Company incorporation in Argentina is becoming increasingly popular among foreign investors. The country boasts a large and diversified economy with a growing services sector and a highly educated population with a well-established middle class.
Individuals looking for shorter-term engagement or limited-scale operations in Argentina should consider hiring staff through an employer of record. This allows you to hire local personnel without going through the processes of company formation and liquidation.
While Argentina has experienced some economic difficulties in recent years, the country has undergone significant growth since the famous debt crisis in the early 2000s, with the gross domestic product (GDP) (all figures USD) increasing more than four-fold between 2002 and 2021.
Like many countries, the economy took a beating during the pandemic years. But the recovery has been very strong, which is an optimistic sign for individuals wanting to register a business in Argentina. In 2019, Argentina had a GDP of $447 billion after a high of over $600 billion in 2017.
In 2017, Argentina was the third-largest economy in Latin America. GDP fell considerably during COVID, down to $385 billion in 2020. But it has since bounced back, reaching the 2019 level in 2021, which is an optimistic sign for the future!
Argentina’s gross national income (GNI) has more than tripled since the millennium. In 2021, Argentina registered a GNI of $10,630 — a figure that makes it an upper middle-income country by World Bank standards. With foreign direct investment at $15.41 billion in 2022, the second-highest since 1999, and consistently high at over $6 billion in 2021, Argentina stands out as a compelling destination for business incorporation. This robust investment climate underscores the country’s appeal for businesses looking to thrive in a dynamic and growing market.
Argentina also has particularly high English proficiency levels. For first-time investors looking to incorporate a company in Argentina, this is a big help.
Argentina has a highly-developed professional services sector, including finance and consulting, which are major contributors to the economy. Additionally, the agricultural sector is a significant employer and contributor to the country’s exports, with soy and cereals being the main crops. Argentina is also a major producer and international distributor of beef and other meats.
This South American country is part of many free trade agreements. Perhaps most notably, the Southern Common Market (Mercosur), an initiative that includes Brazil, Paraguay, and Uruguay, and which recently celebrated its 30th anniversary.
With the 2023 election results, significant economic changes are anticipated. Among them, the new chancellor has announced that Argentina will join the OECD (Organization for Economic Cooperation and Development), along with influential countries like the US, Germany, the UK, and Japan. This strategic decision signifies Argentina’s commitment to participating as an integral member of the OECD, fostering collaboration and contributing to economic development initiatives alongside other leading nations.
Entering the OECD benefits Argentina by aligning its economic practices with international standards, fostering investor confidence, and providing access to valuable data. Membership facilitates policy coordination, opens up trade opportunities, and enhances the country’s global influence.
Read on to learn more about company incorporation in Argentina, including how to choose the correct entity type and what the critical steps in the process are. Or go ahead and contact us now to discuss your business formation options.
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Company Incorporation in Argentina: Which Entity to Choose?
When incorporating a company in Argentina, there are three main types of entities that foreign investors tend to choose from: A limited liability company (Sociedad de Responsabilidad Limitada S.R.L. LLC); Corporation (Sociedad Anónima, S.A); or a Simplified Joint Stock Company (Sociedad por Acciones Simplificada, S.A.S). Each one carries its own advantages and drawbacks, and the best choice will depend on the needs of your business and its intended structure. Getting in contact with a company formation agent in Argentina is advised.
Sociedad de Responsabilidad Limitada S.R.L. Limited Liability Company
Investors particularly choose a LLC (known as Sociedad de Responsabilidad Limitada S.R.L.) since they can own it entirely and establish it with a minimum suggested capital of USD$ 2,000. At the time of establishing the LLC, only 25% of the capital can be contributed. The remaining capital must be substantiated over the following two years. To establish an LLC in Argentina you need as minimum (2) two shareholders up to a maximum of (50) fifty. Each shareholder’s liability is restricted to what they initially contributed to the company’s shareholding. The capital contributed by the quotaholders is divided into quotas or participations. Each partner can acquire the quantity of quotas they desire, and their liability will be limited solely to that acquisition.
Corporation (Sociedad Anónima- S.A.)
An S.A. (Sociedad Anónima) is formed through the creation of bylaws, which are subsequently registered with the Inspectorate General of Justice (Inspección General de Justicia or IGJ). This type of entity allows the registration of diverse business activities and is generally associated with large businesses.
Shareholders are not personally liable for the debts and obligations of the company, but only up to the extent of their contributions. The social capital is divided into shares and at least 25% of the value of each share must be subscribed to and paid
The shares of a Sociedad Anónima are freely transferable, facilitating the entry or exit of new shareholders, and also can issue shares and be listed on the stock market, providing the opportunity to obtain financing through the sale of shares.
Simplified Joint Stock Companies- Sociedad de Acciones Simplificada -SAS
A S.A.S. requires one investor and is straightforward to set up. liability is also restricted to the initial contribution to the company’s shareholding. The S.A.S. is particularly suited for small-sized companies and entrepreneurs. Due to its streamlined processes, it may not be the ideal choice for medium to large-scale projects. For those, other legal structures like S.A. or S.R.L. might be more suitable, offering greater flexibility and complexity to handle larger business endeavors.
This type of company is the simplest and fastest way for a business to establish a company and has emerged in the context of the Entrepreneurship Law. It is geared towards small businesses, given its straightforward constitution requirements and lower costs compared to S.A. and S.R.L.
Regarding organization, partners will only limit their liability to the capital they contribute. An S.A.S. can be established as a sole proprietorship (with a sole shareholder) or with multiple shareholders which can be legal entities and individuals.
What are the minimum requirements to incorporate an SRL in Argentina?
- Three possible names for the Legal Entity, the chosen name must not be misleading or similar to existing company names.
- Shareholders’ identification documents with minimum of (2) shareholders and up to a maximum of (50)
- Business Activity,corporate purpose, and primary operations.
- Initial Contribution of Social Capital , the suggested minimum capital is USD$ 2,000.
- The registered address must be located in Argentina.
How to Incorporate a Company in Argentina in 8 Steps
Follow these (8) eight steps in order to complete company incorporation in Argentina:
Step 1: Draft the POA’s to obtain shareholders’ Tax ID
Shareholders will obtain a personal Tax ID before AFIP “Administración Federal de Ingresos Públicos,” which is the tax authority in Argentina
Step 2: Draft POA’s to incorporate the company
Shareholders will grant a second POA to register the new company before local authorities, they do not need to travel to Argentina, the POA’s apostille will suffice.
Step 3: Draft your Company Bylaws
Also known as a social contract, your company’s bylaws contain the agreements reached by the shareholders to incorporate the company. The articles of incorporation must be drafted by a public notary.
Step 4: Registration in the Public Commercial Registry
Once the articles of incorporation have been drafted, the company must be registered in the Public Commercial Registry.
Step 5: Obtaining the registration certificate
Once the company is registered in the Public Commercial Registry, the company will receive a registration certificate. The registration certificate is the document that proves the legal existence of the company.
Step 6: Registration with the Tax Authority (AFIP)
The company must register with the AFIP to comply with its tax obligations, register the fiscal address and obtain the company Tax ID Certificate
Step 7: Opening a bank account
The new company must open a bank account in its name. The bank account will be used to carry.
Step 8: Register the Company Books
Register the company’s accounting books (balance, journal, and inventory). You must also submit any other books with minute notes on meetings, information about the board, deposit of shares, and record of actions.
Common FAQs When Forming a Company in Argentina
Based on our extensive experience these are the common questions and doubts of our clients on company formation in Argentina:
Argentina is good for business due to its abundant natural resources, skilled workforce, and strategic location.
It takes between 10 to 14 weeks to form a company in Argentina after all the required information and documentation has been provided.
Yes, foreign individuals and entities can own a business in Argentina.
The most common corporate structure in Argentina is the “Sociedad Anónima” (SA), which is similar to a joint-stock company.
It requires a minimum of two shareholders to form a company in Argentina.
Biz Latin Hub Can Help You With Company Incorporation in Argentina
At Biz Latin Hub, our team of multilingual company formation specialists has all of the tools necessary to help you incorporate a company in Argentina. With our full suite of back office solutions, including legal, accounting, and recruitment services, we can be your single point of contact to help you enter and operate in Argentina, or any of the other 17 countries around Latin America and the Caribbean where we operate.
Reach out to us now for personalized assistance or a free quote.
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The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
