The Argentine Republic by the General Inspectorate of Justice. …” and that “off shore operations constitute a corporate practice that pursues illicit ends… the partners sought to conceal their personal wealth and defraud third parties“.
With this criterion, the IGJ classified the company under article 124 of the GCL, which refers to a foreign company with its main object in the Argentine Republic.
In their resolution, the judges of the Chamber of Appeals understood that: “The PRC does not have the power to prevent individuals from using the instruments they consider most appropriate for their economic planning… instruments that are widely accepted in the world…“. They further stated that: “this decision thus appears to be based solely on the aversion that the Agency has shown towards the transnational activities of companies, in a position that not only discourages genuine foreign investment, but also unjustifiably restricts the freedom that led to the greatness that our now suffering country has achieved“.
The resolution continues: “the PRC’s objection related to the appellant’s corporate purpose cannot be considered valid, since, regardless of any other consideration, this is a matter that is not governed by our regulations, but by the laws of the place of incorporation (section 118)” and that “it is sufficient to point out that the fact that the capital of the local company is less than the investment that the appellant will have to make to acquire the respective shares does not indicate any irregularity, since, obviously, these notions lack the relationship that, for these purposes, the IGJ seems to have assumed“.
This resolution brings some order to the complex landscape of the activities of foreign-incorporated companies in Argentina, particularly in the City of Buenos Aires.