Published on and written by Cyril Jarnias
Argentina offers numerous opportunities for foreign entrepreneurs looking to establish themselves in its dynamic market. However, choosing the legal status for your business is a crucial decision that will significantly impact your operations. In this article, we will explore the main options available to you and guide you through this important decision.
The Most Common Legal Structures in Argentina
Argentina offers several legal forms for businesses, each with its own advantages and disadvantages. Here are the most popular options:
1. Limited Liability Company (LLC – Sociedad de Responsabilidad Limitada)
The LLC is a highly sought-after structure for small and medium-sized businesses in Argentina. It offers limited liability to partners and relatively simple management.
- Minimum of 2 and maximum of 50 partners
- Share capital divided into social shares
- Liability limited to the amount of contributions
- More flexible management than a Corporation
2. Corporation (SA – Sociedad Anónima)
The Corporation is the preferred legal form for large companies and major projects. It allows for a clear separation between ownership and management of the company.
- Minimum of 2 shareholders (no maximum)
- Share capital divided into shares
- Liability limited to the amount of contributions
- More complex governance structure (board of directors, shareholder meetings)
3. Simplified Stock Corporation (SAS – Sociedad por Acciones Simplificada)
Introduced in 2017, the SAS is a modern and flexible legal form, particularly suitable for startups and innovative companies.
- Can be created by a single person
- Simplified creation and management procedures
- Great flexibility in internal organization
- Possibility to create different classes of shares with varying rights
Sole Proprietorship or Corporation: What to Choose for Your Argentine Project?
The decision between a sole proprietorship and a corporation depends on several factors. Here are some elements to consider:
Sole Proprietorship (Monotributo)
The Monotributo system in Argentina allows individual entrepreneurs to benefit from a simplified tax and social security regime.
- Administrative and accounting simplicity
- Reduced creation and management costs
- Suitable for small activities and freelance professions
- Unlimited liability of the entrepreneur for personal assets
- Revenue limits that must not be exceeded
- Difficulties in raising funds or forming partnerships
Corporation
Creating a corporation (LLC, Corporation, or SAS) offers more possibilities for developing your business in Argentina.
- Limited liability for partners
- Increased credibility with partners and clients
- Facilitated expansion and fundraising opportunities
- More complex creation and management formalities
- Higher operating costs
- Greater accounting and tax obligations
Key Factors for Making the Right Choice
To determine the most suitable legal status for your project in Argentina, consider the following elements:
1. Nature and size of your business
A small consulting activity may be satisfied with the Monotributo, while an industrial project will likely require creating a corporation.
2. Growth prospects
If you anticipate rapid growth or fundraising, opt for a corporate structure like the SAS or Corporation.
3. Capital needs
Corporations offer more flexibility for attracting investors and raising funds.
4. Risk management
The limited liability of corporations protects your personal assets in case of difficulties.
5. Taxation
Each structure has its own tax implications. Consult a local accounting expert to optimize your situation.
The Importance of Local Legal Support
The Argentine legal system can be complex for foreign entrepreneurs. It is highly recommended to seek assistance from a local lawyer specializing in business law to guide you through the process.
- Analyze your project and recommend the most suitable legal structure
- Assist you with business creation formalities
- Inform you about legal and tax obligations specific to your business
- Secure your relationships with local partners
Good to know:
Argentine legislation evolves regularly. Make sure you always have the most up-to-date information by consulting official sources or seeking assistance from a business law professional.
Conclusion: A Strategic Choice for Your Success in Argentina
Choosing the legal status for your business in Argentina is a crucial decision that will influence its future development. Take the time to thoroughly analyze the different options and their long-term implications.
Whether you choose a sole proprietorship or a corporation, the essential thing is to select the structure that will allow you to develop your business smoothly while complying with local regulations.
Do not hesitate to seek advice from local experts to guide you through this process. Their in-depth knowledge of the Argentine market and its legal specifics will be a valuable asset for the success of your entrepreneurial project.
Disclaimer: The information provided on this website is for informational purposes only and does not constitute financial, legal, or professional advice. We encourage you to consult qualified experts before making any investment, real estate, or expatriation decisions. Although we strive to maintain up-to-date and accurate information, we do not guarantee the completeness, accuracy, or timeliness of the proposed content. As investment and expatriation involve risks, we disclaim any liability for potential losses or damages arising from the use of this site. Your use of this site confirms your acceptance of these terms and your understanding of the associated risks.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
