New Public Registry of Commerce Regulation Applicable to Foreign Companies

In line with the deregulation plan the federal government initiated to facilitate commercial operations and encourage foreign investments, the Public Registry of Commerce in the City of Buenos Aires (IGJ) issued general Resolution 10/2024, published on March 27, 2024, repealing General Resolution IGJ 8/2021 and its Annex A. The Resolution substantially re-implemented the previous legal regime for foreign companies, although with some modifications.

Accordingly, it eliminated the restrictions under which:

• • The investment vehicle status could not be declared in a supervening manner.

 

• • The IGJ prohibited registering sole shareholder corporations (SAU) incorporated by a foreign sole shareholder corporation, whether or not incorporated as an investment vehicle.

 

• • The IGJ did not recognize the registration of companies incorporated abroad under the terms of articles 118 or 123 of Law 19550 in other jurisdictions of Argentina.

 

• • Foreign companies had to submit an investment plan to be registered before the IGJ.

 

Likewise, in line with the way in which businesses are structured worldwide, the Resolution recognizes the existence and legality of investment vehicles, eliminating certain restrictions that the IGJ had imposed through the repealed resolution, and by which it was not allowed to register:

 

1. more than one investment vehicle per economic group,
2. an investment vehicle if its direct or indirect parent company was registered in Argentina under the terms of article 118 or 123 of Law 19550,
3. investment vehicles with chain of control showing successive sole shareholder corporations.

The new Resolution allows registering “investment vehicles” of “off-shore” companies and companies incorporated in special jurisdictions and tax regimes, as well as foreign companies incorporated in special jurisdictions and tax regimes, although subject to a more strict scrutiny.

 

Regarding the abbreviated annual reporting regime:

 

• • Companies are no longer required to be up to date on their annual filings to comply with the rules under this abbreviated mechanism.

 

• • The abbreviated mechanism can be used alternatively in different annual periods  and for a maximum of five consecutive years.

 

• • The obligation to expressly state changes in the composition and ownership of the company’s corporate capital continues.

 

• • The IGJ’s express power to request an accounting certification of the company’s net worth is eliminated.

 

Finally, these changes represent a great advance in the impact that the legal regime has over the registration of the resolutions adopted by local companies in which they hold interests:

 

• • Foreign companies participating in the meeting are now only required to be registered for the purposes of articles 123 or 118, third paragraph, of Law 19550 only if their votes have been decisive—alone or jointly with those of other participants in the resolution—to make the corporate will.

 

• • It will no longer be necessary to attest or issue a legal opinion stating the compliance with the annual information regimes of foreign shareholders, or that the shareholders were represented by their registered representative or any appointed proxy.

 

General Resolution 10/2024 became effective the day after its publication. It applies to foreign companies registered in the City of Buenos Aires, both to those who have already filed for registration before the IGJ and those who will do so as from then.

 

This regulatory change clearly has a favorable impact. It will be necessary to analyze potential courses of action on a case-by-case basis. We invite you to contact us for further advice in this regard.