Author Archives: Elias Kier Joffe

Probate Lawyer Argentina & Probate Attorney Buenos Aires

Probate Lawyer Argentina & Probate Attorney Buenos Aires

Claiming succession is not usually as easy as it sounds. A lot is involved in ensuring your path to claiming an estate or succession is as smooth as possible. If you’ve been searching for a probate lawyer Argentina or in need of a probate attorney Buenos Aires, you’ve come to the last bus stop!

In case you’re wondering, what’s this probate lawyer Argentina going to do? What role is my probate attorney Buenos Aires going to play in my succession claim? Here is a brief on what to expect from your lawyer.

Gathering of all required documents that will facilitate a succession proceeding, from financial statements to ownership certificates and of course birth certificates. Your probate lawyer will guide you in ensuring none is missed. Your lawyer will look at the domicile of the decedent to determine where your succession claim will be heard. The important location is the decedent’s last place of abode before death and not necessarily where his properties and estate is located.

Depending on the circumstances surrounding decedent’s death and if there was a valid written will or not, your lawyer can conclude whether your succession is testate (with a valid written or oral will) or intestate (without a valid will, also includes invalid written will). Where there is a will, your probate attorney Buenos Aires will help you determine whether the will is holographic or notarial.

Once requisite documents have been gathered, your probate attorney will then file the succession petition in court, estate notices in the Official Gazette, ruling acknowledging legal heirs and other needed procedures to bring success to your claim. Estate notices are required to be filed to eliminate any untitled claims.

Limiting your overall expenses by making sure due process is followed. Especially as most people assume they do not need to initiate succession proceedings where there is a valid will involved. They may get to realize this mistake late, after lots of unnecessary expenses have been made.

Peruse the will to be sure it is consistent with laws governing estate, probate and succession. For instance, children are entitled to 4/5 of the decedent’s estate, parents 2/3 while spouse is 1/2. While they can inherit more than this quota, less than it is not allowed in law. This mandatory quota is known as the legitime portion of the estate of the decedent.

Advice you on your options where other beneficiaries are opposed to initiating succession proceedings. According to law, you have the option to singly initiate the proceedings and cause processes to be served on beneficiaries not in agreement.

A probate lawyer Argentina is needed not only during initiation of succession claims, but also before death of the decedent. The lawyer will review your written will and advice on terms to include so rightful heirs are not excluded. You can write as many wills and revoke them too, but the last written one before death will be the valid one.

Your probate lawyer will discuss upfront what to expect in fees and thus save you higher expenses which can be recovered in court after the proceedings. So it’s important you reach a mutual agreement before retaining your lawyer.

After the judge has passed a ruling acknowledging the heirs of the estate, the probate document is then registered by your lawyer which then gives you the right to either sell via the Fast Track system or personal management.

Our expert and dedicated team at Kier Joffe Firm are waiting to meet your estate, probate and succession needs with the most effective legal solution. Our reach includes both local and international assets. If you’ve got more questions, we’re just a call away!

ARGENTINA SUCCESSION PROCEEDINGS

ARGENTINA SUCCESSION PROCEEDINGS

Succession refers to the body of law pertaining to the distribution of a person’s assets after they have died. Based on the property type, the property value, the debts of the decedent and some other factors, the process may be very easy or complicated.

Types of succession in Argentina

1. Intestate succession (without a will), which represents a majority of cases; and
2. Testamentary succession (with a will)

A judicial succession proceeding is how the law sees the transfer of immovable assets i.e. real estate, permits the transfer of bank accounts and stocks and bonds or any assets that are documented in the name of the deceased person , and arranges for the payment of the debts of the decedent. If a person dies without having any of those properties, and without any significant debt, it may be unnecessary to open his succession.

Among the most frequent questions people ask is how long it will take to complete a succession proceeding in the City of Buenos Aires or Province of Buenos Aires. The answer is dependent upon:
• Whether the documents (vehicles ownership certificates, death certificates, birth certificates, real property title deeds (departments, houses, motorcycles, vessels, motor vehicles, securities and shares, bank statements ) needed to start the succession is available;
• The court wherein the succession is to be settled, which depends on the jurisdiction corresponding to the last domicile of the decedent;
• The number of heirs and their willingness to speed up the process by signing all the documents needed and collaborating in moving the judicial process forward; and
• Whether there is any conflict among heirs, in which case, such conflicts must first be solved through the help of a probate lawyer Argentina to continue with the succession proceedings as laid out by the legislation in force.
Generally, a succession proceeding takes at least 5 months to acknowledge the legal heirs for an intestate succession to be issued , depending on the jurisdiction ( City or Province of Buenos Aires with their diverse Judicial Departments).
Furthermore, succession expenses are incurred per stage. It may involve the issuance of certificates showing family bonds between the decedent and their heirs, the form utilized to apply for proceedings connected with the whole estate of the demised, the compulsory social security levy of the probate attorney Buenos Aires (lex provisional), court fees, and succession notices.
It is therefore, important to note that the completion of all procedural terms and stages (i.e. filing of the petition for succession, publication of estate notices in the Authorized Gazette, rulings confirming the lawful heirs to an intestate succession, distribution and enrolment of the properties the estate of the decedent) is the leading principle of any succession proceeding.
If when the succession is completed, the heirs have finally made up their mind to sell the assets, the ruling confirming the genuine heirs to an intestate succession has to be registered via fast tracking i.e. In one act before a probate attorney Buenos Aires, assets are then transferred from the decedent ) to heirs and from heirs to buyer. For such reasons, a probate lawyer Argentina must demand that the registration be made through fast tracking, and give the name, domicile and a contact number of the acting probate attorney Buenos Aires, who will be certified to take the succession records for several days to set up the fast tracking title act. In pursuant to the relevant legislation, counsel’s charges in the City of Buenos Aires vary from 11% to 20% of the exact asset value, less than 25%.
In the Province of Buenos Aires, they vary from 7% to 25% of the assets’ tax assessment which is near the real value. As the amounts to be permitted for counsel’s charges in a succession proceeding may be somewhat high, you need to enter into a fee’s agreement with your probate lawyer Argentina before starting the proceedings otherwise, they may request the courts to fix the counsel’s charges, which may be higher compared to those you would have agreed by mutual consent.
A probate lawyer Argentina can provide you the most effective legal solution for succession cases of diverse nature, and can handle both simple and complex registrations involving assets in the national territory and abroad. For more details on succession proceedings, please contact Kier Joffe Attorneys at Law, Buenos Aires, Argentina.

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We understand how daunting it can be to choose a lawyer in Argentina from another country. Please feel free to contact us with any questions, or to discuss retaining our legal services.
We offer a free initial consultation on your legal matter, with full protection of attorney-client confidentiality, as required by Act number 23,187 section (6) subsection (f).

“Give us a call today, or just fill out the Quick Contact Form , and we will get back to you.”

USA: +(1) 212.300.6377
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Elias Kier Joffe
Managing Partner

REAL ESTATE: House Hunting in Buenos Aires, Argentina

Horacio Paone for The New York Times

Molecule House, a villa in a gated community outside Buenos Aires, is on the market for $1.35 million.

http://www.nytimes.com/2013/05/16/greathomesanddestinations/real-estate-in-argentina.html
By NINA ROBERTS

A THREE-BEDROOM HOUSE WITH A POOL OUTSIDE BUENOS AIRES

This rectangular building, known as Molecule House for the system of interlocking aluminum rods and connectors that makes up its foundation, has 3,229 square feet of space over two floors. Its signature modular geometric structures also act as a decorative feature throughout the house — in ceilings, along windows, even as table legs and balusters. It is being sold furnished.

The central living room has a double-height ceiling and two glass-paneled walls; like most of the house the floor is in a reclaimed wood called Incienso, with a heating system underneath. It is flanked on one side by the dining room, on the other by the kitchen, which has two freestanding counters topped with thick slabs of reclaimed pine. Appliances, among them an Ariston oven and stove, are stainless steel.

Upstairs, the master suite has an air-conditioned bedroom, a white-tiled bath with a skylight and a walk-in closet. On the other side of the house, at the far end of an open walkway, are two bedrooms and a shared bath.

The property of almost 11,000 square feet is landscaped with palm and silk floss trees, flowering shrubs and a collection of cacti. A wooden deck leads back to the pool; a small geodesic dome provides a sculptural element.

Molecule House is in La Celina, a gated community of 70 homes on large lots. Polo fields are within 15 minutes’ drive; Buenos Aires is about 45 minutes away.

MARKET OVERVIEW

The market in Buenos Aires, which traditionally uses American dollars, is stagnant, in part because the government recently restricted real estate transactions in foreign currencies. Wary of the Argentine peso with its history of high inflation and depreciation, many sellers are holding back.

Emiliano Pagnotta, an Argentine economist who teaches at New York University, described the market as “essentially collapsing.”

“The number of sales in the main market, Buenos Aires, are down 40 to 50 percent compared to the previous year, which was not a great year to start with,” he said.

But according to Martin Bricca, a managing partner of Buenos Aires Habitat, it’s a good time to buy. Those who are selling, he said, are not averse to negotiation. “Three years ago, if you offered 30 percent less than the asking price, the owners would say no,” he said. Sellers today often accept offers 15 to 20 percent under asking price.

WHO BUYS IN THE BUENOS AIRES AREA

Most foreign buyers in the Buenos Aires area are from North America and Western Europe, typically Britain, Italy and France.

BUYING BASICS

There are no restrictions on foreign buyers, but financing must be obtained at home, as Argentine banks generally don’t provide mortgages. Elias Kier Joffe, the managing partner of the Buenos Aires Law Firm Kier Joffe, described real estate transactions as straightforward, explaining that Argentines typically rely on notaries public and don’t hire lawyers.

But given the recent restrictions on foreign currency, Mr. Joffe strongly suggested that foreign buyers hire a lawyer, even before contacting an agent for a property search. The lawyer, notary and closing costs together make up about 3 percent of the sale price, he said.

Foreign buyers usually wire their payments into the bank accounts that many sellers maintain abroad. The payment method must be stated in the purchase agreement and the account declared to Argentina’s Federal Administration of Public Revenue.

WEB SITES

City of Buenos Aires tourism: bue.gov.ar

Buenos Aires Province tourism: buenosaires.tur.ar

Buenos Aires Province portal: gba.gov.ar

LANGUAGES AND CURRENCY

Spanish; Argentine peso (1 peso = $0.19)

TAXES AND FEES

The broker fee is 4 percent of the sale price; additionally, a transfer tax of 3.6 percent is typically split between buyer and seller. Property tax is $1,200 a year, maintenance $400 a month.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

www.kierjoffe.com

 

Division of Marital Property Under the New Argentinian Civil and Commercial Code

NEW CIVIL AND COMMERCIAL CODE OF ARGENTINA

Division of property under the new Code

As a result of all questions and doubts that have arisen from the enactment of the “new Code” (Civil and Commercial Code of Argentina, CCCN in Spanish), which came into force on August 1 this year, we will explain the effects of “Termination of the Community Property System”, mainly what we need to know when a couple decides to divorce, when one of the spouses dies, or when they decide to opt for a different property system and need to divide assets after the dissolution of marriage.

Nowadays the law allows us to choose the way in which we want to “administer” our matrimonial property so that couples can select what property system will govern their marriages by executing a marriage settlement.

Section 446 of the new Code expressly contemplates “Marriage Settlements” and provides that “before the celebration of marriage, prospective spouses may enter into settlements only for the following purposes: a) to designate and valuate the assets that each spouse brings into the marriage; b) to list debts; c) to list donations made to each other; d) to opt for any of the property systems provided under this Code.”

Although the Code provides that prospective spouses may sign marriage settlements, it also limits the scope of said settlements. As opposed to what most people imagine, the law stipulates a strict framework of what terms the parties may agree on. Outside this legal framework, spouses cannot dispose of property in any way. If they do so, the law states that such disposition will have no effect.

The principal amendment relates to the fact that now spouses can opt for a system of division of property, under which they keep the right to freely administer or dispose of their premarital property.

At this stage we may conclude that the most significant change not only relates to the possibility of choosing one system or another, but also to the right to agree to change it, whether choosing between the division of property system or the community property system. For this to be possible, two requirements must be met. First, spouses must have kept the adopted system for a period of at least one year. Second, the settlement must be made by a notarially recorded instrument. However, if the parties are silent, that is, in case spouses do not make any marriage settlement or do not agree on any property system in the settlement, the community property system will apply by operation of law, as the situation was before the new Code.

“In my view, the Commission correctly chose not to do what Italy implemented after the Code of 1942, when it changed the system in force at that time thus generating a strong opposition from the society, who was not accustomed. Here we thought that the same thing could happen. That’s why the community property system was chosen as a legal and suppletory system “, explained attorney Pedro Di Tella during a seminar held at University of Buenos Aires Law School (UBA).

Another relevant issue to point out is that spouses who got married before the new Code came into force have the right to change systems, as long as they meet the statutory requirements: time in the system (one year) and written settlement made by a notarially recorded instrument. Such change of system does not require any leave or acknowledgement from a court.

So far this is what the parties may “choose”. Nonetheless it is important to highlight, as we have mentioned before, that the freedom of choice is restricted by what is called Régimen Primario (Primary System) based on mandatory and unalterable rules which apply whatever system the parties may have adopted, and on the principle of joint and several liability, family responsibility, and protection of family and other persons. Consequently, any agreement to the contrary will be of no effect.

What we need to know is that despite the amendments made by the new Code and the property system adopted, in every marriage spouses must comply with the following:
– neither spouse may dispose of the matrimonial home, nor of moveable property and property used for work without the other spouse’s consent.
– they must contribute to support themselves, the home and their children in common, in proportion to their resources. If one of them fails to do so, he or she could be sued in court.
– they are jointly and severally liable for the obligations assumed by each of them to meet family common necessities and children’s maintenance and education.
Apart from these cases and except as otherwise provided by the marriage system law, none of the spouses is liable for the other’s obligations. Not only prospective spouses may choose a property system, but they may also specify in the settlements what assets they bring into the marriage, which debts are still due, and what donations they have made to each other.

To sum up, it is important to realize that all these amendments have not been made in a capricious way, just because a substantive reform of the code was needed. The reform of the Code represents and consolidates the solutions provided by case law and legal authors to the social and cultural changes of the last decades as a result of the absence of express rules.

Best Argentina Divorce Lawyer|Buenos Aires Top Divorce Lawyer|Expert Argentinian Family Law

Argentina Divorce Lawyer|Buenos Aires Divorce Lawyer|Argentinian Family Law Firm

Doing Business Buenos Aires, Argentina – Guide – Foreign Investments – Lawyer – Law Firm

Doing Business Buenos Aires, Argentina

Factors to be considered in order to set up a foreign company in Argentina

Foreign companies can operate in Argentina by registering with the Public Registry of Commerce (Registro Público de Comercio), as a branch or a subsidiary.

Subsidiaries are created by setting up a business company. The commonest types are the Corporation (known as Sociedad Anónima or S.A.) and the Limited Liability Company (known as Sociedad de Responsabilidad Limitada or SRL).

Both, branches and subsidiaries, are subject to the same tax regime.

The following are the main characteristics and dissimilarities between the different possibilities:

Doing Business in Buenos Aires, Argentina: A. Branch

In Argentina, the Argentine Companies’ Law (LSC, Ley de Sociedades Comerciales), considers that a branch (the “Branch”) is a decentralization of the company’s headquarters (the “Headquarters” or the “Company”). The Branch is governed by the laws of the country of origin of the Headquarters, and thus, it is authorized to perform all the acts that are permitted to the Headquarters. As a result of the relationship established between the Headquarters and the Branch, the former is indirectly responsible for the transactions carried out by the Branch.

Even though the Branch has no limitations to have its own assets, it is not obliged to have a specific capital stock. However, it must keep separate accounts from the Headquarters and submit its Financial Statements every year before the Public Registry of Commerce (the PRC) of the City of Buenos Aires.

The transactions of the Branch do not generate much administrative control, as long as there are no meetings of the partners, shareholders or board of directors and it is not necessary to keep a record of the minutes, either. However, the Branch must take the necessary administrative measures, such as the registration with the PRC and with the social security entities and tax authorities. Likewise, every year when the Branch submits the Financial Statements, it must inform the PRC about any change that might occur pursuant to what is set forth in item 4.(v) described as follows.

In order to register a Branch in the Argentine Republic, the headquarters must fulfill the following requirements before the PRC:

  • 1. Certificate of good standing issued by the Secretary of State or the relevant public office certifying that the company is duly authorized or incorporated and in good standing pursuant to the laws of its country of origin. This certificate must also state that such company is under no liquidation or any other kind of legal proceedings that result in restrictions imposed on its assets and/or activities.
  • 2. Copy of the company’s bylaws or articles of incorporation, including any amendments thereto.
  • 3. Copy of the resolution by the headquarters’ competent body, through which the following decisions are stated:
    • (a) to set up a branch in Argentina;
    • (b) to appoint a legal representative in Argentina (the legal representative may or may not have a domicile in Argentina);
    • (c) to establish a legal domicile in Argentina.

4. Statement subscribed by the legal representative in Argentina, through which he:

  • (a) accepts his appointment as the legal representative;
  • (b) states his personal data;
  • (c) establishes a legal domicile in Argentina.

5. Statement subscribed by a headquarters’ representative with sufficient power, providing evidence:

  • (a) that the development of the Company’s activities or its main activity or activities is not prohibited or legally restricted in its place of origin.
  • (b) that the company complies with any of the following conditions outside the Argentine Republic: (i) of the existence of one or more branches or permanent agencies in good standing; (ii) the ownership of fixed non current assets or exploitation rights on third parties’ assets of the same kind; (iii) interest ownership in any other company in the form of non current assets, in accordance with the definitions set forth in the Generally Accepted Accounting Principles (GAAP).
  • (c) of the company’s shareholders / partners, indicating: (i) name and surname or business name of the shareholder; (ii) domicile or registered office; (iii) corresponding number of passport or ID, or else, the data of registration, authorization or incorporation; (iv) amount of shares, votes and ownership percentage of each shareholder.

Please note that all the documents to be submitted before the PRC must be duly certified and legalized by a consulate or the Apostille (Convention de La Haye 1961).

Doing Business in Buenos Aires, Argentina: B. Subsidiary

A subsidiary is a separate entity, independent from the headquarters (the “Subsidiary”). It has its own duties and obligations, a capital stock and its own administrative and management body.

The subsidiary is liable to third parties with its own assets, and thus, the headquarters is not responsible for the operations carried out by the subsidiary. However, this protection has been recently questioned by some local courts.

In order to set up a subsidiary, a foreign company must be registered in Argentina pursuant to what is set forth in section 123 of the Argentine Companies’ Law (“LSC”), and this is only with the aim to participate as a shareholder or partner in a local company, regardless of whether it is a Corporation (“SA”) or a Limited Liability Company (“SRL”). The procedure to register a foreign company for these purposes is similar to the procedure applicable to a Branch, pursuant to what has been previously set forth in item A.4.

Requirements for the registration of foreign shareholders, in order to set up or participate in Business Companies in the Argentine Republic:

First, in order to set up a company, the foreign shareholder must register with the PRC pursuant to what is set forth in section 123 of the Argentine Companies’ Law (“LSC”) in order to participate as a shareholder of the local company. In that sense, the shareholder must submit the following documents before such registry:

  • 1. Certificate of good standing of the company in its place of origin, giving due evidence of the existence of the company in this place;
  • 2. The company’s contract or articles of incorporation and any amendments thereto;
  • 3. Copy of the resolution adopted by the company in order to
    • (i) register the company in the Argentine Republic in order to participate as a shareholder of a local company;
    • (ii) appoint the company’s legal representative in the Argentine Republic;
    • (iii) establish a legal domicile in the Argentine Republic

Written statement subscribed by the company’s representative (i) accepting the position for which he was appointed; (ii) stating his personal data; and (iii) establishing a special domicile in the Argentine Republic;

4. Documentation subscribed a company’s officer indicating that the company has the following outside the Argentine Republic (i) one or more agencies, branches or representations in good standing; or (ii) fixed non current assets or exploitation rights on third parties’ assets of the same kind; or (iii) interests in other companies that are not subject to public offer; or (iv) investment operations in stock exchanges or markets. (Said information may also be proven by submitting the financial statements approved by the company, corresponding to the last closed fiscal year);

5. Statement subscribed by one of the company’s officer individualizing its composition and the ownership of its capital stock.

The documentation must be sent with the due certification before a notary public and the authentication by the Argentine Consulate of the place that granted it, or by the Hague Apostille, as it may correspond.

Finally, if there is not enough time for the registration of the company’s shareholder, it is possible to register other provisional shareholders, who shall transfer their shares to the company 123 of the Argentine Companies’ Law (LSC, Ley de Sociedades Comerciales), shall transfer their shares to them.

How is a commercial partnership or corporation established?

Companies may be established by a written public or private instrument (section 4 of the Argentine Companies’ Law (LSC, Ley de Sociedades Comerciales). . The instrument of organization is an agreement. The instrument of organization is an agreement In case of a corporation it is called Bylaws.

If you are planning to set up a company or do businesses in Argentina, please click on how to invest, and you will find the main characteristics of the legal regime in force regarding the different aspects to be taken into the account at the moment of investing in this city.

Distribution of dividends and repatriation of capital from a local company to its headquarters

The following is a brief description of the general principles applicable to the distribution of dividends of local companies and the repatriation of capital from a branch to its headquarters, according to the Argentine legislation.

1. Distribution of dividends in a local company with foreign shareholders

1.1. Law 19,550 and its amendments – The Argentine Companies’ Law (LSC, Ley de Sociedades Comerciales)

The general principle for the distribution of dividends is reflected in section 68 of the Argentine Companies’ Law (“LSC”), which provides that the dividends can only be approved and distributed when, once the fiscal year is closed, there are realized and liquid profits resulting from the balance sheet that was made according to the law, the bylaws, and approved by the shareholders’ meeting; “realized and liquid profits” are understood as the net profits from the fiscal year, specified with objective data, and which have an implicit irrevocable nature. The profits distributed in breach of that principle are repeatable, pursuant to the provisions of the second paragraph of said section, except if they are received in good faith, as set forth in section 225 of the Argentine Companies’ Law (“LSC”).

On the other hand, section 71 of the Argentine Companies’ Law (“LSC”) adds that the profits cannot be distributed until the losses of previous fiscal years are covered, and according to what is set forth in the second paragraph of the abovementioned section, this principle is not applicable in the case in which the managers, directors or syndics are paid with a percentage of the profits, and the shareholders’ meeting stipulates the payment of their remunerations even when the losses of the previous fiscal years are not covered. According to section 261 of the Argentine Companies’ Law (“LSC”), the maximum amount that can be received by the board members or the Supervisory Committee (including salaries and other remunerations for their performance in their permanent technical and administrative roles) shall not exceed twenty five percent (25%) of the profits. This maximum amount shall be limited to five per cent (5%) when dividends are not distributed to shareholders, and it shall be proportionally increased according to the distribution, up to the limit of twenty-five percent (25%) when all the profits are distributed.

The abovementioned general principle of section 68 of the Argentine Companies’ Law (“LSC”) is incorporated by section 224 of the Argentine Companies’ Law (“LSC”), corresponding to Corporations (“S.A.”). This section also contemplates the prohibition to distribute anticipated dividends, except for those companies that are included in section 299 of the Argentine Companies’ Law (“LSC”), i.e., those companies that make a public offering of their shares, have a capital that exceeds $10 million, have a mixed economy, carry out capitalization or savings transactions, exploit public concessions or services, and control or are controlled by the above-mentioned companies. In this case, said companies have the possibility of distributing anticipated dividends affecting partial profits obtained by the company during a period that does not coincide with that of the annuity of the fiscal year.

Anyway, according to the legal principles and caselaw, we understand that the anticipated distribution of dividends is subject the effective closure of the fiscal year, with liquid and realized profits, so that the permit the anticipated payment of distributed dividends.

1.2. General Resolution 7/2005 (“GR 7/2005”) of the Inspección General de Justicia (“IGJ”, Companies’ Control Authority)

Besides, section 78 of General Resolution 7/2005 provides that the term for the payment of dividends, which shall appear in the bylaws, shall not exceed the duration of the fiscal year in which they were approved. If the bylaws do not refer to this, the shareholders’ meeting shall be able to establish a special term for the payment of dividends, which shall not exceed 30 days. If the shareholders’ meeting does not establish this special term, the dividends shall be at the partners’ disposal as of the day following the shareholders’ meeting in which their distribution was approved. The payment can be made in periodical installments.

Besides, section 143 of the abovementioned GR 7/2005 provides that if the distribution of anticipated dividends is approved, this decision shall be communicated to the Inspección General de Justicia (“IGJ”, Companies’ Control Authority) within a period 10 business following the adoption of this decision, including the supporting documentation.

1.3. Exchange regulations

According to the exchange regulations in force, if the distribution of dividends is approved according to the provisions of the Argentine Companies’ Law (LSC, Ley de Sociedades Comerciales), there are no restrictions to the foreign exchange outflow under such concept. In that sense, the dividends approved by the Shareholders’ Meeting can enter the foreign exchange market and be drawn to foreign investors.

For further information, please see the exchange regulations in force which were issued by the Banco Central de la República Argentina(“BCRA”, Central Bank of the Argentine Republic).

2. Repatriation of profits and/or capital from a branch to the headquarters abroad

Communication A 3859 issued by the Central Bank of the Argentine Republic (BCRA, Banco Central de la República Argentina) and its amendments establishes that “…the entities that are authorized to carry out exchange transactions can make transfers abroad for the payment of profits and dividends corresponding to past financial statements certified by external auditors”.

According to this regulation, the local entities authorized to make foreign exchange transactions make transfers of profits from Argentine branches to their headquarters.

To perform such operation, Communication A 4177 of the Central Bank of the Argentine Republic (BCRA, Banco Central de la República Argentina) requires the presentation of all documentation that guarantees the genuineness of the operation regarding the concept and amount. For that purpose, the exchange regulations in force require the following:

  • I. Resolution by the headquarters ordering the branch to send the profits;
  • II. Resolution by the legal representative or representatives of the branch, approving the transfer of the profits arising from its balance sheet;
  • III. Accounting certificate evidencing the nature of the profits of the funds that are sent from the branch to the headquarters.

On the other hand, if the branch has allocated capital, it shall be able to repatriate the funds to the headquarters, making a total or partial reduction of such capital. In this case, section 6.3. of the General Resolution IGJ 11/06 establishes the procedure to be fulfilled by the branches “in case of an effective reduction as a consequence of remittances abroad” indicating the requirement, among others, of the publication contemplated in section 204 of the Argentine Companies’ Law (LSC, Ley de Sociedades Comerciales ) and the submission to the creditors’ opposition regime. For that purpose, the following shall be necessary, pursuant to the regulations in force:

  • I. resolution by the headquarters approving the total or partial reduction of the capital allocated to the branch;
  • II. publication of the notice in the Official Gazette and in a widely circulated local newspaper;
  • III. submission to a period of 15 days in which the creditors of the branch can oppose to such reduction of allocated capital.

Regarding the exchange regulations, Communications A 4662 of the BCRA and their amendments establish the concepts through which non residents can have access to the Single Free Exchange Market without requiring prior conformity from the Banco Central de la República Argentina(“BCRA”, Central Bank of the Argentine Republic). Among others, the following is established: “…1.13. Repatriations of direct investments in companies from the private non fiscal sector, that are not controlling companies of local fiscal entities, as long as the investor registers the permanence of that investment in the country for a period no shorter than 365 consecutive days, for the following concepts: … 1.13.3. Capital reduction decided by the local company.

It is worth mentioning that the authorization for non residents to make transfers under this concept corresponds to 05.11.07; before then, no transfer under the concept of capital reduction was permitted (neither for branches nor for subsidiaries).

Regardless of what has been stated, we would like to mention that:

  • (i) In all the cases the intervening exchange entity has the power to request the supporting documentation or information that it may deem necessary to verify the legal viability and genuineness of the corresponding transaction, in view of its joint responsibility under the Criminal Exchange Regime; and
  • (ii) In the case of choosing any of the abovementioned alternatives, it is recommendable to previously consult the intervening exchange entity in order to determine if there are no diverse opinions about the operational procedure to be used, which can be frequent on the market.

In order to buy a property in the Argentine Republic, foreign investors shall not only show their legal capacity but also their contribution of the necessary funds and their origin. For further information, please enter the guide to real estate market – “Other guides of interest”.

Doing Business in Buenos Aires, Argentina

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

www.kierjoffe.com