Limited liability companies, stock corporations, and partnerships are preferred legal entities by international and local businessmen interested in establishing their activities in Argentina. Also, companies from abroad can establish branches in the country. To better understand the rules and requirements regarding different types of companies in Argentina, we invite you to address our company formation agents in Argentina. The same team can guide you when drafting the documents for your firm.
Furthermore, if you have any queries regarding the regulations and structure of companies in Argentina, you can interact with our experts. They will provide you with comprehensive guidance regarding company formation in Argentina.
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Entities to incorporate in Argentina
Please find below information about different types of companies in Argentina:
- Limited liability company in Argentina (Sociedad Limitada)
A limited liability company in Argentina can be set up by at least two investors or companies, whether local or from abroad, and should contain the letters SRL (Sociedad con Responsabilidad Limitada or LLC in the English language) at the end of the name. The minimum share capital is set at 300 US Dollars. We mention that at least two directors must administer such a business entity. They can either be companies or natural persons.
- Stock corporations in Argentina
A corporation is an anonymous company in Argentina and at least two stockholders can register it no matter their nationality or whether they live in Argentina or not. Such a business entity is set up if a minimum share capital of 7,500 US Dollars is provided through a bank account in Argentina. A board of managers is also a mandatory condition when setting up a corporation in Argentina. Any entrepreneur interested in setting up an anonymous company in Argentina should solicit complete guidance from our company formation agents.
- Branches in Argentina
Companies from overseas can set up branches in Argentina if several requirements are met. For instance, during the registration process in Argentina, the foreign company’s representative needs to provide the authorities with complete information about the firm’s financial situation and proof that the branch will operate with separate records in Argentina. Furthermore, a branch in Argentina must have non-current assets of third-party resources.
If you want to start a company in Argentina, you would follow the same procedures as domestic companies. The parent company of a foreign corporation that intends to form a local branch in Argentina must be appropriately registered in this country. According to Argentine legislation, there must be at least two equity holders, with the minority equity holder holding at least a 5% interest. If a foreign firm starts a business in Argentina, it must legitimize the parent company’s documentation, register the incoming foreign money with the Argentine Central Bank, and obtain a trading license, in addition to the steps required of a domestic corporation. You can get in touch with our company incorporation experts if you want to open a branch in Argentina. Our team members will provide you with thorough guidance in this regard.
Furthermore, if you have any queries regarding the types of companies in Argentina, you can interact with our company incorporation experts. They will provide you with comprehensive guidance about company types and company formation in Argentina.
Foreign ownership in Argentina
Except for the air transportation and media industries, foreign stock ownership in Argentine enterprises is not banned. As per Aeronautic Code Law, foreign stock in enterprises that provide commercial passenger transportation inside the territory of Argentina is limited to 49 percent. The corporation must be incorporated under Argentine law and has its headquarters in Buenos Aires.
Foreign ownership of television, radio, newspapers, journals, magazines, and publishing enterprises is limited to 30% in the media industry. Foreign individuals or foreign company ownership is limited to 1,000 hectares (2,470 acres) in the most productive farming areas in Argentina. The Argentinian government issued Decree 820, easing the requirements for foreign land ownership by changing the percentage that defines foreign ownership of a person or company, raising it from 25 percent to 51 percent of the social capital legal entity. The freedom to conduct business openly and freely in the local market is undoubtedly one of the advantages that come with company formation in Argentina. It is even more essential for businesses wishing to conduct business in Argentina to have a local incorporated presence because the country is now going through a more protectionist period where it is trying to support local manufacturing and rely less on imports.
Advantages of establishing a company in Argentina
There are different types of companies in Argentina, and they offer various advantages:
- Taxes rates may be more favorable;
- Shareholder’s liability is restricted;
- It is simple to transfer ownership by selling shares to another party;
- Shareholders (typically family members) can work for the firm;
- You can have access to additional capital and talents.
If you need further details regarding the advantages that different types of companies in Argentina offer, you can rely on our team members for help. Moreover, if you need assistance in opening a bank account in Argentina, you can get in touch with our consultants. They will provide you with details regarding the requirements necessary to open a bank account as a foreigner in this country.
Taxation in Argentina
Argentina has federal, provincial, and municipal taxes. There is no payroll tax; wage-related social security taxes are covered by employer payments of up to 21% of payroll plus a fixed employee contribution of 14%. This contributes to Argentina’s social security system, which includes unemployment compensation, disability assistance, pensions, and retirement programs, among other things. Residents of Argentina are taxed on their worldwide earnings. Non-residents of Argentina, on the other hand, are only taxed on what they earn in Argentina. If you have either of the following, you are considered an Argentine resident for tax purposes:
- official permanent residency;
- live in this country for 12 months;
- preserve your status as a resident until you become a citizen of another nation or dwell in another country for at least a year.
Besides taxation, choosing the proper business entity in Argentina for your future activities and having success will depend on how the documents and requirements are managed. The entire incorporation process of different types of companies in Argentina can be supervised and guided by our team of company incorporation agents.
Argentina’s federal income tax rate
The Argentinian government collects federal income tax, levying at a progressive rate from 5% to 35%, depending on how much an individual earns. Please find below the federal tax rate:
- In Argentina, the tax year begins on 1st January and ends on 31st December of the same year;
- The government of Argentina has decreased the corporate tax of 35 percent to 30 percent in 2018-2019, and it was decided to be further reduced to 25 percent starting 2020;
- Under some situations, a special flat tax rate of 24.5 percent (known as the Foreign Beneficiary tax) may apply to expats working in Argentina for up to six months.
Also, keep in mind that if you are a non-resident or foreign beneficiary living in Argentina, you will only be taxed on income earned in Argentina, for any exceptional case in this regard, you are welcome to contact our company incorporation experts in Argentina. If you are interested to start a business in Argentina, our team members will provide you with additional guidance regarding the types of companies in Argentina, their structures, taxes, and other necessary obligations, etc.