Corporate Alert: Entrepreneurial Capital Support Law
On 12 April 2017, the Argentine Government enacted Law No. 27.349 on entrepreneurial capital support, with the purpose of assisting entrepreneurship activities in Argentina and their international expansion, as well as for the generation of entrepreneurial capital in the country.
The innovations of this Law are the following:
- A new corporate structure is created, the Simplified Corporations (Sociedades por Acciones Simplificadas or by its Spanish abbreviation SAS). This shall allow the incorporation of a legal entity in 24 hours by one or two shareholders, and either by means of a notarial deed, a private document or by digital means with digital signature. This shall also allow the possibility to open a bank account and obtain a Tax ID in a short time period. The SAS shall have a minimum corporate capital in the amount of two mandatory minimum wages. It also allows the possibility to keep as irrevocable contributions for the future issuance of shares for a term of 24 months since their acceptance.
- The SAS shall be able to carry their corporate and accounting books by electronic means and/or create a web page in which all the information of these books is contained. Likewise, powers of attorney will be allowed to be granted in electronic notarial records.
- The Law creates an Entrepreneurial Capital Entities Registry in which all entities interested in enjoying tax benefits of the Law will need to be registered. Among such benefits, the Law allows the possibility to deduct from the determination of income tax, those capital contributions made in entrepreneurial entities.
- The creation of a Development of Entrepreneurial Capital Fiduciary Fund (Fondo Fiduciario para el Desarrollo del Capital Emprendedor or its Spanish abbreviation FONDCE) for the Government to be able to invest together with the private sector in any entrepreneurship or Entrepreneurial Capital Entities.
- Likewise, new rules were passed on crowdfunding digital platforms which allocate funds to entrepreneurs. These platforms shall be controlled by the Securities and Exchange Commission of Argentina (Comisión Nacional de Valores or its Spanish abbreviation CNV).
As of today, the Law is still pending further regulation, which shall be issued in the term of 60 days, counted as of its publication.