A Guide to Starting a Business in Argentina
With a recorded GDP of US$388.28 billion in 2020, Argentina is considered one of the leading economies in Latin America. Argentina is home to educated citizens, along with a growing middle class population, making it a great investment destination with growth potential for many businesses. Since the current complex legal system of the country may be a challenge for new entrepreneurs, the government is actively trying to reduce this barrier and encourage more entrepreneurs to launch their companies in Argentina.
If you’re planning to operate on a commercial scale in the country, it is important to understand the steps involved in starting a company in Argentina.
The process mentioned below comprises the most common steps of launching a business in Argentina. However, the process may vary, depending on the structure of your business.
That being said, here are a few steps to help you start a business in Argentina.
Define Your Company’s Legal Structure
You must have a clear idea about the type of business you want to launch in Argentina. Having a well-defined business plan can help you decide on the legal entity in Argentina that will be able to provide you with the appropriate governance structure.
There are several legal entities that entrepreneurs can choose in Argentina, each with specific characteristics. It is important to identify which entity is most appropriate for your business’ intended commercial activities and governance needs.
Here are some of the most commonly found legal entities in Argentina:
- Sole Trader
- Limited Liability Company
- Public Limited Company
- Simplified Joint Stock Company
It is vital to choose the type of legal entity you want to be, as it will impact how you conduct business in Argentina.
Get a Power of Attorney
It is mandatory to write up and sign a document for Power of Attorney. This document allows a legal expert, particularly a lawyer, to form the company on your behalf. If you or your company’s partners don’t reside in Argentina, then you will have to sign off the Power of Attorney to a lawyer residing in Argentina who will form your company.
The main objective of a power of attorney is to grant all the power and privilege a lawyer requires in Argentina, so that they may represent your business throughout the formation process of the company.
Select and Register the Name of Your Company
Make sure to register your company name under which you’re planning to run your business operations. The General Inspection of Justice (IGJ) handles this process by verifying the company name to make sure that it isn’t already taken. If you’ve decided on a name for your company, you can request the IGJ to register it by filling out a form on their website and fulfilling the required payments.
Form and Certify Your Social Contract
The social contract or bylaws of your company as a set of rules that act the constitution to govern the operations of your business and frame your commercial intentions. Your company’s bylaws need to be signed by all the shareholders of the company and these signatures must be verified by a Public Notary.
Deposit Your Capital in the Argentinian National Bank
Every business in Argentina has to deposit at least 25 percent of the subscribed capital to the National Bank of the country. Whoever deposits the amount must get payment proof for the transaction. This amount can also be presented (in case) to a Notary who will certify it. This amount can be withdrawn from the bank once the company’s social contract is registered.
Make an Official Public Announcement
Once your business has been registered, you will have to make an official public announcement in the national publication, the Official Gazette. An authorized individual, such as a registered lawyer, can publish in the Gazette. It’s important to note that this publication charges per line that is published.
Pay the Incorporation Fee
There is a fee to be paid for the processing costs for the documents that are submitted for registering your business. TheMinistry of Justice and Human Rights carries out this process. So, once you’ve made the payment, you will have to present the paid slip to the Public Registry of Commerce.
Submit Your Company Books
When launching your business in Argentina, you will have to register all your accounting books and journals along with other books that encompass deposits of shares, meeting minutes, records of actions, etc. These books are to be handed over to the Public Registry of Commerce where they will be formalized.
Get Your CUIT
You can obtain the Unique Tax Identification Code (CUIT) for your business by visiting the Federal Public Revenue Administration (AFIP) unit. They will ask you for proof of company registration before any other documents. Once you obtain the CUIT for your business, you will have to register for social security and taxes.
An important point to note is that the legal representatives and partners of the company should have previously received their own Unique Tax Identification Code, or whatever code is applicable for foreigners.
Set Up a Bank Account
The last step of starting your business in Argentina is setting up a corporate bank account for all commercial transactions. The required documentation to open your corporate account may slightly vary from bank to bank. However, you will generally provide a bank with the identification of all the shareholders and details and documents of your new business.
Fortunately, you won’t have to travel to Argentina to set up your account. You can simply partner up with a local accounting expert in the country and have them help you out.
The Bottom Line
Argentina has a lot of potential when it comes to launching a new business. As an attempt to reduce some of its economic issues, the Argentinian government is encouraging investors and entrepreneurs to start their ventures in the country. If you’re planning to launch your business in Argentina, this guide will hopefully help make sure that you get your new business up and running in a smooth manner.