The Office of Companies of the Province of Buenos Aires (“DPPJ”) established a new regime applicable to foreign companies, including branches under Section 118 and foreign shareholders under Article 123 of Law 19.550. Such regime was established by Disposition No. 64/2024.
Among the main novelties, the following can be highlighted:
Restrictions on Offshore Companies
The DPPJ will not register “Offshore” companies, that is, those whose corporate purpose cannot be carried out in their country of registration or those originating from jurisdictions with low or no taxation.
Offshore companies wishing to engage in activities to fulfill their corporate purpose or to participate in the capital stock of Argentine companies must, prior to doing so, adopt one of the corporate types provided for in Argentine legislation.
Definition and Legal Regime Applicable to Vehicle Companies
Vehicle Companies are those whose registration in the commercial registry is requested exclusively to serve as a “vehicle” or investment instrument of another foreign company that directly or indirectly controls the Vehicle Company.
In this regard, foreign companies applying for registration as vehicle companies—and those already registered as such in the Public Registry—shall be governed by the following regime: (i) The status of as a vehicle company must be declared at the time of its initial registration in the Argentine Republic. (ii) The registration of more than one vehicle company per group will not be allowed. (iii) The registration of vehicle companies will not be allowed if their direct or indirect controlling company is registered in the Argentine Republic under the terms of Sections 118 or 123 of Law 19.550. (iv) The registration of vehicle companies resulting from a chain of control between successive single-person companies will not be allowed, (v) The registration of single-person corporations whose sole shareholder is a single-person foreign company, with or without vehicle status, will not be allowed.
Need for Registration of Foreign Companies with Participation in Local Companies Registered with the DPPJ
A company incorporated abroad that participates in local companies registered in the Province of Buenos Aires must register with the DPPJ under the terms of Section 123 of Law 19.550. However, if the foreign company participates in local companies registered in different jurisdictions in addition to the Province of Buenos Aires, registration in any of them will suffice, provided that it holds controlling status under the terms of Section 33, subsections 1 and 2 of Law 19.550, of a local company in that jurisdiction.
Isolated Acts
The purchase and sale of registrable assets is not considered an isolated act, except in exceptional cases, which must be proven. The DPPJ may require a foreign company claiming the execution of an isolated act to register in accordance with Section 118, third paragraph, or Section 124 of Law 19.550, as applicable.
Registration of Foreign Companies
The Disposition establishes the necessary requirements for the initial and subsequent registration of foreign companies provided for in Section 118, third paragraph of Law 19.550, in order to establish habitual activity, domicile, branch, or permanent representative, and those provided for in Section 123 of Law 19.550, in order to incorporate or participate in local companies.
Among these requirements, the following obligations stand out: (i) to prove the existence of significant economic activity abroad and the location of its management center, (ii) to identify the shareholders of the company, (iii) to prove the full integration of capital, in the case of domicile, branch, or permanent representation, (iv) to individualize the partners of foreign companies, including those of companies with bearer shares, trusts, foundations, and other similar entities, (v) the obligation of designated legal representatives to create and maintain in force until the cancellation of their registration, a guarantee, the cost of which must be borne by the same legal representative.
In this regard, the DPPJ may waive certain requirements in cases of notoriety and public knowledge that the foreign company carries out significant economic business activity abroad and that its management center is also located there.
Additionally, for the purposes of registration under the terms of Section 123 of Law 19.550, the Disposition establishes a new requirement that an investment plan signed by the legal representative be submitted, indicating the list of local companies in which it intends to participate or incorporate in the Argentine Republic, detailing the address of the company, its name—in the case of an already incorporated company—the actual activity it carries out abroad, and the actual activity of the local company or companies it plans to incorporate, identifying the remaining partners and the number of corporate shares it plans to acquire.
Incorporation of the Annual Information Regime (RIA)
Foreign companies registered as branches under Article 118 or registered as foreign shareholders under Section 123 of Law 19.550 must now submit the Annual Information Regime within 120 calendar days following the closing date of the financial statements of the branches, domiciles, or permanent representations. For this purpose, they must submit documentation evidencing significant economic activity and prove that their management center is located outside the Argentinae Republic, documentation accrediting the composition and ownership of the share capital with the data and requirements regarding the partners, and report the value of the participations in local companies and the percentage they represent over the capital and assets.
