Foreign Companies: Simplified Procedures Come into Effect in Public Registry of Commerce

On August 28, 2018 the Public Registry of Commerce (the “IGJ” after its acronym in Spanish) issued Resolution 6/18 (“Res. 6/18”), which was published in the Official Gazette on August 29, 2018.

Res. 6/18 introduces substantial amendments to Resolution 7/15 (see Marval News N° 153 and Marval News N° 155) in connection with foreign companies.

The issuance of Res. 6/18 is in line with the aim of the Argentine Government to simplify and expedite procedures in public administration, thus facilitating the operation, financing and productivity of companies and providing companies with better access to the services rendered by the government.

Effectiveness and application

Res. 6/18 will come into effect on August 30, 2018.

Res. 6/18 applies to all filings to be made as from August 30, 2018 as well as to any filings already made that are pending at the date of entry into force of Res. 6/18.

Main changes:

1) Initial filing:

• Res. 6/18 eliminates the requirement to provide evidence that the main activity of the foreign company is developed outside Argentina and of the identity of shareholders when the initial filing is made by foreign companies with the IGJ (under sections 118 and 123 of the Argentine Company Law, the “ACL”) and the restriction for registration of offshore companies.
• However, the IGJ reserves the authority to require documents evidencing the existence of assets and the identity of shareholders in the case of foreign companies incorporated in countries, domains, jurisdictions, territories, associated states and special tax regimes considered as non-cooperative from a tax transparency perspective or non-cooperative in the fight against money laundering and terrorism financing.

2) Annual filing requirement: The requirement to make this filing is eliminated.

3) Proxy: The restriction imposed by former rules which provided that foreign companies could act in connection with corporate actions subject to registration solely through their registered representative or an attorney-in-fact appointed by same is eliminated. Pursuant to the amendment, both the registered representative and an attorney-in-fact appointed by the parent company may act on behalf of foreign companies.

4) Isolated acts: all provisions referred to isolated acts are eliminated.

5) De-registration due to inactivity of the branch: Res. 6/18 eliminates the requirement which established that for the branch to be de-registered due to inactivity it should have been registered for a term not exceeding five years. Therefore, any branch may apply for de-registration by providing evidence of inactivity and fulfilling the requirements of the regulation.

6) Foreign companies domiciled, or with their main activity in Argentina: The assessment factors for determining applicability of section 124 of the ACL are eliminated. The procedure for nationalization of companies remains effective.