Second Issue: Branch Offices and Subsidiaries.
This article serves as a complement to the first issue and the intention is
to provide a concise summary (the general aspects) of the documents to
be submitted for the establishment of foreign capitals in Argentina. On
this occasion, we will discuss the establishment of branches or
subsidiaries of a foreign company (hereinafter, Parent Company).
According to the purpose of the Parent Company, it is very likely that the
submission of different specific documents about its activity is required.
The documents required for all Parent Companies are listed below.
1. Legal Requirements
In Article XV, the Business Companies Act No. 19.550 (LSC), with its
amendments and additional provisions, (this is the link, in case you are
29999/25553/texact.htm ) states that the foreign companies seeking to set
up a branch office or any other type of permanent representative office in
the country for the regular realization of acts included in their corporate
purpose shall comply with the following conditions:
a. Prove its existence in the country of origin in accordance with its laws.
b. Fix a domicile in Argentina.
c. Publication in the Legal Publications Journal with the information
indicated in Section 10 of such regulatory document.
d. Justify the decision of creating the representative office.
e. Designate a natural person in charge of it.
f. Determine the allocated capital (only for branch offices).
The provision in point a. specifically refers to the Article of Association
(and its amendments) of the Parent Company and to the resolution of
setting up a branch office in Argentina adopted by the corporate
authorities of the Parent Company. This resolution shall include the
following requirements: indicate a domicile in Argentine territory,
designate one or various persons that will manage or represent the
branch office, and determine its allocated capital.
2. Necessary Documents
Without prejudice to the rest of the documents that may be required with
respect to each particular activity, every foreign company wishing to
establish a branch or subsidiary in the country must submit:
i) Power of the representative to carry out all the necessary acts for the
correct registration of the company. Although many international
companies usually grant very limited powers for security and trust
reasons, we recommend that the representative be empowered to
carry out all necessary procedures. This is because the lack of powers
to represent the Parent Company in a particular circumstance may
delay the procedure considerably.
Furthermore, to avoid having to produce two separate documents, it is
recommended to include the necessary powers in it in order for the
representative to carry out —through the branch— all acts that the
Parent Company wishes to perform in the country.
ii) Notary-certified copy of the Articles of Association of the Parent
Company and all its amendments (if any).
iii) Notary-certified copy of the justified resolution of the Parent
Company’s competent body which decides the establishment of a
representative office in Argentina, the designation of the company’s
representative in the country, the establishment of the domicile in the
country (we recommend that it be the office of its representative,
attorney and / or accountant, since the AFIP office where they will
have to go, the corresponding courts, etc., will depend on that
domicile), and the allocated capital (if applicable). We recommend
doing everything in the same resolution to avoid unproductive
paperwork. In addition, in this resolution the publication of legal notices
requested by the law should instruct the representative.
iv) Certificate issued by the entity responsible for regulating the legal
persons in the country of origin of the Parent Company (equivalent to
IGJ in Argentina), certifying its existence in accordance with the laws
of the Country of Incorporation, good standing, and capacity to
establish a representative office.
v) Last approved balance sheet of the Parent Company submitted to the
tax authority of its country of origin.
vi) Note with the force of an affidavit, containing a list of regulations
governing the Constitution, its operation and eventual dissolution
(Article of Association and its amendments).
vii) Note with the force of an affidavit, containing the list of regulations
governing in the country in which the documents appointing the agent
or attorney in fact have been registered, when they have been granted
in the Country of Incorporation of the entity.
All documents must be in Spanish. Moreover, they must be validated by
the Hague Apostille as a measure of international legalization for
companies from countries that have signed up to the treaty (in the rest of
the cases, special procedures must be carried out in the respective
Consulates). In the event that the documents signed by the Parent
Company are not in Spanish, the originals will have to be sent with the
Apostille; once in the country, they will have to be translated by a
registered Public Translator and the translation will have to be stamped in
the Sworn Translators Association.
Diego J. Nunes
Attorney at Law
Estudio Nunes & Asoc.