Agreement to Facilitate Business Activities in the Mercosur

Law No 26,105 (published July 3, 2006) approved the Agreement to Facilitate Business Activities in the Mercosur (the “Agreement”), signed in Belo Horizonte, on December 16, 2004. According to the Agreement, Argentina, Brazil, Paraguay and Uruguay decided to allow business persons residing in those countries to settle in any of those jurisdictions, for the exercise of their activities, without other restrictions than those applicable to activities exercised by business persons of the respective country, through granting a temporary or permanent residence visa issued by the consular authority.

The Agreement foresees that activities considered as of business nature are: investor, member of board of directors or manager in enterprises of services, commerce or industry sectors.

In order to be included under the scope of the Agreement and be held under the mentioned categories, businesspersons of the signing countries should fulfill the following requirements: a) certificate of good standing of the enterprise issued by the authority of the state of origin, stating the existence of the enterprises of which the person is owner or part; b) commercial and bank references; c) in case of investors, a minimum amount of US$ 30,000 will be required, proved by transferences through official banks, under the competent authorities in a two year term.

Among the permitted activities under the scope of the mentioned visa are the following: a) any kind of bank operations permitted to the nationals of the receptive country; b) directing and managing enterprises, either owned or not by the businessperson; and any activities related with the acquisition, disposition, management, production, and financial and commercial, among others, in accordance to the company’s bylaws; c) representing the company; d) foreign trade operations; e) signing financial statements with a Public Accountant.

The Agreement will enter into force 30 days after being ratified by two States. For the further signing States it will enter into force 30 days after the deposit of its own ratification instrument. Although no country has deposited its ratification instrument yet, Argentina is the only country that has incorporated the Agreement to its national legislation.

Argentina and Brazil have already signed a bilateral agreement on Facilitation of Business Activities, signed in Brasilia on February, 15 1996 which is in force.  With the entrance into force of the Agreement, the scope of the facilities previously accorded between Argentina and Brazil will be broader, and the minimum amount of investments previously required of US$ 50,000, will be lowered.