Published on and written by Cyril Jarnias
Argentina, a dynamic South American country, is increasingly attracting entrepreneurs worldwide thanks to its startup-friendly ecosystem and innovation potential. In this article, we will explore the reasons that make Argentina an attractive destination for launching startups, the most suitable legal structures, as well as the funding options available to develop your entrepreneurial project in this exciting country.
Argentina: Fertile Ground for Innovative Startups
Argentina has positioned itself in recent years as one of the most promising technology hubs in Latin America. Several factors contribute to making this country a prime destination for entrepreneurs looking to launch their startup:
A Thriving Startup Ecosystem
The Argentine startup ecosystem has experienced exponential growth over the past decade. Buenos Aires, the capital, has become a true nerve center of innovation, housing numerous incubators, accelerators, and coworking spaces. Companies like Mercado Libre, Globant, and OLX, which have become unicorns, demonstrate the potential for success in the country.
A Skilled and Creative Workforce
Argentina boasts an exceptional talent pool, with renowned universities training thousands of engineers, developers, and qualified professionals each year. The country particularly stands out in fields such as artificial intelligence, biotechnology, and fintech.
Competitive Operational Costs
Compared to other major global tech cities, the cost of living and salaries in Argentina remain relatively low, allowing startups to reduce operational expenses while benefiting from highly qualified staff.
An Ideal Test Market
With a population of over 45 million and a high rate of new technology adoption, Argentina offers an ideal test market to validate innovative concepts before exporting them to other Latin American countries or internationally.
Favorable Government Policies
The Argentine government has implemented various initiatives to support entrepreneurship and innovation. The Entrepreneur Law, passed in 2017, notably simplified the business creation process and offered tax benefits to startups.
Good to Know:
Argentina regularly ranks among the best countries in Latin America to launch a startup, thanks to its dynamic ecosystem, skilled workforce, and innovation-friendly policies.
Suitable Legal Structures for Your Argentine Startup
Choosing the right legal structure is a crucial step when creating your startup in Argentina. Here are the main options to consider:
Sociedad por Acciones Simplificada (SAS)
The SAS, introduced in 2017, has become the preferred structure for many Argentine startups. It offers several advantages:
- Quick and simplified creation (24 to 48 hours)
- Low minimum share capital
- Flexibility in structure and management
- Possibility of having a single shareholder
- Ease in attracting investors
Sociedad de Responsabilidad Limitada (SRL)
Equivalent to the French SARL, the SRL remains a popular option for small and medium-sized enterprises:
- Limited liability for partners
- Simple structure with a maximum of 50 partners
- Management flexibility
- Fewer formalities than the SA
Sociedad Anónima (SA)
The SA is suitable for larger projects or those requiring significant fundraising:
- Ideal structure for companies aiming for rapid growth
- Ease in attracting institutional investors
- Ability to issue shares and go public
- Increased credibility with partners and clients
The choice of legal structure will depend on several factors: the size of your project, your growth objectives, the number of founders, and your funding needs. It is recommended to consult a lawyer specialized in Argentine business law to guide you in this crucial decision.
Good to Know:
The SAS is generally considered the most suitable structure for startups in Argentina, offering an optimal balance between simplicity, flexibility, and attractiveness to investors.
Funding Your Startup’s Development: Argentine Options
Funding is often the lifeblood for startups. Fortunately, Argentina offers various options to support the development of your innovative business:
Incubators and Accelerators
Argentina has numerous incubation and acceleration programs that offer not only support but sometimes initial funding:
- NXTP Labs: one of the most renowned accelerators in Latin America
- Wayra: Telefónica’s accelerator, present in Buenos Aires
- IncuBAte: incubation program from the Buenos Aires city government
Venture Capital Funds
The Argentine venture capital market is expanding rapidly. Several local and international funds are active in the country:
- Kaszek Ventures: one of the largest funds in Latin America, based in Buenos Aires
- Draper Cygnus: Argentine fund specializing in disruptive technologies
- NXTP Ventures: fund focused on early-stage technology startups
Business Angels
Business angel networks are developing rapidly in Argentina, offering not only capital but also expertise:
- AngelesMBA: network of investors from top business schools
- IAE Angels: network linked to IAE Business School
Government Programs
The Argentine government has implemented several initiatives to financially support startups:
- Fondo Semilla: grant program for projects in the initial phase
- Fondo Aceleración: aimed at startups in the growth phase
- FONDCE (Fondo Fiduciario para el Desarrollo de Capital Emprendedor): public-private fund for entrepreneurship development
Crowdfunding
Crowdfunding platforms are gaining popularity in Argentina:
- Ideame: the country’s main crowdfunding platform
- Kickstarter: accessible to Argentine projects since 2016
Funding Strategy
To maximize your chances of obtaining funding, it is crucial to:
- Prepare a solid business plan and a convincing presentation
- Participate in networking events and pitch competitions
- Build a strong network in the Argentine entrepreneurial ecosystem
- Consider strategic partnerships with established companies
Good to Know:
The startup funding ecosystem in Argentina is growing rapidly. Although the amounts raised are generally lower than in more mature markets like the United States, opportunities are multiplying for innovative entrepreneurs.
Conclusion: Argentina, Land of Opportunities for Ambitious Startups
Argentina offers an environment conducive to the creation and development of innovative startups. With its dynamic ecosystem, skilled workforce, competitive operational costs, and expanding funding options, the country positions itself as a prime destination for visionary entrepreneurs.
Whether you are a local or foreign entrepreneur, Argentina offers you the opportunity to transform your innovative idea into a thriving business, capable of conquering not only the Argentine market but all of Latin America and beyond.
However, as with any entrepreneurial project, success will depend on your ability to navigate this ecosystem, adapt to local specificities, and seize the opportunities that arise. With adequate preparation, a clear strategy, and a good understanding of the Argentine market, your startup will have every chance to prosper in this promising country.
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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.
