Buenos Aires Public Registry of Commerce enacts new regulatory framework: Top points

On July 16, 2024, the Public Registry of the City of Buenos Aires (Inspección General de Justicia, hereinafter IGJ), enacted General Resolution No. 15/24 (Resolution), which establishes a new regulatory framework and replaces General Resolution No. 7/15.

In particular, the Resolution significantly reduces regulation requirements for foreign companies, in an effort to streamlining the registration process.

According to the IGJ, the Resolution is an initial step toward immediate execution of Argentina’s Bases Law (Law No. 27,742: “Ley de Bases y Puntos de Partida para la Libertad de los Argentinos”), aimed at deregulation, simplification of procedures, removal of bureaucratic and discretionary obstacles, and enshrining the principle of entrepreneurial freedom.

In publishing the Resolution, the IGJ hopes to encourage local and foreign investments by simplifying filings and promoting the country's economy and social development. 
 
Effective date

General Resolution No. 15/24 will become effective on November 1, 2024, replacing General Resolution No. 7/15 and resolutions issued thereafter, with some exceptions.

The superseded regulations will remain applicable for already initiated proceedings, and will remain in force until their finalization, even if such finalization takes place after the effective date of the Resolution.

The release further contemplates the possibility for interested parties to request, in proceedings for registration in the Public Registry, the applicability of the Resolution’s provisions, if the companies deem them beneficial to their interests.

State control authorities’ role

The Resolution redefines the nature of the IGJ’s role, establishing that it will not only act as a registration and control authority of private legal entities, but also as an agent of “Economic Service of General Interest.” The release further establishes that the IGJ’s regulations must reflect the principles and purposes expressed in the Argentine Constitution, removing previously adopted regulations that produced an illegal and illegitimate incursion of the State within the scope of legal reserve and freedom of the citizens.

Procedure

The Resolution establishes the right for proceedings before the IGJ to be processed and concluded within a reasonable period of time. Such deadlines shall be mandatory for both the IGJ and interested parties, and the deadlines for requests for extensions, transfers, and appeals have been modified. 

Furthermore, the release establishes deadlines for the IGJ to issue an observation on proceedings in progress, as well as for the treatment of proceedings filed under the urgent modality. The latter change stipulates that those proceedings must be concluded within 72 hours, and, in the case of complex matters, they will be disregarded as urgent, the difference in fees will be reimbursed, and the proceedings will continue under the regular modality. 

Further, the Resolution establishes that, in proceedings before the IGJ, in case of doubt, the interpretation of a matter shall always favor the companies involved.

Foreign companies

The following modifications were introduced in favor of foreign investments:

• Elimination of the requirements 1) to evidence the ownership of assets abroad in order to register branches or participate in local companies, 2) that the company is not prohibited or restricted in the development of its activities, 3) that the center of management is outside Argentina, and 4) the individualization of shareholders
• Elimination of the prohibition to register “offshore” companies. Registration of offshore companies and those established, 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, is allowed, however, the IGJ will apply a restrictive criteria when analyzing the documentation submitted and may even require complementary information from the company before approving its registration
• Simplification of the rules for the relocation of companies incorporated abroad and registered in provincial jurisdictions to the Autonomous City of Buenos Aires
• Elimination of the Annual Information Regulations (RIA) both for companies incorporated abroad and registered under Section 118 as well as Section 123 of the Argentine Corporations Law (ACL)

Incorporation and operation of local companies

The following amendments were made related to the registration of local companies’ corporate actions:

• Simplified cancellation process for inactive companies
• Performance bonds required from the board of directors
• Capitalization of irrevocable capital contributions
• Capital contributions of virtual assets
• Control of plurality of shareholders
• Capital increases

Accounting formalities and requirements

The following changes related to records, documentation, and accounting were introduced:

• Simplification of the accounting requirements and information in the “extended board report,” making them applicable only to companies subject to permanent state control
• Significant extension of the regime related to disclosure of irrevocable contributions on account of future capital increases
• Maintenance of the requirement to treat the losses shown in the balance sheets, eliminating the priority order of the allocation of accounts for the coverage of losses and the obligation to allocate existing profits to specific purposes
• Simplification of the technical revaluations regime and allowance of the revaluation of biological assets
• For cases in which books are replaced by computers, or mechanical or magnetic means, establishment that the requirement to keep such documentation at the registered office refers to the “support on which the information is stored” (eg, pen drives) and not to the servers on which the information is processed
• Addition of the possibility of materializing accounting documentation kept by mechanical, magnetic, optical, or other means in files identified with a “hash”
• The information to be provided in the cases of authorization of mechanical, magnetic, or other means is simplified, eliminating biannual filing, although annual filing is maintained

Civil entities and foundations

The registration procedures for incorporation, development, dissolution, and liquidation of civil entity organizations are simplified, including:

• Simplified and free procedures for the incorporation of minor civil entities
• Dissolution and cancellation without liquidation of civil associations inactive for six years, through a simple procedure
• Incorporation of minor civil entities without the need for a public deed
• Removal of the requirement to submit additional documents regarding the list of authorities
• Simplification and flexibility of the registration of the termination of administrators
• Bylaw incorporation of models allowing the boards to meet remotely and by electronic means
• Simplification of the regime of summons, allowing summons by electronic mail
• Regulations to enable participation of civil entities and foundations in corporations
• Simplification of the registration regime for civil entities incorporated abroad

Associative contracts and trusts

The Resolution eliminates the requirement, for associative contracts and trusts, of filing financial statements before the IGJ, except in cases in which such obligation arises from a special law.

Simplified Corporations (SAS)

The simplified and deregulated regime for Simplified Corporations (SAS) established by means of General Resolutions IGJ No. 11/24 and No. 12/24 is preserved. However, in the latest resolution, the IGJ states that it aims for further deregulation and simplification of the regime and will soon issue a specific resolution on the matter.

Money laundering and financing of terrorism prevention 

Regarding the Policies and Procedures Manual for the Prevention of Money Laundering and Financing of Terrorism, approved by General Resolution IGJ No. 10/15, the IGJ informs by this Resolution that the same shall be updated through future resolutions, in order to comply with Law No. 27,739 provisions, the resolutions of the Financial Information Unit (UIF) and relevant recommendations.

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