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The Companies’ House sets forth new requirements and limits for the registration and acting of foreign companies

The Companies’ House (Inspección General de Justicia or “IGJ”) enacted General Resolution No. 8/2021, which was published in the Official Gazette on May 17, 2021, introducing changes in the registration and acting regime of foreign companies subject to its control. As a consequence of these changes:

(i) The condition of “special purpose vehicle” shall be declared for registration; once the company is registered no changes in such condition will be admitted.

(ii) The IGJ will only admit the registration of one “special purpose vehicle” per economic group.

(iii) The registration of “special purpose vehicles” will not be admitted if the direct or indirect controlling party is registered in the Argentine Republic under articles 118 or 123 of the General Companies Law (“GCL”).

(iv) The registration of “special purpose vehicles” controlled by single-member companies will not be admitted.

(v) The registration of single shareholder corporations (sociedades anónimas unipersonales) whose sole shareholder is a foreign single member company will not be admitted, regardless if it is a “special purpose vehicle” or not.

The resolution also foresees that foreign companies holding interests in Argentine companies domiciled in the City of Buenos Aires shall be registered with the Public Registry of the City of Buenos Aires (controlled by the IGJ), even if they are registered in other Argentine jurisdictions.

Additionally, it has been established that (a) for the registration of foreign companies under article 123 of the GCL it will be necessary to submit an investment plan indicating the list of companies in which the entity will participate and their eventual partners; and (b) if there is no final beneficial owner of the foreign entity, evidence that all the shares of the head office of the group are admitted to public offering, or that the ownership of the shares shows such a degree of dispersion that no individual owns 20% or more of its capital stock must be filed.

This regulation applies not only to companies that require their registration in the future, but also to those that are already registered with the Public Registry. Notwithstanding the diversity of cases that fall under the scope of this resolution, the IGJ has not set forth any timeframe for foreign companies to meet new regulations. For this reason, we understand that it is reasonable to expect that additional regulations will be issued.

It is likely that IGJ’s power to limit the registration with the Public Registry of foreign companies and to declare unenforceable registrations made in other jurisdictions will be challenged. Therefore, competent courts shall decide regarding the validity of this regulation.

For further information, do not hesitate to contact Patricio Martin, Florencia Pagani or Máximo J. Bomchil.