Set up a Subsidiary in Argentina
Updated on Monday 22nd January 2018
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Foreign corporations often choose to do business here by setting up a subsidiary in Argentina, which is a separately incorporated legal entity. The advantage of such a business establishment is that it only places at risk its locally assigned capital rather than the entire capital of the parent company, as it is in case of a branch.
In this article, our company formation advisors in Argentina analyze different aspects related to opening a subsidiary in this country.
Forms of subsidiaries in Argentina
Foreign companies who intend to establish a subsidiary in Argentina usually choose to set up either a corporation (sociedad anonima with only one or more shareholders) or a limited liability company (sociedad de responsabilidad limitata with two or more partners).
The main benefits of a subsidiary in Argentina are:
• The partners’ liability is limited to the capital they contributed;
• A corporation can offer its shares publicly in order to attract financing.
Even though there are certain differences between a corporation and a limited liability company in Argentina, they do have certain traits in common, such as:
• There are no nationality or residence requirements for the partners. Except for certain regulated activities, foreign entrepreneurs and non-residents can entirely own any company opened in the country;
• Most of the administrators of the companies have to reside in Argentina;
• Both legal entities should have a capital allocation;
• Other common features: our company registration consultants in Argentina can offer more details on what these common features consist of. We also provide assistance in setting up a company in Argentina.
The income taxation for subsidiaries in Argentina
The basic taxation for subsidiaries in Argentina is set at 35%, according to the Income Tax Law. The remittance of profits to the parent company and the dividends paid to foreign shareholders are not subject to taxation.
The taxable income of a subsidiary here is established by deducting all allowable expenses from the legal entity’s gross income. Our Argentina company formation agents can provide further details on this matter.
The expenses registered abroad can also be deducted, if the taxpayer can prove that they were incurred for the goal of generating taxable income in the country.
In case you have more questions about subsidiaries in Argentina, or for help to open a company in Argentina, we invite you to get in touch with our friendly staff.