One of the most popular forms of FDI in the Republic of Argentina is purchasing shares of an Argentinian company. Transactions involving simultaneous & delayed signing/completion are also possible. That normally depends on the terms agreed upon by parties & their preliminary counter-arrangements. If a deal is concluded in a regulated industry, its conclusion may require obtaining prior approval.
Those considering concluding an M&A deal in Argentina should keep in mind that purchasers must make an offer to minority stakeholders if the deal results in a change of control. Transferring assets to a target company in the Republic of Argentina implies that buyers bear joint & several liability before sellers for all obligations undertaken by them before the completion of a deal.
Purchasing an Argentinian Company: Legal Framework
Those planning to establish a PEF in the Republic of Argentina should keep in mind that Argentina doesn’t have any particular rules governing creation of PEFs. Money necessary for their establishment is usually raised outside Argentina & invested via SPVs. Creating an SPV in the Republic of Argentina requires foreign legal entities to appoint their representatives & apply for registration with the relevant tax authorities & State Register.
Corporate vehicles that are frequently used in the Republic of Argentina include:
Non-residents can purchase shares of an Argentinian company in unlimited quantities.That said, there may be some restrictions in some regulated industries. If a foreign entity is registered in a jurisdiction where financial transparency or AML requirements aren’t observed, it must be prepared for additional scrutiny.
Potential investors should take into consideration double taxation treaties signed by Argentina. Doing so will enable them to structure their transactions properly.
Argentina: Entering the Capital Market
Telecommunications & fintech are the two most popular industries in which foreign companies invested heavily in 2018-2019. There’s a special program whose main goal is to promote investments in hi-tech companies. Those qualifying for it can get some tax cuts & social benefits. To be eligible for them, they must be registered with the Register of Beneficiaries & comply with no less than 2 criteria. After meeting the requirements, applicants can receive the following benefits:
- reduced income tax (by 15%);
- reduced social insurance contributions;
- no VAT.
However, they must pay no less than fifteen percent percent of the tax benefits provided under the program.
There’s no authorities regulating PE transactions in the Republic of Argentina. If an SPV is registered in Buenos Aires, it will be overseen by the IGJ.
When it comes to SAS, SAU & SA, they mustn’t notify the IGJ when transferring shares. However, transferring quotas to SRLs requires registration with the General Inspectorate of Justice so that it can be enforceable against 3rd parties. Listed companies get regulated by the CNV.
A specific industry in which target companies operate determines whether they'll be overseen by other government agencies. Deals involving a change of control require getting approval from the Antimonopoly Commission.
Seeking to buy a company in the Republic of Argentina? Need advice on company registration in Argentina? Why not contact IQ Decision UK?