Local and Foreign Companies in Argentina: Reducing the Regulatory Burden of the Superintendency of Corporations

The Superintendency of Corporations, the entity overseeing the Public Registry of Commerce in the City of Buenos Aires, has not been eluded by the changes driven by Javier Milei’s Administration.
Appointed by the President, Daniel Vítolo now heads the Superintendency, bringing his expertise in commercial law, specially corporate matters.
Vítolo has set in motion the “Short-, Medium-, and Long-Term Action Plan” aimed at reducing regulatory burden and restoring companies’ autonomy. Here is an overview of some of the corporate changes already in place.

According to Decree 209/2024, the minimum stock capital required for the incorporation of sociedades anónimas is now ARS 30,000,000.

Companies with a stock capital exceeding ARS 2,000,000,000 are now subject to permanent government control.

The maximum 30-year term for companies has been repealed, reverting to the provisions/conditions established in the Argentine Companies Law, which solely requires companies to set a term of duration.

The prohibition to have multiple corporate purposes was lifted.  Companies may now define their corporate purpose a set of legal acts divided into categories, whether related or not.  In addition, the requirement of a reasonable relation among the activities described in the corporate purpose and the stock capital has been removed.

The requirement to include the complete transcription of the board resolution when applying for company registration has been waived.  Now, transcribing the relevant parts of the resolution indicating the decision to register the company is sufficient.  Moreover, the possibility of maintaining confidential the corporate decisions not intended to be in public records has been restored.

The Superintendency’s General Resolution 22/2020, which established a system to control S.A.S., has been repealed.  This control previously implied a collaboration between the Superintendency and the Real Estate Registry to gather information on all real estate transactions involving an S.A.S.

Legal representatives of foreign companies are no longer required to furnish a surety bond on their behalf solely for holding equity in local entities.  However, for branches, headquarters, or other type of permanent representation of foreign companies (Section 118, Companies Law), legal representatives are still mandated to grant a surety bond on their behalf, but the amount of this bond varies.  Now, the surety bond for each representative must be equivalent to 60% of the minimum stock capital established for Argentine sociedades anónimas (currently at ARS 18,000,000) or 60% of the capital stock allocated to the branch.  Furthermore, the minimum and maximum limits set forth in the Superintendency’s regulations are applied: under no circumstances may the surety bonds be less than ARS 300,000 or exceed ARS 1,000,000 for each representative.

The new resolution relaxes several of the limitations established in 2021 through the Superintendency’s General Resolution 8/2021 (now repealed).

1. The possibility to demonstrate that a foreign company carries out economically significant business activities overseas and that their registered office is also located there has been reinstated, particularly applicable to renowned and publicly recognized international corporate groups.

2. The obligation to register foreign companies with the Superintendency when holding equity in local entities based in the City of Buenos Aires has been removed (being unnecessary their registration in other jurisdictions of Argentina).

3. Requirements to register investment vehicles, previously tightened under General Resolution 8/2021, have been relaxed.

4. The option to register companies incorporated in countries, domains, jurisdictions, territories, associated states, and special tax regimes considered uncooperative for tax transparency or in fighting against Money Laundering and Terrorism Financing has been reinstated. However, the Superintendency will apply stringent criteria to evaluate compliance with registration requirements and may require the filing of additional documents. These companies will only be exempt when applying for registration as investment vehicles.

5. Registering offshore companies or companies incorporated in offshore jurisdictions is prohibited.

6. As to registering foreign companies solely for holding equity in local entities, the requirement to submit an investment plan in Argentina has been waived. This investment plan entailed identifying the entity in which equity would be held and the shareholders, among other specifics.

7. The simplified annual disclosure regime has been revised. It can now be filed every five years, instead of annually.
8. The requirement for foreign companies to participate in shareholders’ or members’ meetings through their registered legal representatives or attorneys-in-fact has been eliminated.

The recent modifications are a clear effort to reasonably limit the regulatory and oversight powers of the Superintendency, promoting private business activities and foreign investment.  Nonetheless, there is still a long road ahead in the action plan designed by the new authorities.  New regulatory changes are expected in the short- and mid-term.