Argentina, and its economic significance and decision making location outside of the country.
2. E.g., audiovisual media services.
3. E.g., purchasing land in rural or border security areas.
4. Decree Number 893/2017 repealed the exporter´s obligation to repatriate and settle for pesos in the domestic exchange market foreign currency proceeds derived from the export of goods.
5. The possibility of being set up with a single shareholder, highly customizable by-laws, only a manager has to reside in Argentina, crowdfunding, etc. To know more about simplified corporations, please, visit our Legal Blog: http://cspabogados.com.ar/en/best-legal-vehicle-to-do-business-in-argentina/.
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.