On May 17, 2021, the Superintendence of Corporations (“Superintendence”) published General Resolution No. 8/2021 (“RG IGJ 8/21”) which establishes limitations in reference to foreign companies registered or applying for registration pursuant to Section 118 and 123 of the General Corporations Law No. 19,550 (“GCL”), especially in relation to special purpose vehicles (“SPVS”), which are basically companies incorporated abroad for the purpose of holding shares of local companies.

Following the restrictive criterion that the IGJ had already set out in Resolutions No. 530/2020 (“SFSC”) and 33/2021 (“MERCADOPAGO”), RG IGJ 8/21 provides that:

  1. the status as SPV of the entity must be declared at the time of its registration in the Argentine Republic (and not afterwards).
  2. the registration of more than one vehicle company per group is not allowed.
  3. the registration of SPVs will not be allowed if their direct or indirect controlling company is registered in the Argentine Republic pursuant to Sections 118 or 123 of the GCL.
  4. the registration of SPVs resulting from a chain of control between successive sole proprietorships will not be admitted.
  5. the registration of sole proprietorships whose shareholder is only a company incorporated abroad as sole proprietor, whether it is a vehicle or not, will not be allowed.

Likewise, and with special practical consequences on the activity of Argentine companies owned by foreign companies, RG IGJ 8/21 establishes that companies incorporated abroad that have a principal shareholding stake in local companies with headquarters in the City of Buenos Aires must be registered with the Superintendence. Registrations in other jurisdictions of the Argentine Republic will not be enforceable in such case.

The new regulation also requires that for the purposes of the registration of a foreign company under the terms of section 123 GCL, an investment plan must be submitted along with the list of companies in which it intends to participate or incorporate in the Argentine Republic.

In case the foreign company states that there is no ultimate beneficial owner, documentary evidence must be provided to show that: a) the head of the group company has all of its shares admitted to public offering; or, b) the ownership of the shares is so dispersed among the persons holding the capital stock that none of them holds the minimum percentage of shares (currently 20%).

RG IGJ 8/2021 abolished sections 212, 217, 219, 222, 239, 240 and 249 and amended sections 215, 218, 245, 255 and 256 of the General Resolution No. 7/2015 (“RG IGJ 7/15”) to reflect the aforementioned changes. These amendments entail that the Superintendence will not register companies incorporated abroad that:

  1. lack the capacity and legal standing to act in the place of their incorporation.
  2. are incorporated, registered or incorporated in countries, domains, jurisdictions, territories, associated states and special tax regimes, considered non-cooperative for tax transparency purposes and/or categorized as non-cooperative in the fight against Money Laundering and Financing of Terrorism, or of low or nil taxation, according to the criteria of the Central Bank of the Republic of Argentina, of the Financial Investigation Unit, of the Ministry of Justice and Human Rights or of organizations governed by international public law standards, such as the United Nations, the Organization of American States, the Financial Action Task Force (FATF), OECD, or, which in the reasonable opinion of the Superintendence, do not meet such standards.

Finally, as a result of the amendment to section 255 of RG IGJ 7/15, the abbreviated annual information regime of foreign companies may only be filed for a maximum of one (1) consecutive financial year.

RG IGJ 8/2021 came into force on the same day of its publication, May 17, 2021.

For further information, please do not hesitate to contact Juan Pablo Bove, Federico Otero, Julián Razumny, Pablo Tarantino, Agustín Griffi, or corporateteam@trsym.com.