Doing Business In Argentina

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kind, the corporation can be established within approximately two months. The estimated total incorporation cost ranges from US$350 to US$850, including statutory books and excluding both professional fees and stamp tax (1 percent of capital). A minimum of two founders, whether legal or natural persons, is required. There is no maximum limit on the number of founders. The founders of a company must report a domicile in Argentina for related proceedings. A minimum of two shareholders is required. No maximum is prescribed. The minimum initial capital required is US$4,000, except for corporations engaged in banking, insurance or related activities. If the capital is supplied in cash, at least 25 percent must be paid at incorporation, with the remainder payable in two years. If in kind, it must be fully paid at incorporation. U.S. firms considering setting up operations in Argentina are encouraged to fully investigate the tax and legal aspects of establishing a business with legal counsel before making any final decisions. (A brief list of local English-speaking law firms is available in Chapter 9: Contacts, Market Research and Trade Events.) Franchising Return to top While franchising billings reached over US$4 billion in the year 2000, after five-years of growth, it fell by 20 percent by the end of 2001 and gradually started recovering in 2003. Currently, franchising represents a turnover of almost US$3 billion (or AR$9 billion). As a result of the recuperating economy, domestic franchises particularly have experienced growth, although at more moderate rate than in the 2006-2007 period. While revenues have increased in local currency terms, in dollar terms they are still below market levels obtained in the 1990s. At that time, the currency exchange was one Argentine peso to one U.S. dollar. During the last few years companies created different types of business partnerships, adjusted costs, and reduced the requirements to franchisees in order to adapt to real market demand and opportunities. For example, the franchising businesses that used to be rated in the medium-investment range were forced to reduce installation costs and fees. They are now rated in the medium-low to low investment range. Their reduced costs allowed several micro-entrepreneurial businesses to grow in an orderly fashion, starting with an investment as low as US$8,000. Another system that has emerged in past years is the franchise concept, which doesn’t involve a physical outlet, entrance fees or royalties, and are a starting point for ventures in sectors such as merchandising, souvenirs, decoration supplies, key-holders, and pins among others. Development of franchising in Argentina has been uneven and shows a high level of concentration: 10-15 chains handle 36 percent of the franchises and 50 percent of the total turnover. According to the Economist Intelligence Unit, there are approximately 410 franchise brands and more than 16,000 franchise points of sale. The percentage of local franchisers has grown considerably in the past decade, now accounting for 3/4/2008
approximately 87 percent of the total number of franchisers. U.S. companies make up about 6.1 percent of the total, and Spanish and Brazilian companies each account for about 1.9 percent of the total. The peso exchange rate disadvantage vis-à-vis the dollar and scarce credit render it increasingly difficult for potential Argentine franchisees to acquire international or U.S. franchises. However, each opportunity should be evaluated on a case-by-case basis. The most popular areas for international franchisers are fast foods, foreign language training, apparel, dry cleaning, hotels, and car rental services. Local franchises have been particularly successful in ice creams, "empanada" pastries, health clubs, and education. Significant U.S. market players include Kodak Express, McDonald's, Burger King, Blockbuster, Holiday Inn, FutureKids, and the Wall Street Institute. The recent entries of companies in services such as real estate (Re-Max) open roads for new market niches. Franchise contracts are generally protected under the Argentine Commercial Code as opposed to being governed by specific legislation. The scope of the service, commercial trade market/name, expertise, and shared production elements are covered by contractual obligations on both franchiser and franchisee. Elements of the contract include: the license, methods/systems or proprietary information transferred to a franchisee, the supply of needed inputs, methods of sales, and quality standards, and ultimate control by franchiser of the contract elements. Franchises have been successfully used in Argentina, but the obligations of the franchiser must be clearly delineated in the contract to avoid legal obligations associated with the operator, in case of default, bankruptcy, etc. Argentine law is unclear about franchiser obligations in case of bankruptcy or other commercial failings. Legal advice should be sought before signing contracts. Franchise contracts are generally protected under the Argentine Commercial Code as opposed to being governed by specific legislation. The scope of the service, commercial trade market/name, expertise, and shared production elements are covered by contractual obligations on both franchiser and franchisee. Elements of the contract include: the license, methods/systems or proprietary information transferred to a franchisee, the supply of needed inputs, methods of sales, and quality standards, and ultimate control by franchiser of the contract elements. Franchises have been successfully used in Argentina, but the obligations of the franchiser must be clearly delineated in the contract to avoid legal obligations associated with the operator, in case of default, bankruptcy, etc. Argentine law is unclear about franchiser obligations in case of bankruptcy or other commercial failings. Legal advice should be sought before signing contracts. Direct Marketing Return to top With the Argentine economy registering five consecutive years of growth and rising consumption levels, direct marketing methods have renewed opportunities for development. Telemarketing has been one of the quickest growing tools for businesses 3/4/2008
Page 1 and 2: Doing Business in Argentina: 2008 C
Page 3 and 4: 3/4/2008 Argentina’s banking syst
Page 5 and 6: 3/4/2008 The zero percent import du
Page 7 and 8: Return to table of contents Chapter
Page 9 and 10: Policy Short-term Short/Medium Term
Page 11: meetings. The service includes at l
Page 15 and 16: more limited and delivery is a grow
Page 17 and 18: Goods: Preference will be given to
Page 19 and 20: material, input, or material needed
Page 21 and 22: terminals at international airports
Page 23 and 24: As in many countries, personal rela
Page 25 and 26: "Clarin", "La Nacion", and "Ambito
Page 27 and 28: Av. de Mayo 605, Piso 3 C1084AAB Bu
Page 29 and 30: Business Facilitation Service: CS A
Page 31 and 32: organizations, both Argentine or U.
Page 33 and 34: available in Chapter 9: Contacts, M
Page 35 and 36: Agricultural Machinery, Equipment a
Page 37 and 38: Electric Power Systems Overview Ret
Page 39 and 40: Food Processing and Packaging Equip
Page 41 and 42: Information Technology Overview Ret
Page 43 and 44: Other market conditions will foster
Page 45 and 46: market. The market has been growing
Page 47 and 48: Mining Sector Specialist at the U.S
Page 49 and 50: significantly smaller than in the U
Page 51 and 52: A gradual recovery has taken place
Page 53 and 54: Best sales prospects for U.S. elect
Page 55 and 56: Travel and Tourism Services Overvie
Page 57 and 58: Telecommunications Equipment and Se
Page 59 and 60: Agricultural Sectors Return to top
Page 61 and 62: Food Ingredients Overview Return to
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Pioneer Argentina: www.pioneer.com/
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Average Tariff Rates by Type of Pro
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In 2006, there was a significant in
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3/4/2008 Certain imported goods for
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Please note that VAT and Profits Ta
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3/4/2008 Goods covered by Decree 73
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A fax of the commercial invoice may
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you through this process. You may a
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violate export control laws is foun
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Initial period: 1 year Extension: 1
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Article 6: - Importers, manufacture
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emanufactured) and certified by a "
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3/4/2008 Normalizacion) --composed
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3/4/2008 continuing shortage of ind
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3/4/2008 Record No. S01:0116093/200
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3/4/2008 Internet: www.anmat.gov.ar
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subject to the orders, guidelines o
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In January 2002, the government end
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The GOA has established a number of
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legality of this pesification decre
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deterrent penalties such as prison
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Law 17811 of 1968 regulates public
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A recent ACO investigation of GOA p
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Foreign-Trade Zones/Free Ports Retu
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Argentine Parliament (www.diputados
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Registry of Foreign Investments. Fo
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Local bankers report that the major
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The International Bank for Reconstr
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total project costs for new venture
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Return to table of contents Chapter
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C1104AC) Buenos Aires, Argentina Ph
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Buenos Aires has a large number of
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Travelers should note that since Ar
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Internet: www.buyusa.gov/argentina/
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U.S. Department of Commerce Trade I
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(Argentine Chamber of Importers) Mr
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(Ministry of Federal Planning, Publ
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C1020AC Buenos Aires Switchboard: (
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25 de Mayo 487, primer piso C1002AB
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C1036AAJ Buenos Aires Phone: (54-11
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Fax: (54-11) 4312-7184 E-mail: mdem
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E-mail: fargosi@fibertel.com.ar BAS
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Bolivar 332, Piso 6 C1088AAH Buenos
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Mr. Klaus Bertram, President 25 de
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EXOLGAN TERMINAL PORTUARIA S.A. Mr.
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C1006ACI Buenos Aires Phone: (54-11
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Fax: (54-11) 4131-3900 E-mail: info
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www.starwoodhotels.com/sheraton/pro
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Return to table of contents Chapter
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