New regulation on foreign companies operating in the Province of Buenos Aires
On July 17, 2024, the Regulation D.P.P.J. No. 64/2024 enacted by the Provincial Directorate of Legal Entities concerning the regulation of foreign companies operating in the Province of Buenos Aires (the “Regulation”) will come into effect.
The Regulation sets forth a comprehensive framework governing the various modes of operation of foreign companies, such as the regular performance of acts included in their purpose, the opening of branches, permanent seats or representations, participation as shareholders in local companies, their adaptation to Argentine legislation, and the cancellation of their registrations.
Among the most relevant issues addressed, we can highlight the following:
- The formal and substantive requirements for the initial and subsequent registration of foreign companies, as provided for in articles 118, third paragraph, or 123 of the General Companies Law (“LGS”), among which is the obligation to prove the existence of significant economic activity abroad and the location of its management center, through various criteria and documents.
- The identification of the partners of foreign companies, including those of companies with bearer shares, trusts, foundations, and other similar entities.
- The inadmissibility of the registration of “offshore” companies from jurisdictions with no or low taxation unless they fully comply with Argentine legislation.
- The definition and applicable regime for “vehicle” companies, which are those that act as an investment instrument of another foreign company that exercises control over them.
- The restrictive criterion for the registration of companies from countries, domains, jurisdictions, territories, associated states, and special tax regimes, considered non-cooperative for the purposes of fiscal transparency and/or non-collaborative in the fight against money laundering and terrorist financing.
- The effects and obligations arising from registration, such as the validity and binding nature of notifications made to the registered office, the exclusive action of the legal representative or duly authorized attorney, and the integration of the assigned capital.
- The supervision regime and the filing of financial statements and the annual informative regime of foreign companies, as well as the causes for the cancellation of their registration.
- The procedure for adaptation to Argentine law of foreign companies that have their domicile or their main purpose to be fulfilled in Argentina, according to article 124 of the LGS.
We invite you to review the full text of Annex I of the Regulation, which is available at the following link.
Furthermore, we remain at your disposal to advise and support you in complying with the obligations and procedures arising from this new Regulation.
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This is a general comment which does not imply an advise or legal opinion. In case it is required, please, contact our professionals.