Doing Business In Argentina

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Return to table of contents Chapter 7: Trade and Project Financing 3/4/2008 How Do I Get Paid (Methods of Payment) How Does the Banking System Operate Foreign-Exchange Controls U.S. Banks and Local Correspondent Banks Project Financing Web Resources How Do I Get Paid (Methods of Payment) Return to top Letters of credit (L/Cs) may be used to pay for U.S. exports to Argentina. However, commercial bankers consulted report that only large companies importing products for huge amounts of money are now opening irrevocable letters of credit with a foreign bank. Even though Argentina has not yet returned to pre-crisis levels, some local banks are starting to open letters of credit once the line of credit has been approved for that Argentine company. Multinational firms and large Argentine companies are still the primary customers for these L/Cs. Another payment option may be direct payment from Argentine importers’ overseas bank accounts. Bank drafts and documentary collections are also being used. While they do help safeguard the U.S. exporter's title to goods until payment has been received, all credit and country risk remains with the exporter. There is no obligation for the bank to cover these risks. Consequently, documentary collections are less costly than letters of credit and, where the exporter is comfortable with these risks, they offer a practical and efficient solution, particularly for Argentine subsidiaries of U.S. companies. Local bankers report that now the majority of sales to Argentine importers are currently taking place on open account. At present small and medium size Argentine companies are extremely liquid, allowing them to upgrade production lines by for example acquiring new machinery. As a result, open account sales generally take place between small and medium size firms. U.S. exporters should consider open account payment terms only if they feel confident in the Argentine client's ability and willingness to pay. How Does the Banking System Operate Return to top In Argentina, Law No. 21,526 of 1977 governs banking activities. Under this law, Argentina’s Central Bank (BCRA) is the implementing authority and the regulatory body, which issues standards and controls activities of financial institutions included in the law (authorization and operating conditions within the banking industry; definition of permitted, prohibited and limited transactions; monetary controls; meeting certain operating ratios; information; accounting and control systems; dissolution and liquidation; etc.). Holdings of foreign (nonresident) individuals and legal entities in local banking institutions with foreign capital are to exceed 30 percent of capital stock (either directly or indirectly), or the foreign shareholder must be able to control a sufficient number of votes to impose its decisions at shareholders’ meetings. It is also required to register with the
Registry of Foreign Investments. Foreign banks may only do business in Argentina as investment or commercial banks and must have the BCRA prior authorization in order to open branches in Argentina. In addition, there are minimum capital requirements for these entities to be allowed to do business. Features of the Argentine Financial System Classification • Commercial banks - Government-owned: federal, provincial and municipal. - Private local banks with Argentine capital: cooperative banks and noncooperative banks. - Foreign banks: private local and local branches of foreign banks. • Investment banks - Government-owned provincial banks. - Local banks with foreign capital. • Mortgage banks • Development banks • Savings banks • Finance companies • Savings and loan associations for building homes or other real estate property • Credit associations • Representative offices Funding Systems. Main Transactions Financial transactions are basically made in pesos (legal tender), in US dollars and in Government securities. The segments making up Argentina's financial system are: peso segment, foreign currency segment and liquid network (the banks own capital - all the banks in the financial network). The main transactions are: • Overdraft • Promissory notes • Discount of bills • Mortgage loans • Collateral loans • Consumer loans • Credit cards • Demand deposits • Certificates of deposit • Common savings deposits • Deposits in Argentine-government securities • Interbank transactions • Swaps • Banker's acceptances • Spot exchange transactions 3/4/2008
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Doing Business in Argentina: 2008 C
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3/4/2008 Argentina’s banking syst
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3/4/2008 The zero percent import du
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Policy Short-term Short/Medium Term
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meetings. The service includes at l
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approximately 87 percent of the tot
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more limited and delivery is a grow
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Goods: Preference will be given to
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material, input, or material needed
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terminals at international airports
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As in many countries, personal rela
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"Clarin", "La Nacion", and "Ambito
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Av. de Mayo 605, Piso 3 C1084AAB Bu
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Business Facilitation Service: CS A
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organizations, both Argentine or U.
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available in Chapter 9: Contacts, M
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Agricultural Machinery, Equipment a
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Electric Power Systems Overview Ret
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Food Processing and Packaging Equip
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Information Technology Overview Ret
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Other market conditions will foster
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market. The market has been growing
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Mining Sector Specialist at the U.S
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significantly smaller than in the U
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A gradual recovery has taken place
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Best sales prospects for U.S. elect
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Travel and Tourism Services Overvie
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Telecommunications Equipment and Se
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Agricultural Sectors Return to top
Page 61 and 62: Food Ingredients Overview Return to
Page 63 and 64: Pioneer Argentina: www.pioneer.com/
Page 65 and 66: Average Tariff Rates by Type of Pro
Page 67 and 68: In 2006, there was a significant in
Page 69 and 70: 3/4/2008 Certain imported goods for
Page 71 and 72: Please note that VAT and Profits Ta
Page 73 and 74: 3/4/2008 Goods covered by Decree 73
Page 75 and 76: A fax of the commercial invoice may
Page 77 and 78: you through this process. You may a
Page 79 and 80: violate export control laws is foun
Page 81 and 82: Initial period: 1 year Extension: 1
Page 83 and 84: Article 6: - Importers, manufacture
Page 85 and 86: emanufactured) and certified by a "
Page 87 and 88: 3/4/2008 Normalizacion) --composed
Page 89 and 90: 3/4/2008 continuing shortage of ind
Page 91 and 92: 3/4/2008 Record No. S01:0116093/200
Page 93 and 94: 3/4/2008 Internet: www.anmat.gov.ar
Page 95 and 96: subject to the orders, guidelines o
Page 97 and 98: In January 2002, the government end
Page 99 and 100: The GOA has established a number of
Page 101 and 102: legality of this pesification decre
Page 103 and 104: deterrent penalties such as prison
Page 105 and 106: Law 17811 of 1968 regulates public
Page 107 and 108: A recent ACO investigation of GOA p
Page 109 and 110: Foreign-Trade Zones/Free Ports Retu
Page 111: Argentine Parliament (www.diputados
Page 115 and 116: Local bankers report that the major
Page 117 and 118: The International Bank for Reconstr
Page 119 and 120: total project costs for new venture
Page 121 and 122: Return to table of contents Chapter
Page 123 and 124: C1104AC) Buenos Aires, Argentina Ph
Page 125 and 126: Buenos Aires has a large number of
Page 127 and 128: Travelers should note that since Ar
Page 129 and 130: Internet: www.buyusa.gov/argentina/
Page 131 and 132: U.S. Department of Commerce Trade I
Page 133 and 134: (Argentine Chamber of Importers) Mr
Page 135 and 136: (Ministry of Federal Planning, Publ
Page 137 and 138: C1020AC Buenos Aires Switchboard: (
Page 139 and 140: 25 de Mayo 487, primer piso C1002AB
Page 141 and 142: C1036AAJ Buenos Aires Phone: (54-11
Page 143 and 144: Fax: (54-11) 4312-7184 E-mail: mdem
Page 145 and 146: E-mail: fargosi@fibertel.com.ar BAS
Page 147 and 148: Bolivar 332, Piso 6 C1088AAH Buenos
Page 149 and 150: Mr. Klaus Bertram, President 25 de
Page 151 and 152: EXOLGAN TERMINAL PORTUARIA S.A. Mr.
Page 153 and 154: C1006ACI Buenos Aires Phone: (54-11
Page 155 and 156: Fax: (54-11) 4131-3900 E-mail: info
Page 157 and 158: www.starwoodhotels.com/sheraton/pro
Page 159: Return to table of contents Chapter
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