Bountiful options available to establish a business in Argentina

When setting up a business in Argentina, foreign investors have three options: establishing a foreign branch office, acquiring ownership interests in an existing company or creating a new company. The main characteristics, requirements and implications of the different legal structures available to companies in Argentina are presented below.

Branch offices

A branch or representative office is created when a foreign company establishes a branch in Argentina, yet it does not imply the creation of a new legal entity. While a branch must be registered with the public registry of commerce, the laws governing its existence and validity are primarily the laws of the company’s home country.

A branch office may undertake all activities pursued by a company’s head office (HO) on behalf of the HO through the branch office staff member appointed as the company’s representative. The assets of the entire foreign business – that is, the total value of the HO’s capital, not only the capital the HO assigns to its Argentine branch –is subject to liability. The branch office’s accounts must be kept separately from the HO’s operations, and its financial statements must be filed periodically with the public registry of commerce.

The branch must be managed by a legal representative vested with broad administrative and judicial authority – which may be limited in certain circumstances – to ensure that all of the branch’s affairs and business transactions are conducted efficiently. Branch offices are subject to supervision by the public registry of commerce and must comply with the same requirements as corporations.