On 17 May 2021, Resolution of the Inspectorate General of Justice (“IGJ”) No. 08/2021 (the “Resolution”) was published in the Official Gazette, which aims to regulate foreign companies registered, as well as those wishing to register in the future; modifying the regime applicable to companies incorporated abroad that apply for registration with the IGJ under the terms of Art. 118 or 123 of the General Companies Act (“LGS”).
The resolution provides:
i) The status of vehicle company must be declared at the time of its registration in the Argentine Republic. The status of conduit company is not admitted on a supervening basis;
ii) The registration of more than one vehicle companies per group is not allowed;
iii) The registration of vehicle companies is not allowed if their direct or indirect parent company is registered in Argentina under the terms of section 118 or 123 of the LGS;
iv) The registration of vehicle companies resulting from a chain of control between successive sole proprietorships is not allowed; and
v) The registration of sole proprietorships whose shareholder is only a company incorporated abroad as a sole proprietorship, whether or not it is a vehicle, is not allowed.
Companies incorporated abroad under the terms of sections 118 or 123 of the LGS in any jurisdiction in Argentina, which hold equity interests in a company domiciled in the City of Buenos Aires, must be registered under the same terms before the IGJ.
For the purposes of the registration of companies registered under the terms of section 123 of the LGS, an investment plan, signed by the legal representative of the company or by the appointed representative in Argentina, must be submitted, in which the following must be indicated: (i) in which companies they will participate; (ii) the activities they carry out abroad and the activities carried out in Argentina by the local companies in which they will participate; (iii) details of the remaining shareholders of the local companies of which they will be shareholders; and, (iv) the number of shares they intend to acquire.
In the absence of a beneficial owner, it must be proven by documentation: (i) that the parent company of the group has all its shares admitted to public offering or (ii) that the ownership of the shares is so dispersed among the persons holding the share capital that none of them reaches the minimum percentage of ownership contemplated in section 510, subsection 6 of General Resolution (IGJ) No. 7/2015.
The Resolution entered into force on 17 May 2021 and will apply to ongoing proceedings pending registration with the IGJ.