Pursuant to the FDI Protection Act, foreign investors can invest in the Republic of Argentina without securing government approval & in accordance with the same rules that are applicable to domestic investors. Non-domestic investors can participate in mergers & acquisitions in the Republic of Argentina, put money in innovative projects in the Republic of Argentina & register joint ventures in the Republic of Argentina. Non-Argentinian companies can also take part in nationally funded R&D projects.
Investing in the Republic of Argentina also requires seeking a consultation of an expert on FDI in Argentina. You can always hire one if you get in touch with IQ Decision UK.
Expropriation & Compensation
Under the Constitution of Argentina, any expropriation of assets must be done in strict accordance with Argentinian legislation & include proper compensation. Under BITs, investments’ assets cannot be nationalized or expropriated, while investors themselves must be paid a fair & timely compensation.
If foreign investors have their assets illegally expropriated, they may file a claim in accordance with applicable investment agreements. They may also reach out to competent legal experts who will give them qualified help with filing a claim for violation of an investment agreement in Argentina.
Protection of Investors’ Rights
According to Argentinean legislation, shares of private companies can only be expropriated under the Expropriation Act. In case of expropriation, the company’s owners must be paid a fair compensation & their property must be formally declared public.
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This law additionally regulates the formal expropriation procedure. According to it, prior to taking ownership of the company’s assets, a properly authorized body must conduct their evaluation.
However, this procedure may lead to certain difficulties, & partly because Argentinian laws prohibit payment of compensation for lost profits.
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Depending on the methodology used to assess the value of expropriated property, official estimates can vary significantly. However, Argentinian laws allow for initiation of legal proceedings if the owners of expropriated property do not agree with the methodology used.
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Another method of nationalization includes application of legislative norms, which significantly limits the exercise of property rights. In such cases, Argentinian laws provide for several legal remedies that can be applied on a case-by-case basis.
For example, owners of expropriated property may regard it as “abnormal” expropriation & file a lawsuit for damages. Alternatively, they can seek cancellation of the said provisions & demand full recompense for all losses incurred.
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Nationalization can also occur if a license or permit granted to investors are unilaterally revoked. In this case, license or permit holders can challenge nationalization by citing applicable administrative norms. And it’s not until the administrative process is completed that they are legally allowed to file a lawsuit.
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In all cases listed above, owners of expropriated property can sue the Argentinian government by filing a lawsuit with federal courts. however, they should keep in mind that federal courts tend to decide in favor of the Argentinian government if there’s been no clear violation of applicable laws.
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