This publication is a joint project with Doing business in Argentina Contents Executive summary 4 Disclaimer Foreword 6 This document is issued by HSBC Bank (Argentina) Company Limited Introduction – Doing business in Argentina 8 (the ‘Bank’) in Argentina. It is not intended as an offer or solicitation for business to anyone in any Conducting business in Argentina 13 jurisdiction. It is not intended for distribution to anyone located in or Taxation in Argentina 18 resident in jurisdictions which restrict the distribution of this document. Audit and accountancy 29 It shall not be copied, reproduced, transmitted or further distributed Human Resources and Employment Law 34 by any recipient. Trade 37 The information contained in this document is of a general nature Banking in Argentina 40 only. It is not meant to be comprehensive and does not HSBC in Argentina 43 constitute financial, legal, tax or other professional advice. You Country overview 44 should not act upon the information contained in this publication without Contacts and further information 46 obtaining specific professional advice. This document is produced by the Bank together with PricewaterhouseCoopers (‘PwC’). Whilst every care has been taken in preparing this document, neither the Bank nor PwC makes any guarantee, representation or warranty (express or implied) as to its accuracy or completeness, and under no circumstances will the Bank or PwC be liable for any loss caused by reliance on any opinion or statement made in this document. Except as specifically indicated, the expressions of opinion are those of the Bank and/or PwC only and are subject to change without notice. The materials contained in this publication were assembled in May 2012 and were based on the law enforceable and information available at that time. Executive summary Located in South America • Foreign enterprises prefer a • Although Argentina can be • Strong labour unions have • As an exception to the above and bordering Brazil, Chile, corporation, a limited liability considered a high-tax country, been in existence for many rule, foreign nationals assigned Uruguay, Bolivia and Paraguay, partnership (‘S.R.L’), or a branch certain tax incentives are granted years but, with rare exceptions, to Argentina for working the Argentine economy covers as the local form of entity. in several fields such as the unions and individual workers reasons and for a period not a wide spectrum of industrial mining industry, biotechnology, have a generally favourable exceeding five years are and commercial activities. • It is relatively straightforward software and oil & gas industries, attitude toward foreign considered as non-residents It presents opportunities for to setup and close a business among others. investment and management. for tax purposes. Non-residents foreign investors across these in Argentina, however it are taxed only on their activities, with access to a should be noted that certain • Furthermore, Argentina has • Social security costs constitute Argentine-source income. highly qualified labour force. administrative procedures signed Double Tax Treaties, a very sizable part of the cost of should be followed and these following in general terms, doing business. Fringe benefit Key operating points: can be time consuming. the Organisation for Economic remuneration is significant only Co-operation and Development at the managerial level. • Business may be conducted • As a result of the devaluation (‘OECD’) and/or UN Model in Argentina by incorporated of the Argentine peso at the Tax Convention, with several • Argentine nationals living in companies, partnerships, beginning of 2002, several territories, outlined on page Argentina are considered as individuals, and branches foreign exchange regulations 18 in Taxation. tax residents. In general, of foreign businesses. In all were issued to limit the foreign nationals acquire cases, key information must be transfer of money abroad but residence for tax purposes registered in the Public Registry they have been somehow when they have been in the of Commerce, and the conduct relaxed up to date, although country for 12 months of a and dealings of the enterprise some formalities have still to particular taxable year, or are governed by the commercial be observed. when they have obtained a code and supplementary laws permanent residence visa and regulations. In the case from the national immigration of a general partnership of authority. Tax residents are a non-commercial nature or taxable on world-wide where the commercial code income, and a foreign tax is silent, the civil code applies. credit is available limited to the rise of the income tax liability due to the inclusion of the foreign source income in the income tax computation. 4 Foreword The World is changing, HSBC Argentina is the fifth The agricultural sector is Gabriel Martino globalising and becoming more largest Private Bank in thriving, producing both seeds President and Chief complex. Emerging markets are Argentina. We have a customer and manufactured products Executive Officer growing faster than developing base of more than 1.5 million that are exported world-wide. HSBC Argentina ones. World trade is growing individual clients, and over Manufactured goods are also at a faster pace than countries, 85,000 business clients. We growing, led by cars, consumer and commodity prices have have significant presence in all electronics and steel. Services risen to new levels. segments (Personal Financial such as tourism, financial services Services, Commercial Banking, and off-shore activities (e.g., call Competitive intensity amongst Global Banking and Markets), centres, software development) companies is increasing, and and leading positions in Foreign are also on the rise. customers are more demanding Exchange, Trade, Leasing, than ever. Technology is Commercial Loans, Car Loans, Argentina’s culture is also fundamentally changing the and Credit Cards. We are also fascinating. Dancing Tango has way we live and do business. leaders in meeting the needs of become one of the most popular our customers in Life Insurance. activities for locals and visitors, In this context, HSBC establishes watching a football match trusted relationships with our We are present in 22 provinces between River and Boca can corporate clients to help them through a network of 135 branches, be a thrilling experience, and win and stay ahead of their and more than 880 ATM´s and having our delicious beef during competition. Our ability to connect Self-Service Terminals. We are an ‘Asado’ in a typical ‘Estancia’ customers around the world focused in building long-term can be an amazing treat. is unparalleled, partnering with relationships, helping our clients companies to grow their manage their finances through For all these reasons, Argentina businesses whilst meeting their a broad range of services. is an attractive business market whole range of financial services and destination nowadays. needs. Our financial strength Argentina is a vibrant economy This guide, in partnership and brand sets us apart from today. Global trends are favouring with PricewaterhouseCoopers, our competition globally. Argentina, as commodity prices helps corporate clients to better increase and main trading partners understand Argentina and explore (i.e., China, Brazil) grow at new business opportunities. a fast pace. Local economic fundamentals have also improved. The economy has grown at 6-7% rates since 2003, foreign reserves are significant, fiscal and current accounts are healthier, and the debt burden has significantly declined after the restructuring. 6 Introduction Doing business in Argentina Economic environment The year 2011 showed recovery consolidation of economic After registering in 2009 the activity, after the 2009 first contraction since the slowdown and the 2010 Second World War, the world recovery. However, several economy experienced what internal imbalances such as seemed to be a strong recovery inflation, an increase in the in 2010. However, in 2011 the energy sector external deficit, euro area went through an long-term funding have yet to acute crisis, whilst attempting be resolved. to recover. The market worries about fiscal sustainability in Location and access Greece, Italy and Spain led to a to other markets sharp increase in sovereign yields. Strong fiscal policy Argentina is located responses and some good approximately between news about the US economy latitudes 23°S (Tropic of turned things around. Capricorn) and 55°S (Cape Accordingly, weak recovery Horn). The Andes separates the resumed in the major advanced country from Chile in the west; economies, and activity and it borders Bolivia and remained relatively solid in most Paraguay in the north; and emerging and developing Brazil, Uruguay and the South economies. Under this situation, Atlantic Ocean to the east. the Argentine economy continued with its recovery Establishing a new business from the sharp slowdown of 2009. GDP at constant prices The Argentine economy covers increased almost 9% year-on- a wide spectrum of industrial year. Private consumption, a and commercial activities component of aggregate owned by closely held private demand, which has been the corporations and holdings principal engine of Argentina’s (foreign or locally owned), family economic growth (according to concerns and a large number official statistics), recorded of small business entities. positive growth rates in the four Stock markets exist in major quarters of 2011, growing over cities,