Argentina – The Benefits of the SAS Corporate Vehicle
Argentina has done a good job over the last few years of streamlining the incorporation process for companies looking to establish a new entity. It was previously time consuming and complicated to incorporate a company, particularly for foreign companies that were looking to enter the market. This changed in 2017 when a new corporate vehicle was introduced known in Spanish as Sociedad por Acciones Simplificada (“SAS”).
Unlike other corporate vehicles available in Argentina, the SAS is very flexible, fast to incorporate, highly customizable, and cost-effective. In the short time since it has been introduced, it has become the de-facto entity for most types of businesses.
Sociedad por Acciones Simplificada (“SAS”).
- There is the possibility to have only one shareholder who can be an individual or legal entity.
- There is the option to have multiple corporate purposes which are listed in the bylaws and with the tax office. That is, you can provide different services from the same company and there is no need for the activities to be related. For example, if you previously listed that your business provided engineering services, then you could not sell products from the same company since these corporate purposes was not related or listed.
- The corporate bylaws are highly customizable which means that companies can have more control over how they want the company governed.
- The minimum capital when incorporating a SAS is very reasonable. It must be equivalent to two monthly minimum salaries.
- Shareholders limit their liability to the shares they have subscribed and effectively paid.
- Board and shareholder meetings can be held remotely and not only at the registered office making it easier for foreign companies to govern the entity.
- There must be a legal representative in-country, but they can be local or an expat The only requirement is that at least one of the managers is a resident.
- SAS can have their corporate and accounting books by electronic means.
Incorporation Process – Practical Tips
- The SAS stands out for the expeditiousness of the initial registration process, which in theory, can be obtained within 24 hours of filing the relevant documentation, provided that the IGJ’s (General Justice Inspection) pre-approved bylaws template is used.
- If the pre-approved bylaws template is not used, a legal opinion issued by a public notary or lawyer must be submitted. In our opinion, most foreign companies will use bylaws drafted by their local lawyer so extra time frame should be expected for both in drafting the bylaws and that submitting them to be approved.
- We also note that foreign shareholder must be previously registered at the IGJ (General Justice Inspection). The time for registration of the foreign company is around 2 to 3 months once the documentation is filed at the IGJ.
- One possible workaround is to incorporate the company first with a local shareholder, most likely your lawyer, and then transfer the shares once the foreign shareholder has been registered.
The addition of the SAS option in Argentina was in response to the success of similar corporate vehicles that were introduced in Chile and Colombia in prior years. The SAS model has significantly reduced the time it takes to incorporate a company in Argentina. More importantly, the main advantage for foreign companies is the flexibility that this corporate vehicle provides and the ability to have only one shareholder.
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