February 07, 2025
Essential Requirements for Setting Up an LLC in Argentina
Argentina has become an increasingly attractive destination for entrepreneurs looking to expand their businesses. With a growing economy, duty-free zones, and simplified bureaucratic processes, it provides a conducive environment for new ventures. One of the most popular business structures for entrepreneurs is the Limited Liability Company (LLC), or Sociedad de Responsabilidad Limitada (SRL). This blog provides a thorough overview of the steps, conditions, and characteristics involved in opening an LLC in Argentina.
Conditions for Opening an LLC in Argentina
The process of registering an LLC in Argentina has been streamlined through recent reforms designed to reduce bureaucratic hurdles. To establish an LLC in Argentina, the following conditions must be fulfilled:
- Reserving the Company Name
Before proceeding with registration, the first step is to select and reserve a unique company name. This reservation must be made with the relevant local authorities to ensure that the name is available for use.
- Drafting the Articles of Association
The Articles of Association (also known as the Social Contract) outline the rules and internal regulations for the LLC. This document must be created and signed by the shareholders to define how the company will operate.
- Providing Information About the Owners
To complete the registration process, detailed information about the company’s owners (shareholders) must be provided. This includes legal identification and other relevant personal details.
- Notarizing the Partners’ Signatures
The signatures of the partners (shareholders) on the Articles of Association must be notarized by a public notary. This step is crucial for verifying the legitimacy of the documents.
- Appointing a Board of Managers
An LLC must have a board of managers to oversee the company’s operations. These managers are not required to be shareholders but must be appointed based on the regulations outlined in the company’s bylaws.
- Depositing Share Capital
A minimum of 25% of the company’s share capital must be deposited into a corporate bank account. The remainder of the share capital can be paid in later stages.
- Registering for Tax Purposes
Once the LLC is established, it must be registered with the Administration Federal de Ingresos Públicos (AFIP) to obtain a tax ID number. This step ensures compliance with Argentina’s tax laws.
- Obtaining the Fiscal Code
A fiscal code must be obtained for the company to complete the registration process. This code is essential for fulfilling tax obligations and conducting business activities in Argentina.
Characteristics of an LLC in Argentina
The following characteristics define LLC business structure:
- Capital Representation with Quotas
In Argentina, LLCs divide capital through quotas instead of shares. While there is no minimum capital requirement, the company must have adequate funds to meet its objectives. Each quota represents a portion of the capital, with all quotas possessing equal voting rights and face value. Shareholders are permitted to hold multiple quotas.
- Ownership Structure
An LLC can have a minimum of two and a maximum of fifty shareholders. Shareholders can be both individuals and corporations, either domestic or international. However, Argentine corporations cannot be shareholders in an LLC. It is also mandatory for minority shareholders to hold at least 2% of the company’s capital if there are two or more shareholders.
- Flexible Meeting Requirements
LLCs are not required to hold regular meetings as corporations are. Meetings are conducted according to the company’s bylaws, offering greater flexibility in terms of corporate governance.
- Management Structure
An LLC is governed by a board of managers. These managers can act either individually or collectively, depending on the company’s internal regulations. Managers are not required to be shareholders but are accountable for the company’s operations and decisions.
- Accountability of Managers
Managers are responsible for the company’s actions and may be held individually or collectively accountable. In the event of liability, the court will assess each manager’s involvement. If the management is organized as a board, the provisions applicable to corporate directors may also apply.
- Transfer of Ownership
Transferring ownership in an LLC is more complex than in a corporation. Each transfer of quotas requires notarized documentation. However, the operating agreement can specify restrictions on the transferability of ownership.
10 Essential Steps for LLC Incorporation in Argentina
Following a systematic approach to registering an LLC in Argentina ensures that all legal and regulatory requirements are met. Here are the essential steps:
- Appointing a Local Representative
A local representative, such as an agent with power of attorney, can facilitate the entire registration process. This agent ensures compliance with all formalities and regulations.
- Preparing the Required Documents
The main document for LLC registration is the Articles of Association. This document outlines the internal rules of the company and must be properly drafted and signed by the shareholders.
- Registering for Tax Purposes
The Administration Federal de Ingresos Públicos (AFIP) is the authority that issues tax identification numbers for newly formed companies. This step ensures the company is compliant with Argentine tax laws.
- Drafting the Bylaws
The company’s bylaws outline the internal operational framework. These agreements, also known as social contracts, must be notarized by a public notary.
- Opening a Bank Account
A local bank account must be opened to deposit the required capital and conduct financial transactions. This can be arranged quickly with the assistance of experts familiar with the process.
- Obtaining a Business License
Depending on the company’s activities, a business license may be required. This ensures that the company is legally authorized to operate within the country.
- Receiving the Incorporation Certificate
Once the authorities have reviewed and approved the documents, the Certificate of Incorporation will be issued. This certificate signifies that the LLC is officially registered with the Public Commercial Registry.
- Hiring Staff
If the company plans to hire employees, the necessary employment contracts must be created, and the staff must be registered with the appropriate social security and pension systems.
- Obtaining a Company Seal
The company seal is required for formalizing legal documents. It can be obtained after receiving the Certificate of Incorporation.
- Engaging an Accounting Firm
While an in-house accounting department can be established, it is often more efficient to hire an external accounting firm. The firm will handle accounting, payroll, tax returns, audits, and other financial responsibilities.
How Long Does It Take to Register an LLC in Argentina?
The process of registering an LLC in Argentina is typically swift. Once all documents are submitted and approved, the Certificate of Incorporation can be issued in just a few days. This means the company can be operational almost immediately after receiving official approval.
Argentina: A Prime Destination for Entrepreneurs
Argentina’s favorable business environment, with its duty-free zones, industrial parks, and growing infrastructure, has positioned the country as a prime location for both domestic and international entrepreneurs. The simplified registration process for LLCs further enhances its appeal, making it an ideal choice for new business ventures.
Starting an LLC in Argentina presents a valuable opportunity for businesses to enter an emerging market. With a streamlined registration process, favorable economic conditions, and strategic advantages, Argentina remains a top choice for entrepreneurs looking to establish a foothold in Latin America.
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Surendra Singh Chandrawat
Managing Partner
