Doing Business in Argentina | Global Law Group

[co-authors: Carlos Alfaro, Liliana Arauz, Javier Medin, Agustín Negre, Ignacio Celorrio, Pedro Mazer, Sebastian Rodrigo]*

1. What is the current business climate in your jurisdiction, including the main political, economic and / or legal activities on the horizon in your country that could have a significant impact on business?

Argentina is still recovering from a massive debt accumulated under the last government. The current government is trying to renegotiate the debt to sustainable levels. Unfortunately, the COVID-19 pandemic has added a huge financial burden. Social programs and debt relief plans have been successfully implemented to reduce the social impact. However at a cost. Likewise, the typical restrictions imposed by health measures related to COVID-19 have not been well received by any sector of society. The middle and upper classes are very unhappy. Midterm elections will take place in November 2021. The result will have an impact on investments and business.

2. In which countries do you see the most inward investment? What about outgoing?

The uncertainty over the restructuring of the external debt had already negatively affected inflows in 2020, before the COVID-19 crisis. The United States, Spain and the Netherlands accounted for more than half of inward FDI. The other main investing countries are Brazil, Chile, Switzerland, Uruguay, France, Germany and Canada. These investments were primarily focused on manufacturing, mining and petroleum extraction, commerce, banking and other financial institutions, information and communications, and agriculture.

Outgoing: Chile, Uruguay and Paraguay are the countries which, due to their geographic location and socio-economic characteristics, can receive Argentinian investments. Uruguay and Paraguay in agriculture and animal husbandry. Uruguay in real estate and tourism. Chile in the cellar and mining. ??

3. In which sectors / industries do you see the most foreign investment opportunities?

  • Mining
  • Cryptocurrencies, Fintech and the Tech Industry as a Whole
  • Knowledge economy
  • Energy – Oil and gas
  • Renewable energy
  • Construction

4. What advantages and pitfalls should others know about doing business in your country?

Understanding the political and economic scenarios of the region makes it possible to anticipate changes in the legal framework and to determine the impact of these changes on the economic cycle. This is why our firm offers political and legal risk analysis services. We are, to our knowledge, the only law firm in Argentina that offers this type of service. Legal risk analysis is considered to be a key element for decision making in direct and financial investment. It is part of our firm’s culture to provide our clients with insightful forecasts of the region’s environment. We believe this tool is the key to any investment or transaction in any country.

There are no restrictions for foreign investors to participate in companies incorporated in Argentina. Foreign investments do not require prior approval and benefit from the same conditions as those applied to local investors, being subject to the same rights and obligations as national investors. Nevertheless, foreign investments are subject to the laws governing the specific sectors and activities in which these investments are made. In this regard, there are a few activities that require foreign investors to obtain prior approval from Argentinian regulators (for example, the defense, banking and finance, insurance and broadcasting sectors).

5. What is a cultural fact or custom about your country that others should be aware of when doing business there?

Social empathy is crucial. Argentines do not like the attitude of a “hard negotiator”. Therefore, spending fifteen minutes chatting at the start of a meeting and lunch or dinner is a recommended recommendation.

*Alfaro-Abogados

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About Marjorie C. Hudson

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