Doing Business In Argentina

Policy Short-term Short/Medium Term Long-term
Operational
Expenses
After Sales Service
(Well-served
clientele)
3/4/2008
No No Yes (No, in cases of
large multinational
No/Yes (according
to % of revenue
companies
No/Yes Yes
The Civil and Commercial Codes govern principal-agent relations. No special legislation
has been enacted to regulate the cancellation of agency/distribution agreements,
although a company could incur additional costs associated with the cancellation of an
agency agreement under Argentine labor law.
The contract entered with agents/distributors should specify rights and responsibilities,
the exclusive or non-exclusive nature of the relationship, geographical scope, description
of the product or services included, and the compensation plan. Contracts do not
require a specific format and can be executed verbally. However, given the complexity of
the legal and commercial environment, contracts are generally negotiated in writing
through the exchange of reversal letters or via a basic instrument.
If the distributor is granted exclusive representation in an area, this right must be
explicitly noted. Areas may be assigned according to geography, sectors of activity
(public or private sectors), transaction volumes (large companies, retailers, etc.), and
transaction modes (cash segment, home sale, etc.)
The agent may become an employee when any of the following requirements is fulfilled:
When he/she sells in the name of his/her employer
When he/she sells at the prices and sales conditions established by the ones
he/she represents (terms of sale defined by principal)
When he/she receives a salary, travel allowances, fees, or any other kind of
compensation
When he/she usually and personally carries out his/her activity as a traveling
salesperson
When he/she renders his/her services within a determined geographic area
When the risk of his/her operations is levied on the employer.
In these cases, Law 11,544 of 1929, as amended, may regulate the agent. In particular,
Law 14,546 of 1958 extends Labor Law benefits to business agents.
The parties may not elect foreign laws to govern the agreement. If a contract is executed
abroad to avoid Argentine law, Argentine courts will not enforce it.
The Civil and Commercial Codes permit a principal to cancel an agency agreement at
his or her discretion. However, the terminating party may be liable for damages resulting
from a wrongful cancellation. All agreements, whether for a definite or indefinite term,
should include a notice of cancellation clause.
Labor laws similarly require the service of a cancellation notice sometime before the