New BCRA Communications on BOPREAL and dividend payments

On April 30, 2024, Communications “A” 7997 and “A” 7999 of the Central Bank of Argentina were published, which introduces some adjustments to the foreign exchange regulations applicable to the payment of profits and dividends. The main points of these Communications are the following:

• It allows to resident companies to subscribe to Bonos para la Reconstrucción de una Argentina Libre (BOPREAL) for up to the amount in local currency of the profits and dividends which payment is pending to non-resident shareholders, according to the distribution determined by the shareholders’ meeting.

• It allows the access to the foreign exchange market to pay profits and dividends, as long as the applicable requirements are met, by performing a swap and/or arbitrage with the funds deposited in a local account and originated in foreign currency collections of principal and interest from the BOPREAL.

• It allows non-residents to subscribe BOPREALs for up to the amount in local currency of the profits and dividends payments received in the country since September 1, 2019, and that have not been remitted abroad, adjusted by the latest Consumer Price Index available at the date of subscription.

• It allows the access the foreign exchange market to repatriate portfolio investments of non-residents generated in collections in the country of profits and dividends by subscription of BOPREAL, as long as they meet the applicable requirements, by performing a swap and/or arbitrage with the funds deposited in a local account and originated in foreign currency collections of principal and interest from BOPREALs.

• It sets that the sale with settlement in foreign currency or the transfer of the BOPREAL acquired under this mechanism shall not be taken into account for purposes of the preparation of the sworn statements for access to the foreign exchange market (items 3.16.3.1. and 3.16.3.2 of the foreign exchange regulations), when those sales or transfers are made for an amount up to the amount of the BOPREAL purchased in a primary subscription.

• On the other hand, financial entities that approved or have approved the distribution profits may do so in 3 equal, monthly and consecutive installments. Additionally, they must grant the option to each non-resident shareholder to receive their dividends -fully or partially- in a single cash installment provided that such funds are applied directly to a primary subscription of BOPREALs. BOPREALs received by non-resident shareholders may not be transferred to depositary entities abroad or sold with settlement in foreign currency in the country or abroad for a period of 30 and 60 calendar days as from their primary subscription, for two thirds and one third of the subscribed nominal amounts, respectively in each month. Notwithstanding the foregoing, such BOPREALs may be freely and fully applied for other transactions -including their use as collateral for financing required from financial institutions or through the capital markets.

For further information, contact: fxconsultas@bruchoufunes.com

This is a general comment and in no way presupposes legal advice or opinion. If required, please contact our professionals.