Starting a Business in Argentina as a Foreigner: What You Need to Know 

• Starting a business in Argentina as a foreigner has its own benefits such as a large customer market, skilled workforce, and abundance of natural resources. In recent years Argentina has become an attractive destination for foreign entrepreneurs to open their business. However, the process of Argentina company registration is difficult to navigate and requires an effective understanding of the legal and cultural landscape of the country.  

Why You Should Start Your Business in Argentina  

• Argentina has the second largest economy in South America as the strategic location of the county provides access to the markets. The country is a part of MERCOSUR trade that provides preferential trade agreements with neighbor countries Brazil, Paraguay, and Uruguay improving export opportunities. The Argentine government also supports foreign investment through the means of multiple initiatives in the form of tax incentives and simplified rules and regulations for opening a company. Organizations such as Agencia Argentina de Inversiones y Comercio Internacional also provide additional support to foreign business owners.  

Benefits of Starting a Business in Argentina as a Foreigner 

Stability  

• The Régimen de Incentivo para Grandes Inversiones, also known as the Incentive Regime for Large Investments, has guaranteed regulatory stability in Argentina for the next 30 years, offering assistance against changes in taxation laws. This stability is necessary for entrepreneurs in long-term investment planning and also provides them with operational security.  

Supportive government policies 

• The government of Argentina is focusing on reducing legal barriers for foreign entrepreneurs. Recent changes aim to streamline the procedure of business registration and approval, which makes it easy to establish operations.  

Entrepreneurial ecosystem  

• The business landscape of Argentina is rapidly expanding and is supported by a strong network of accelerators as well as incubators. This atmosphere actively supports innovation and collaboration between startups which makes Argentina an attractive destination for starting new business ventures.  

Access to duty-free zones 

• Argentina provides multiple duty-free zones and industrial parks to attract foreign investment. These areas offer additional incentives, such as tax exemptions, and simplify customs processes, which improve the appeal of new companies.  

Legal and Regulatory Frameworks  

Visa and residential requirements  

• For starting a business in Argentina as a foreigner, acquiring the right visa is the key. Foreign entrepreneurs can apply for a business visa which will allow them to engage in entrepreneurial activities. The application for a business visa along with the necessary documents should be submitted to an Argentine consulate or an embassy in the home country of the applicant. The business visa provides a stay of up to 60 days and there is a possibility of a one-time extension for an additional period of 60 days while in Argentina.  

• For entrepreneurs wanting to work or establish their business in Argentina, they may require a temporary work visa with proof of employment with an Argentine company. You can also apply for an Investor Visa (Visa de Inversor), which commands an investment of up to ARS 1.5 million in local business.  

Taxation Laws  

• Starting a business in Argentina as a foreigner, you need to navigate through the complex tax landscape that consists of corporate income taxes, VAT, and withholding taxes. The corporate income tax rates in Argentina are: 

• 35% on income more than ARS 347 million.  

• 25% is charged on taxable income of up to ARS 34.7 million which is approximately USD 40,000.  

• 30% is charged on income between ARS 34.7 million and ARS 347 million which is approximately USD 400,000.  

Value added tax (VAT) 

• The standardized VAT rate in Argentina is 21% with specific goods and services and is subjected to reduced rates of at least 10.5% or increased rates of 27%. VAT should be filed monthly.  

Permanent establishment  

• A foreign company in Argentina should have a permanent establishment in the case of a fixed place of business or if it conducts major activities in the country. In this case, the company is subjected to Argentine taxation based on its local profits.  

Business Culture of Argentina 

• The business culture in Argentina focuses on personal relationships, hierarchy, and trust. Argentinians focus on developing personal relationships prior to engaging in business deals. It is important for foreign entrepreneurs to build trust and rapport by participating in social business events and networking.  

• Argentinians prefer face-to-face communication instead of emails and phone calls. Meetings usually start with small talk to build a comfortable atmosphere. Avoid any direct confrontation as Argentinians do not openly admit their mistakes. It is best to handle disagreements privately.  

• Argentine companies usually have a hierarchical structure as decisions are mostly made by the higher management and are communicated downwards. It is crucial to understand the hierarchy for effective decision-making and navigating complex business interactions.  

Financial Considerations  

• If you are starting a business in Argentina as a foreigner, you need to be aware of some financial considerations and their impact on your business. For instance, the registration fee for starting a business in Argentina is nearly 5% of the estimated income for the first year, this is lower when compared to the OECD averages. In order to establish a limited liability company in Argentina, a minimum paid-up capital of approximately USD 300 is required, while a stock corporation needs at least USD 7,500.  

• The labor costs in Argentina are low, along with electricity and office space charges. This has made the country an attractive destination for startups. However, business owners should have a budget for the rise in costs because of inflation. The annual costs for accounting and tax services in Argentina are around USD 20,000 to USD 34,000 based on the complexity of the business.  

• The corporate tax rate is usually 25%, higher tax rates are applied on the large income brackets. There are also withholding taxes of 7% on dividends and payments to non-residents of 31.5% that foreign businesses should consider.  

• Lastly, foreign business owners should deposit at least 25% of their subscribed capital in a local bank. This is a part of the business registration procedure, which impacts liquidity during the initial phases of startups.  

Conclusion  

• On coming to a conclusion, starting a business in Argentina as a foreigner creates opportunities for expansion that require effective planning and a thorough understanding of the complex regulatory framework. It is important to understand legal and financial considerations when starting a business in Argentina. If you need assistance in the Argentina company registration process contact Tetra Consultants and our team of experts will help you at every step of the way.  

• Contact us and our team will get back to you within 24 hours.