Top 10 challenges of doing business in Argentina
Article 3 minute read

Top 10 challenges of doing business in Argentina

23 October 2018

Argentina’s economy boomed in 2017 making it Latin America’s third- largest economy but now the country is in a financial crisis. The Argentinian currency, the peso, has plunged down drastically because of investor concerns about the government’s ability to control inflation.

Currently, with the high inflation rate, Argentina has become a riskier market. Expanding businesses moving into Argentina need local help on board in order to seamlessly navigate the diverse and complicated landscape.

1. Starting a Business

The World Bank and International Finance Corporation ranked Argentina as 117th out of 190th countries in the ease of doing business. To start a business in Argentina, it takes 13 procedures and 24 days to start a business in Argentina, which is well above the OECD average but on par with other countries in Latin America and the Caribbean.

2. Dealing with Construction Permits

Dealing with construction permits is by far the most complicated and time-consuming part of doing business in Argentina. The process clocks in at 347 days with 24 procedures that almost all contain associated costs. Obtaining a new construction project permit and an environmental impact assessment certificate takes 150 days in total. 

3. Getting Electricity

Obtaining approval of electrical plans from the relevant municipality, followed by submitting the service application to EDESUR, an Argentine distributor of electricity, and then waiting for connection cost estimates, can be a daunting task in Argentina, which can take 45 days. Then there are still 47 more days needed for inspections and connection work making this process very long and complex. 

4. Registering Property 

Registering property requires seven procedures and an average of 51.5 days which is about 10 days less than other Latin American and Caribbean countries. Before the process begins, all of these certificates must be obtained:  a certificate stating that no local taxes are due for that property,  a certificate with fiscal valuation ("certificado catastral"), a certificate of ownership ("dominio") and a certificate of good standing ("inhibiciones"). This adds time and costs to registering property in Argentina.

5. Getting Credit

Argentina ranks 77th in the world for ease of getting credit, according to the World Bank, making it one of the most streamlined processes in the country. Still, there are four complex procedures to navigate and the cost of obtaining credit can be quite steep.

6. Protecting Minority Investors 

Investor protection isn’t something that Argentina excels at, but it’s ranking is in line with most other South American countries.

7. Paying Taxes 

Paying taxes is a complicated procedure, with around nine payments per year and 311.5 hours of work required. Argentina has very high taxes and a complex system with overlapping taxes making paying taxes a big burden for businesses.

8. Trading Across Borders

Overseas trade can be challenging. The Argentinian government embarked on a progressive process of commercial opening, executing a series of economic reforms to promote new trade agreements and optimize the flow of trade and diversification of the exports and imports markets. Among the measures taken was the removal of tariffs on technological products. Despite these efforts, Argentina remains one of the most complex countries to commercialize in Latin America.

9. Enforcing Contracts

Enforcing contracts can take up to 995 days and 36 procedures, the second longest in LATAM. Filing and service takes 90 days and trial and judgement take 905 days.

10. Resolving Insolvency

It can take up to 2.4 years from filing for insolvency in court until the resolution of distressed assets and it can cost 16.5% of the estate.

TMF Group

The experts at TMF Argentina have the local knowledge to help you understand investing and operating your business in the country. Whether you want to set up in Argentina or just want to streamline your Argentinian operations, talk to us.

Written by

Claudio Cirocco

Argentina, Uruguay and Paraguay Managing Director

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