Things to Consider when Starting a Business in Argentina
Argentina is the 8th largest country in the world by land area and the largest among Spanish-speaking countries. The economy of Argentina is Latin America’s third largest and has been categorized as upper middle-income. In addition, Argentina provides its residents with a high quality of life and GDP per capita. In fact, Argentina ranks second, just behind Chile, in the Human Development Index among other countries in the Latin American region. The Human Development Index measures a country’s life expectancy, education and income and how these factors affect human development of its residents. The country benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector and a diversified industrial base. Despite these positive attributes, Argentina is infamous for high levels of corruption, huge tariffs, exorbitant taxes and a lengthy and complex bureaucratic system. Argentina ranks 100 out of 178 countries in the Transparency International’s Corruption Perceptions for 2011.
Economy & Foreign Relations
Argentina has strong foreign relations. It is a founding member of the United Nations, Mercosur, the Union of South American Nations, the Organization of Ibero-American States, the World Bank Group and the World Trade Organization. Furthermore, it is one of the G15 and G20 major economies.
*** Mercosur: An economic and political agreement among Brazil, Argentina, Paraguay, Uruguay, and Venezuela which was founded in 1991
***Union of South American Nations (UNASUL): It is an intergovernmental union integrating two existing customs unions, Mercosur and the Andean Community of Nations (CAN), as part of a continuing process to integrate countries in the South American region.
***Organization of Ibero-American States: It is an intergovernmental organization, comprising the Portuguese and Spanish speaking nations in America, Europe and Africa.
Argentina’s main industry is agriculture. Below are its primary production.
Argentina’s main exports are mineral fuels, oils, residues and waste from food industries, animal and vegetable oils and cereals. It imports machines, vehicles, electronic and electrical equipment and organic chemicals.
6 types of businesses that can be formed in Argentina
1) Sociedad Annima (SA)
Private companies limited by shares
2) Sociedad de Responsabilidad Limitada (SRL)
Private companies limited by guarantee
3) Sociedad Cooperativa
Free associations of members with a common social, economic and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise
4) Sociedad en Comandita Simple (SCS)
Partnerships limited by guarantee
5) Sociedad en Comandita por Acciones (SCA)
Partnerships limited by shares
6) Sociedad en Nombre Colectivo (SNC)
All the members share risks and capitals on unlimited basis
1) Submit a request to reserve a corporate name using the reservation name form which must be submitted to the office of Corporations called the “Inspección General de Justicia”.
2) Although a company’s bylaws need not be notarized, the signatures of the founding partners have to be certified by a notary public.
3) The company must deposit at least 25% of the subscribed capital at the central office of the Argentine National Bank (Banco de la Nación Argentina). Proof of payment must then be obtained.
4) The new company’s notice must be published in the official paper called “Boletín Oficial”. This publication fee ranges as it depends on the length of the notice and the kind of publication chosen.
5) An incorporation fee must be paid at Argentine National Bank (Banco de la Nación Argentina) and submitted in the incorporation proceeding with the Public Registry of Commerce.
6) Companies located in the City of Buenos Aires must register their by-laws and other documents related to their incorporation with the Public Registro of Commerce.
7) Special books need to be bought and this purchase should be recorded at the Office of Corporations.
8) Get a form from the Public Notaries College and have a notary public submit the company books
9) Corporate manager needs to obtain a Fiscal Code (Clave Fiscal). “Fiscal Codes” are required for individuals and companies to file affidavits and information with the National Tax Office (AFIP) through the online tax system.
10) Obtain a tax identification number (CUIT) from the National Tax Office (Administración Federal de Ingresos Públicos, AFIP) and register for social security
11) Register turnover tax at local level at the Dirección General de Rentas (DGR) in the City of Buenos Aires
12) Register with the Sistema Unico de Seguridad Social (SUSS)
13) Contract an insurance for employees with a risk labor company (ART, Aseguradora de Riesgos del Trabajo)
14) Rubricate books of wages in the Ministerio de Trabajo (Ministry of Labor)
As stated in the overview, Argentina is infamous for high levels of corruption and lengthy/complex bureaucratic system. Therefore, it is a good idea to gain trustworthy local contacts and seek legal advice to ensure that you successfully establish your company/business in the correct and most efficient manner.
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Are you thinking about changing your normal 9:00 to 5:00 office work into your own business? In the event that you haven’t given this idea reasonable consideration, you’d better take a few moments, think and evaluate what is needed to set up your desired business. Remember, more than a few have decided to join the fleeting trend of becoming business owners just to give up when things become a little challenging ( and believe me it will! ).