Doing Business in Argentina

Argentina is one of the largest countries in South America by both landmass and population. Situated at the southernmost tip of the continent, Argentina shares land borders with Chile to the west, and Bolivia, Paraguay, Brazil and Uruguay, to the north and north-east. Located between the Atlantic and the Pacific, Argentina has always been a significant global trading destination, historically rich in natural resources and with useful connections to the rest of the southern Americas. Having industrialised rapidly, Argentina’s profile grew in the 20th century as the agriculture, manufacturing and tech industries grew into a large domestic market and attracted international interest. Today, Argentina remains a relatively wealthy and stable power, with a GDP of over $545 billion in 2016, and important sectors including food, wine, tobacco, automobiles, textiles, energy, pharmaceuticals, and mining. With a range of natural beauty spots, and vast biodiversity, Argentina’s tourism sector is also growing in economic importance. Still considered an emerging market, Argentina is a member of the G20, the WTO, and the United Nations, and is ranked second on the Human Development Index amongst Latin American nations. In 2018, Argentina was ranked 117 on the World Bank’s Ease of Doing Business Survey. 

Why invest in Argentina?

Investors interested in Argentina should consider the following factors:

  • Economic Benefits: Argentina is one of the largest regional economies (after Mexico and Brazil), with the second-highest GDP (over $545 billion). Since 1993, Argentina’s growth rate has been around 0.64% - and reached 2.7% in the second quarter of 2017.
  • Industrial Diversity: Business opportunities in Argentina cover a diverse range of industries and sectors. Showing particular potential at the moment are the agricultural automotive, high-technology, and fossil fuel sectors. The Argentinian government is also pledging a commitment to support the renewable energy sector.
  • Geographic Advantage: Argentina is a gateway to South and Central America, with excellent shipping, road, rail and air links, including 23 international airports. Argentina ranks consistently high on the Logistics Performance Index in terms of the ease and affordability it offers businesses arranging international shipments.
  • Market Access: As a member of the MERCOSUR regional bloc, Argentina enjoys a range of commercial benefits including free trade access to the markets of Brazil, Paraguay, and Uruguay. The Argentinian government is aiming to expand its international trade agreements over the coming years.
  • Educated Workforce: Argentina has a population of over 43 million people, a high proportion of which hold a secondary education qualification or higher. Argentinian workers have some of the highest levels of English language proficiency in the region. 

Foreign Direct Investment in Argentina 

Argentina’s government is engaged in efforts to promote foreign direct investment in locations across the country, and has signed bilateral investment agreements with over 55 countries worldwide. The FDI climate in Argentina is liberal: foreigners are permitted to invest in all areas of Argentina’s economy, and do so on an equal footing with domestic counterparts.

Foreign investors may be able to access certain support initiatives, determined by the Secretariat for Commerce and Investment. These may take the form of tax credits, tax exemptions, special import regimes, accelerated depreciation of machines and equipment, and more. Certain provincial zones within Argentina may offer financial incentives for FDI. 

Organisations which offer FDI support include:

  • Bank of Investment and Foreign Trade (BICE)
  • Federal Investment Council (CFI)
  • Integral Regional Development Fund (FONDER)
  • Argentine Technological Fund (FONTAR)

Registering a Company and Establishing an Entity in Argentina

Companies must be registered, and established as a legal entity, before commencing operations in Argentina. The process of registering a company involves several steps, and associated costs (in terms of paid-in and startup capital). Companies must also form legal entities in Argentina - the standard forms of legal entity are:

  • Corporations (sociedades anónimas/SA)
  • Limited liability companies (sociedades de responsabilidad limitada/SRL) 

Steps involved in registering a company in Argentina are broadly as follows:

  • Verifying company name
  • Depositing starting capital in National Bank of Argentina account.
  • Submitting registration documents to the Public Register or Commerce of Argentina - and to the appropriate General Inspection of Justice (IGJ).
  • Obtaining a tax identification number for the Argentinian National Tax Office (AFIP) - and subsequently registering for social security contributions.
  • Registering with municipal or district authorities.

The duration of the registration process can vary from 2-3 weeks to months, and involve a variety of fees. Useful resources for the company registration process include:

http://www.jus.gob.ar/igj

http://www.afip.gob.ar/sitio/externos/default.asp

http://www.agip.gob.ar/

Business Banking in Argentina 

It is mandatory to make payments to employees from an in-country bank account. To make payments to the authorities, the company must use the Interbanking Web Platform.

Banks are usually open from 10:00 until 15:00, depending on the city and season. They are closed on Saturday and Sunday.

Working Days in Argentina

The working days in Argentina is Monday to Friday and the working day is generally eight hours long. Due to the siesta, working hours are normally 8.30am to 12.30pm then 4pm to 8pm.

Basic Facts about Argentina 

Between the Atlantic and Pacific oceans, Argentina lies at the southernmost point of South America, sharing the edge of the continent, and its western land-border, with Chile. Civilisation has existed in the region which became Argentina for millennia, but the territory was colonised by Spain in the 16th century. Operated as a colony for over 100 years, Argentina eventually declared, its independence in 1818 - a moment followed by a period of civil war lasting until 1861. Abundant natural resources, and rapid industrialisation, saw Argentina become one of the region’s wealthiest and most developed nations in the 20th century - and today it retains that influence as a member of the G20, the United Nations and other international organisations. As one of the largest territories in South America, Argentina’s landscapes are diverse, ranging from jungles, grasslands, beaches and deserts, to the western mountains of the Andes. Generally a temperate climate, Argentina experiences a variety of seasonal temperatures, and includes a vast amount of biodiversity - which has contributed to growing tourism interest from across the world.  

General Information

Population: 43.85 million (World Bank, 2016)

Capital: Buenos Aires

Major Language: Spanish

Monetary Unit: Argentine peso

Main Exports: Soybeans, wheat, maize, animal feed, flour and vegetable oils

GDP: 12,449.22 USD

Internet Domain: .ar

International Dialing Code: +54

Hello Hola

Good morning Buenos días

Good evening Buenas noches

Do you speak English? Habla usted Inglés?

Good bye Adiós

Thank you Muchas gracias

See you later Hasta luego

Dates are usually written in the day, month and year sequence.  For example, 1 July 2017 or 1/7/17.

Numbers are written with a period to denote thousands and a comma to denote fractions.  For example, AR$ 3.000,50 (three thousand pesos and fifty centavos).

Income Tax and Social Security in Argentina

The Tax Year runs from 1st January to 31st December. A company must be licensed to make any tax and/or social security filing on behalf of a client.

Income Tax

Employee deductions for taxes range from 5% to 35% depending on income level.

Monthly contributions must be made from the 7th-12th of every month to the tax authority.

The typical penalty awarded for the late submission and payment of tax contributions is 2-5 %.

Social Security

Employee deductions for social security are as follows:

  • 11% Pension Fund System
  • 3% Health Insurance
  • 3% Law 19032

Employer contributions for social security are:

  • 17% or 21% Pension Fund System (depending the total head count and the annual earnings of the company)
  • 6% Health Insurance
  • 1% Accident Insurance
  • $10 per each employee for Life Insurance

Monthly contributions must be made from the 7th-12th of every month to the tax authority.

The typical penalty awarded for the late submission and payment of tax contributions is 2-5 %.

Employment in Argentina

New Employees in Argentina 

A new employee must be registered with “Mi Simplificacion”, an online form on the AFIP website. New employees must be registered on the same day that they commence employment with a new company, it is recommended that they do it at least 24 hours before starting.

The following information is required to set up a new start:

  • Full Name
  • Social Security Number
  • Start Date
  • Position
  • Cost Centre
  • Labour Contract or Offer Letter signed by the company
  • Salary
  • Marital Status
  • Family (spouse and children, if applicable)
  • Health Insurance Number
  • Address
  • Telephone Number

Expat new starts must provide the above information, however they must also provide a passport and Argentina Migration Authorities approved visa.  Expat new starts have 90 days to be registered with the relevant authorities.

Leavers in Argentina

A leaver’s final payment must be released four working days after the employee has left the company.

When an employee leaves, the company must update the employee information in “Mi Simplificacion”, stating the employee's last working day. 

Payroll in Argentina

The payroll process in Argentina involves certain withholding obligations on the part of employers - who must withhold income tax and social security contributions from  employee’s wages. Income tax in Argentina is progressive and charged at the following rates:

  • Up to 10,000 ARS - 9%
  • 10,000 - 20,000 ARS - 14%
  • 20,000 - 30,000 ARS - 19%
  • 30,000 - 60,000 ARS - 23%
  • 60,000 - 90.000 ARS - 27%
  • 90,000 - 120,000 ARS - 31%
  • 120,000 or more - 35%

In Argentina, payroll processing also includes social security payments which cover, pension, healthcare, unemployment and family allowance payments. Social security contributions are drawn from employers, who pay at a rate of 17% - and employers, who pay 27%.

Payroll in Argentina may present an administrative burden, especially for foreign businesses unfamiliar with the legal and tax environment. In these situations, it is possible to find a third-party organisation to handle some or all of the process. Global payroll for Argentina represents  a way to manage the administrative complexity of the compliance regulations found across the country’s municipal regions..

Payslips in Argentinian payroll must be provided in hardcopy to employees, and payroll reports must be kept for a minimum of 2 years.

The full guide is available in PDF format for registered users.

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