Economy Profile of Argentina

Ease of Doing Business in Argentina

ease of doing business in argentina

Rankings on Doing Business topics – Argentina

rankings on doing business topics argentina

Topic Scores

topic-scores-argentina

Starting a Business

This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city.

To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally start and formally operate a company (number)

  • Preregistration (for example, name verification or reservation, notarization)

  • Registration in the economy’s largest business city

  • Postregistration (for example, social security registration, company seal)

  • Obtaining approval from spouse to start a business or to leave the home to register the company

  • Obtaining any gender specific document for company registration and operation or national identification card

Time required to complete each procedure (calendar days)

  • Does not include time spent gathering information

  • Each procedure starts on a separate day (2 procedures cannot start on the same day)

  • Procedures fully completed online are recorded as ½ day

  • Procedure is considered completed once final document is received

  • No prior contact with officials

Cost required to complete each procedure (% of income per capita)

  • Official costs only, no bribes

  • No professional fees unless services required by law or commonly used in practice

Paid-in minimum capital (% of income per capita)

  • Funds deposited in a bank or with third party before registration or up to 3 months after incorporation

To make the data comparable across economies, several assumptions about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes.

The business:

-Is a limited liability company (or its legal equivalent). If there is more than one type of limited liability company in the economy, the limited liability form most common among domestic firms is chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office.

-Operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

-Performs general industrial or commercial activities such as the production or sale to the public of goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily polluting production processes.

-Does not qualify for investment incentives or any special benefits.

-Is 100% domestically owned.

-Has five business owners, none of whom is a legal entity. One business owner holds 30% of the company shares, two owners have 20% of shares each, and two owners have 15% of shares each.

-Is managed by one local director.

-Has between 10 and 50 employees one month after the commencement of operations, all of them domestic nationals.

-Has start-up capital of 10 times income per capita.

-Has an estimated turnover of at least 100 times income per capita.

-Leases the commercial plant or offices and is not a proprietor of real estate.

-Has an annual lease for the office space equivalent to one income per capita.

-Is in an office space of approximately 929 square meters (10,000 square feet).

-Has a company deed that is 10 pages long.

The owners:

-Have reached the legal age of majority and are capable of making decisions as an adult. If there is no legal age of majority, they are assumed to be 30 years old.

-Are in good health and have no criminal record.

-Are married, the marriage is monogamous and registered with the authorities.

-Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population.

Starting a Business – Argentina

Standardized Company Starting a Business - Argentina

Figure – Starting a Business in Argentina – Score

Starting a Business - Argentina

Figure – Starting a Business in Argentina and comparator economies – Ranking and Score

DB 2020 Starting a Business Score

Starting a Business in Argentina and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

Figure – Starting a Business in Argentina – Procedure, Time and Cost

starting a business in argentina procedure time and cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Details – Starting a Business in Argentina – Procedure, Time and Cost

1 Verify the availability and reserve the company name at the Office of Corporations (Inspección General de Justicia – IGJ)

: General Inspection of Justice (Inspección General de Justicia – IGJ)

The corporate name must first be reserved to incorporate a new company. A request must be submitted using the name reservation form (Reserva de Denominación). Such request expires in 30 days. Since August 2017, the corporate name can be reserved through the on-line platform "Trámites a Distancia" ("TAD").

2 Certify the partners' signatures and obtain a statement of transfer of funds from a notary public

Agency : Notary Office

The company is not obliged to notarize its bylaws, which can be formally constituted under a private document. However, the signatures of the founding partners have to be certified by a notary public.

1 day About ARS 3,875 (cost of 5 notarized signatures)

3 Publish a notice of incorporation in the official paper (Boletín Oficial)

Agency : Official Gazette

As the Official Gazette charges per line, final cost will depend on the length of the notice. As of 2017, the cost is ARS 130 per line for SRL.

2 days on average About ARS 3,900 (ARS

130 per line, assuming 30 lines)

4 Payment of the incorporation fee

Agency : Bank and Public Registry of Commerce

The invoice shall be downloaded from http://www2.jus.gov.ar/igj-tasas/, and be paid at the National Bank (Banco de la Nación Argentina) and submitted to the Public Registry of Commerce.

1 day ARS 100

5 Register the company with the Public Registry of Commerce

Agency : Public Registry of Commerce of the City of Buenos Aires

Companies located in the City of Buenos Aires must register their bylaws and other documents related to their incorporation. The Company must file the proposed Articles of Association and Bylaws, the publication in the Official Gazette, evidence of managers' and syndics' (the latter, if applicable) acceptance of position, evidence of the deposit of the cash contributions at the bank (Banco de la Nación Argentina), evidence of compliance with the managers' guarantee regime (filing of managers' performance bonds) and evidence of the reservation of the corporate name, for approval with the Office of Corporations. The filing also requires the filing of (a) a prequalification opinion ("Dictamen de Precalificación") issued by an attorney, notary public or accountant, each signature of whom must be certified by the relevant professional association. (b) evidence of payment of incorporation fee. (c) incorporation form. (d) "Politically Expossed Person" (anti-corruption) affidavit for each manager and statutory auditor (if applicable). (e) Affidavit on "ultimate beneficial owners" (anti-money laundering) meaning "any natural person that owns, directly or indirectly, an equity stake greater than or equal to 20% of the SRL's total outstanding equity."

On July 12, 2017, Resolución General 5/2017 created a special procedure for the constitution of Sociedad de Responsabilidad Limitada in 24 hours with an expedited fee. For this procedure, the company needs to file the Form 185 and presents a copy at the Public Registry of Commerce. If this procedure is duly complied with, the Company's Tax Id. Number (CUIT) will be granted jointly with the Company's registration with the GIC.

The expedited process covers the registration with the company with the Public Registry of Commerce, the purchase and legalization of company's books and the registration with tax and social security.

While for limited liability companies with a corporate capital of less than ARS 50,000,000, the expedited fee is of AR$ 7,200 and the regular fee is of ARS 1,800.

2 days ARS 7,200 (expedited procedure fee)

6 Obtain a fiscal code (Clave Fiscal) and the municipal code (Clave Ciudad) for the company's legal representatives

Agency : National Tax Authority (Administración Federal de Ingresos Públicos – AFIP)

After obtaining the CUIT through at the Registry, the company must obtain the codes at the National Tax Office (AFIP). It will be modified the declared name and add the type of corporation and link the legal representative's tax code with the company's CUIT.

7 Register for VAT with the National Tax Authority (AFIP)

Agency : National Tax Authority (Administración Federal de Ingresos Públicos – AFIP)

The VAT registration must be carried out through the National Tax Authority’s (AFIP). It must be done after the company obtains the Tax ID (CUIT) through the fiscal code (Clave Fiscal) of the legal representative at the National Tax Authority’s (AFIP) website.

Less than one day

(online procedure)

no charge

The legal representative will obtain his/her fiscal code (Clave Fiscal) and the municipal code (Clave Ciudad) directly in the corresponding AFIP agency by providing the national identity card and a photocopy of it.

1 day no charge

8 Register for the local turnover tax and enroll in the online Employer Registry (Registro de Empleadores) at the online platform (TAD) of the Municipal Tax Office (Administración General de Ingresos Públicos – AGIP)

The legal representative needs to link his/her digital signature (Clave Ciudad) previously obtained at the AFIP with the company at the AGIP website for distance procedures (Trámites de Administración a Distancia-TAD): https://clusterapw.agip.gob.ar/claveciudad/. The legal representative will need to provide his/her CUIT and the company one.

In the same TAD platform, the legal representative can register the company for the local turnover tax (Impuesto sobre Ingresos Brutos). It is required to upload the company information regarding the fiscal regime, the initial date of operation and the commercial activity.

In addition, since April 2019 it is required to upload the company information at the online Employers Registry (Registro de Empleadores). The information can be provided at the TAD platform and it should be updated annually.

9 Register at a Labor Risk Company (Aseguradora de Riesgos de Trabajo – ART) for hiring employees

Agency : Labor Risk Company (Aseguradora de Riesgos de Trabajo – ART)

The cost of hiring an insurance for the company’s employees is free but a premium must be paid on a monthly basis.

10 Register at the Simplification Registry for labor registration (Registro de Altas y Bajas de Relaciones Laborales)

Agency : National Tax Authority (Administracion Federal de Ingresos Publicos -AFIP)

Registration can be done online (www.afip.gob.ar) or by submitting the sworn affidavit form No. 885 to the AFIP. The company needs to provide in the application form the ART policy number. The social security withholding and contributions should be paid to the National Regime of Social Security.

11 Obtain the digital signature for the legal representative

Agency : Authorized registration agencies

To obtain the digital signature, the legal representative needs to complete the online application and make an online appointment with any of the authorized registries Buenos Aires. The legal representative will receive a confirmation email.

At the authorized Registry, the legal representative will provide the ID and a cryptographic device (as an USB stick). The civil servant at the Registry will configure the digital signature in the USB device and he/she will validate the procedure and sent an email with the certificate serial number and the PIN code for revocation.

12 Online legalization of the employee books with the Ministry of Labor (Dirección General de Empleo)

Agency : Directorate of Labor of the City of Buenos Aires (Dirección General de Empleo)

The legalization of the book is made by the Ministry of Labor after the company registration at the Registry of Employers. For companies with more than 10 employees, it is required the online procedure at the following website: https://rubricadigital.buenosaires.gob.ar/

The legal representative will access with the company CUIT and the online platform will automatically verify if the company is register at the Registry of Employers to generate a password that will be sent by email.

Each page of the wages book used has to be upload in pdf file and it is required a monthly update. Therefore, the price to be paid will vary according to the number of pages the employer rubricates. Rubric of each page used is mandatory. Once the files are uploaded, the legal representative needs to finish the procedure signing with the electronic certificate. The platform will generate a payment check that can be paid directly online.

Dealing with Construction Permits

This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information

What the indicators measure

Case study assumptions

Procedures to legally build a warehouse (number)

  • Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates

  • Submitting all required notifications and receiving all necessary inspections

  • Obtaining utility connections for water and sewerage

  • Registering and selling the warehouse after its completion

Time required to complete each procedure (calendar days)

  • Does not include time spent gathering information

  • Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule

  • Procedure is considered completed once final document is received

  • No prior contact with officials

Cost required to complete each procedure (% of income per capita)

  • Official costs only, no bribes

Building quality control index (0-15)

  • Quality of building regulations (0-2)

  • Quality control before construction (0-1)

  • Quality control during construction (0-3)

  • Quality control after construction (0-3)

  • Liability and insurance regimes (0-2)

  • Professional certifications (0-4)

To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used.

The construction company (BuildCo):

  • Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or topographical experts.

  • Owns the land on which the warehouse will be built and will sell the warehouse upon its completion.

The warehouse:

  • Will be used for general storage activities, such as storage of books or stationery.

  • Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita.

  • Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures.

  • Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements).

The water and sewerage connections:

  • Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built.

  • Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 gallons) a day.

  • Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.

Dealing with Construction Permits – Argentina

Dealing with Construction Permits - Argentina

Figure – Dealing with Construction Permits in Argentina – Score

Dealing with Construction Permits in Argentina – Score

Figure – Dealing with Construction Permits in Argentina and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

Dealing with Construction Permits in Argentina and comparator economies - Ranking and Score

Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators.

Figure – Dealing with Construction Permits in Argentina – Procedure, Time and Cost

Dealing with Construction Permits in Argentina – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Figure – Dealing with Construction Permits in Argentina and comparator economies – Measure of Quality

Dealing with Construction Permits in Argentina and comparator economies – Measure of Quality

Details – Dealing with Construction Permits in Argentina – Procedure, Time and Cost

No. Procedures Time to Complete Associated Costs

1 Obtain a topographic map

Agency : Private licensed company

A topographic map is obtained prior to designing the building plans. This map measures the variation in levels on the specific terrain. It is a general technical requirement when building a structure of this class.

2 Request and obtain certificate of line and dimensions (certificado de medidas perimetrales y anchos de calles)

Agency : General Directorate of Registration of Works and Cadastre (Dirección General de Registro de Obras y Catastro- DGROC)

BuildCo can obtain the certificate online and free of charge.

11 days USD 1,100

0.5 days no charge

3 Request and obtain land title (certificado de nomenclatura parcelaria)

: General Directorate of Registration of Works and Cadastre (Dirección General de Registro de Obras y Catastro- DGROC)

BuildCo can obtain the certificate online paying a fee of ARS 2,500.

4 Hold a cadastral consultation (consulta de registro catastral)

: General Directorate of Registration of Works and Cadastre (Dirección General de Registro de Obras y Catastro- DGROC)

The cadastral consultation is a prerequisite for clarifying subsequent procedures. The land ownership certificate, the plot surface area, and the terrain and cadastral measurements are confirmed. Proof of consultation is issued.

Since January 2019, BuildCo can obtain the cadastral consultation paying a fee of 1,000 ARS.

0.5 days ARS 2,500

0.5 days ARS 1,000

5 Request and obtain certificate of project drawings (certificado de encomienda) from College of Professional Architects

Agency : College of Professional Architects

The fee the College of Professional Architects charges ARS with 8,760. Fee schedule can be accessed at http://www.cpau.org/nota/7352/tramites

6 Obtain construction work use form (certificado de uso conforme)

: General Directorate of Registration of Works and Cadastre (Dirección General de Registro de Obras y Catastro- DGROC)

Similar to a zoning certificate, the form is issued according to the Urban Planning Code. Since January 2019, BuildCo can obtain the certificate online paying a fee of ARS 235

1 day ARS 8,760

0.5 days ARS 235

7 Request and obtain delineation and construction rights (derechos de delineación y construcción)

Agency : General Directorate of Registration of Works and Cadastre (Dirección General de Registro de Obras y Catastro- DGROC)

BuildCo must request the payment of delineation and construction rights and inspections to the Accounting department of DGROC.

Since 2019, this procedure can be done through the e-platform TAD enabled by the Buenos Aires Municipality. BuildCo must fill an online form and obtain a paying-in slip. The proof of payment of such slip is one of the documents needed for obtaining the building permit and must be attached to BuildCo's application.

0.5 days ARS 425,361

8 Obtain a new construction project permit (permiso de obra nueva)

: General Directorate of Registration of Works and Cadastre (Dirección General de Registro de Obras y Catastro- DGROC)

Once that BuildCo has submitted its application through the TAD platform, it takes three months to DGROC to issue the building permit. This step is free of charge as BuildCo pays for the building permit issuance in the previous procedure.

90 days no charge

9 Request and obtain environmental impact assessment certificate

Agency : Environmental Protection Agency (Agencia de Proteccion Ambiental)

Other documents needed include the following:

  • Environmental Assessment Impact form (Formulario Categorización Impacto Ambiental)
  • DDJJ through Form Annex II Dcto 1352/02
  • Formula Polinómica s/ Annex VIII de Resol. 873–SSMAMB/ 04
  • Aide memoire (memoria descriptiva) with the signature of the main representative (firma del titular) s/ Annex Vd Decree 1352/02 that includes:
  1. Description of the activity, including materials and inputs, supply and storage processes, operation and location of the machinery used, logistics to deliver products and services, among other things.
  2. Further details or clarifications on emissions, solid waste, noise vibrations from machinery, and so forth (including results from the formula polinómica).
  3. Detailed information on cargo-handling logistics.
  4. Detailed information of construction projects designed to mitigate negative impacts.
  5. Detailed information on land usage.
  6. Fire prevention plan.
  7. Waste management plan.
  • Environmental impact map
  • Registration number in the Registry for Consultants and Professionals (Reg. No. 344 Evaluac. Ambtal. 4/10/00)
  • Encomienda to the Professional Council
  • Notarized copy of the property title

According to Article 150 of 2018 Tariff Law of the City of Buenos Aires, the fee for buildings between 1,000 and 5,000 m2 is ARS 4.920,00

10 Notify the Governmental Inspection Agency on completion of the construction work foundation and receive inspection

Agency : Governmental Inspection Agency (Agencia Gubernamental de Control)

Since January 2019, BuildCo can make the notification online. It takes 7 days to receive the inspection.

11 Notify the Governmental Inspection Agency on completion of the construction work structure and receive inspection

Agency : Governmental Inspection Agency (Agencia Gubernamental de Control)

Since January 2019, BuildCo can make the notification online. It takes 7 days to receive the inspection.

12 Notify the Governmental Inspection Agency on completion of the construction work masonry and receive inspection

Agency : Governmental Inspection Agency (Agencia Gubernamental de Control)

Since January 2019, BuildCo can make the notification online. It takes 7 days to receive the inspection.

Details – Dealing with Construction Permits in Argentina – Measure of Quality

Dealing with Construction Permits in Argentina – Measure of Quality

Getting Electricity

This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to obtain an electricity connection (number)

  • Submitting all relevant documents and obtaining all necessary clearances and permits

  • Completing all required notifications and receiving all necessary inspections

  • Obtaining external installation works and possibly purchasing material for these works

  • Concluding any necessary supply contract and obtaining final supply

Time required to complete each procedure (calendar days)

  • Is at least 1 calendar day

  • Each procedure starts on a separate day

  • Does not include time spent gathering information

  • Reflects the time spent in practice, with little follow-up and no prior contact with officials

Cost required to complete each procedure (% of income per capita)

  • Official costs only, no bribes

  • Value added tax excluded

The reliability of supply and transparency of tariffs index (0-8)

  • Duration and frequency of power outages (0–3)

  • Tools to monitor power outages (0–1)

  • Tools to restore power supply (0–1)

  • Regulatory monitoring of utilities’ performance (0–1)

  • Financial deterrents limiting outages (0–1)

Transparency and accessibility of tariffs (0–1)

To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used.

The warehouse:

  • Is owned by a local entrepreneur and is used for storage of goods.

  • Is located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway.

  • Is a new construction and is being connected to electricity for the first time.

  • Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square feet). The plot of land on which it is built is 929 square meters (10,000 square feet).

The electricity connection:

  • Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).

  • Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road.

  • Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service panel or switchboard and the meter base.

The monthly consumption:

  • It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.

  • If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.

  • Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.

Price of electricity (cents per kilowatt-hour)*

Price based on monthly bill for commercial warehouse in case study

*Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity.

Getting Electricity – Argentina

Getting Electricity - Argentina

Figure – Getting Electricity in Argentina – Score

Getting Electricity in Argentina – Score

Figure – Getting Electricity in Argentina and comparator economies – Ranking and Score

DB 2020 Getting Electricity Score

Getting Electricity in Argentina and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity.

Figure – Getting Electricity in Argentina – Procedure, Time and Cost

Getting Electricity in Argentina – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures

Figure – Getting Electricity in Argentina and comparator economies – Measure of Quality

Getting Electricity in Argentina and comparator economies – Measure of Quality

Details – Getting Electricity in Argentina – Procedure, Time and Cost

1 Obtain approval of electrical plans from municipality

Agency : Municipio

The customer must obtain the approval of internal wiring electrical plans from the municipality ("Habilitacion Municipal del plano electromecánico y del plano de la instalación eléctrica"). The municipal clearance is required for all new industrial constructions. The customer must provide the following documents in order to obtain this approval: The application form; two sets of electrical plans detailing: a) the location of the machines and their respective electricity needs and b) the design of the internal wiring installation; a receipt attesting that the building permit approval has already been requested. This approval is necessary as the customer will have to present the approved municipal clearance at the end of the connection process.

2 Submit service application to EDESUR and await estimate of connection costs

Agency : Edesur

The application for the service connection can be submitted online, in person, by mail or fax. The following documents are required with the application:

  • Letterhead indicating the name and coordinates of the authorized applying customer

  • Details on the required electricity load and the simultaneity factor (this element specifies how much electrical equipment will be consuming electricity at the same time).

  • Sketch of the geographic location of the construction

  • Document clarifying the ownership of the building

  • Application for the Municipal approval of electrical plans (if the building is still under construction the approved building plans are also required).

  • Identification document for the owner of the building

  • A valid document indicating the directors of the company

  • Document certifying that the customer is authorized to submit this application and a copy of his national identity document (Documento Nacional de Identidad -DNI)

  • Proof of registration with the Federal Tax Authority (Administración Federal de Ingresos Públicos

    – AFIP)

  • DCI -an internal wiring certificate (DCI – Declaración de conformidad Res. ENRE 207/95) issued by an electrician registered with the Association for the Promotion of Electrical Safety ("Asociación para la Promoción de la Seguridad Eléctrica -A.P.S.E."). It is not compulsory.

  • If the customer is not the owner of the building, a security deposit is required representing the equivalent of two months of future consumption.

As soon as the client submits the application, the utility will request the excavation permit to the Municipality of Buenos Aires.

45 calendar days ARS 3,950

45 calendar days ARS 0

3 Receive external inspection by EDESUR

Agency : Edesur

Edesur carries out an external inspection to prepare the technical report and prepares an estimate for the connection costs. It is preferable that a representative of the customer is present at the time of the inspection. The inspector will establish the connection point and, if necessary, the best location for the chamber for the distribution transformer. A technical project detailing the required external connection works will be elaborated to determine which part of the external works will be carried out by the customer or his sub-contractor.

4 Hire registered electrician to certify internal wiring

: Un electricista registrado con la Asociación para la Promoción de la Seguridad Eléctrica (A.P.S.E.)

The customer must obtain an internal wiring certificate (“DCI – Declaración de conformidad”). The DCI is issued by an electrician registered with the Association for the Promotion of Electrical Safety ("Asociación para la Promoción de la Seguridad Eléctrica -A.P.S.E."). The internal wiring of the building is the responsibility of the user/owner of the building.

11 calendar days ARS 0

7 calendar days ARS 17,000

5 Carry out civil works required by EDESUR

Agency : Electrical Contractor

After the customer receives the cost estimate and the details of the external connection works needed from EDESUR, he hires a subcontractor to carry out the connection works, as required by EDESUR.

25 calendar days ARS 19,500

6 Receive connection works and meter installation by EDESUR

Agency : Edesur

EDESUR approves the connection works carried out by the customer’s electrical contractor, obtains the relevant approvals from the municipality to do the excavation works in public spaces and finalizes the connection works. The installation of the meter happens on the same day that the connection works are carried out and the electricity starts flowing right away.

The signed supply contract is a prerequisite for EDESUR to start its part of the connection works. By means of the supply contract the client commits to paying the electricity that will be consumed and to not lower the initial load estimate on which the connection works are based. At this moment, the client also has to present the electrical plans approved by the relevant Municipality ("Habilitacion Municipal del plano electromecánico and del plano de la instalación eléctrica"). After the supply contract has been signed, EDESUR inspects the part of the connection works that was carried out by the customer’s electrical contractor, and finalizes the connection works.

21 calendar days ARS 8,505

Details – Getting Electricity in Argentina – Measure of Quality

Getting Electricity in Argentina – Measure of Quality

Note:

If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Registering Property

This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally transfer title on immovable property (number)

  • Preregistration procedures (for example, checking for liens, notarizing sales agreement, paying property transfer taxes)

  • Registration procedures in the economy's largest business city.

  • Postregistration procedures (for example, filling title with municipality)

Time required to complete each procedure (calendar days)

  • Does not include time spent gathering information

  • Each procedure starts on a separate day – though procedures that can be fully completed online are an exception to this rule

  • Procedure is considered completed once final document is received

  • No prior contact with officials

Cost required to complete each procedure (% of property value)

  • Official costs only (such as administrative fees, duties and taxes).

  • Value Added Tax, Capital Gains Tax and illicit payments are excluded

Quality of land administration index (0-30)

  • Reliability of infrastructure index (0-8)

  • Transparency of information index (0–6)

  • Geographic coverage index (0–8)

  • Land dispute resolution index (0–8)

  • Equal access to property rights index (-2–0)

To make the data comparable across economies, several assumptions about the parties to the transaction, the property and the procedures are used.

The parties (buyer and seller):

  • Are limited liability companies (or the legal equivalent).

  • Are located in the periurban (that is, on the outskirts of the city but still within its official limits) area of the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Are 100% domestically and privately owned.

  • Perform general commercial activities.

    The property (fully owned by the seller):

  • Has a value of 50 times income per capita, which equals the sale price.

  • Is fully owned by the seller.

  • Has no mortgages attached and has been under the same ownership for the past 10 years.

  • Is registered in the land registry or cadastre, or both, and is free of title disputes.

  • Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required.

  • Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its entirety.

  • Will not be subject to renovations or additional construction following the purchase.

  • Has no trees, natural water sources, natural reserves or historical monuments of any kind.

  • Will not be used for special purposes, and no special permits, such as for residential use, industrial plants, waste storage or certain types of agricultural activities, are required.

  • Has no occupants, and no other party holds a legal interest in it.

Registering Property – Argentina

Registering Property - Argentina

Figure – Registering Property in Argentina – Score

Registering Property in Argentina – Score

Figure – Registering Property in Argentina and comparator economies – Ranking and Score

Registering Property in Argentina – Score

Registering Property in Argentina – Score

Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators.

Figure – Registering Property in Argentina – Procedure, Time and Cost

Registering Property in Argentina – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Figure – Registering Property in Argentina and comparator economies – Measure of Quality

Registering Property in Argentina and comparator economies – Measure of Quality

Details – Registering Property in Argentina – Procedure, Time and Cost

1 Obtain a certificate stating that no local taxes related to the property are due (ABL)

Agency : Administración Gubernamental De Ingresos Públicos

This certificate ("Certificado de libre deuda de impuestos municipales-ABL") shows local taxes related to the property being sold are known as ABL (“alumbrado, barrido y limpieza”, street light and cleaning). The certificate is valid for 30 days (or the current month), according to the 2009 “Código Fiscal” of the city of Buenos Aires, which shortened the original 1 year validity.

2 Obtain a cadastral certificate ("certificado catastral")

Agency : City of Buenos Aires government (“Oficina catastral”)

4 Seller must obtain a certificate of ownership ("dominio") and a certificate of good standing ("inhibiciones") from the Real Property Registry

Agency : Real Property Registry (Registro de la propiedad inmueble de la Capital Federal)

The certificate of ownership ("Certificado de dominio") proves that the property is free and clear of liens and or encumbrances. According to Executive Order No. 2080/80, Article 8, it is mandatory to obtain the non-encumbrance certificate. The certificate of personal annotation ("Certificado de inhibiciones") proves that there is no judicial order restraining the seller from encumbering or disposing of his assets.

DTR RPI 2/2017 states that Certificate of ownership can be obtained online at

Less than one day,

online

ARS 2,205; (Certificado Dominio – urgent web procedure cost is $910.00

Certificado de inhibiciones – urgent web procedure

$1,295.00)

The ownership certificate and a personal annotation are valid for 15 days, and they are both requested with a unified form.

When a notary from the Capital Federal requests an ownership certificate, the property is “reserved” for 60 days. If a new ownership certificate is requested during this period, it will state that a transaction is in process.

Certificate of Personal Annotation can also be obtained online. DTR RPI 18/2016 states that the certificate of personal annotation can be obtained online at the Registry website www.dnrpi.jus.gov.ar. Only interested parties pursuant to sections 6,7 and 22, Law No. 17,801 can obtain the certificate online, and they also need to be registered users of the website (notaries, accountants, lawyers,…). In practice the urgent procedure is more prevalent.

The notary requests the cadastral certificate (with measures, boundaries and fiscal valuation) at the Cadastral office (“Oficina catastral”). The certificate is valid for 6 months. In the Capital Federal, there is no need for a surveyor to measure the property.

2 days ARS 450; (Cost of

Agency : Administración Gubernamental De Ingresos Públicos

Property transfers in the City of Buenos Aires and some parts of the Province of Buenos Aires require a “Valor Inmobiliario de Referencia (VIR)” (Real Estate Reference Value”). The VIR was introduced by Resolutión Nº 67-AGIP-10 of February 10, 2010 and later amended by Resolutión Nº 435-AGIP-11 of August 3, 2011. A VIR is assigned to every property by the revenue agency and it sets a minimum base to calculate the stamp tax. The VIR aims to prevent the undervaluation of properties done to pay less stamp duty on property transfers.

The notary has the responsibility to check the VIR, since the stamp duty will be calculated on the greater value between VIR, the fiscal valuation ('valuación fiscal') and the sale price agreed by parties. The procedure is free, and it can be obtained online by the notary through the revenue agency website www.agip.gob.ar. However, not all the properties in the City of Buenos Aires have been assigned a VIR yet. In these cases, the notary must obtain a certificate stating that there is no VIR for the property.

Less than one day, online

no charge

5 Obtain “Code of Offer of Transfer of a Property” (COTI) at tax agency AFIP

Agency : Tax Agency (AFIP)

Sellers have to declare property transfers of over ARS 1.5000.00 to the tax authorities in the City (AFIP). The declaration shall include the names of the buyer and seller, the property being transferred and the value of the transaction. Once the transaction is declared, the seller will obtain a "Code of Offer of Transfer of a Property" (COTI) from AFIP. The COTI has a validity of 24 months (extendable 12 months if a construction is to be made).

Less than one day,

online

no charge

The "Code of Offer of Transfer of a Property" (COTI) may be obtained:

  • online: through www.afip.gov.ar, accessing to the system with a tax code; or

    -on the phone (0800-999-2347), in which case it will be necessary to print a certificate afterwards from www.afip.gov.ar (access to the system is with a tax code); or

  • via SMS, texting 2347: the user will receive a reply with the number of procedure and will be

contacted later by the Information Call Center to continue with the procedure.

6 The public deed is executed by the parties through a notary public

Agency : Notary

The public deed is the only document which is mandatory by law to transfer a property's ownership. Transactions subject to Capital Gains Tax are not subject to Transfer Tax (this is the case when companies are parties to the transaction). Capital Gains Tax is paid by the seller.

However, this tax is not applicable if the money collected by seller for the transfer of property is used to buy another property within a year of the sale or for the construction of a new property. In this last case, for the tax waiver to apply, the construction has to start a year after or a year before the transaction and it has to be completed 4 years after the date of the transaction.

The notary will retain the 1.5% for the transfer tax, but if the transaction is subject to Capital Gains Tax (CGT), he will use this amount to pay the CGT. If the transaction has been arranged through a broker, his fees will be about 3% of the purchase price.

20 days ARS 1,001,974.89;

(Notary public fees: 1- 1.5% of the purchase price (usually paid by buyer) Stamp Tax (City of Buenos Aires tax): 3.6 % of the greater value between the VIR, the fiscal valuation and the purchase price (usually paid jointly) Transfer Tax: 1.5% of the purchase price (Income Tax applicable to companies, paid by seller))

7 The notary public files the property transfer for registration with the Real Property Register

Agency : Real Property Registry (Registro de la propiedad inmueble de la Capital Federal) The notary public files the property transfer for registration with the Real Property Register. In practice the urgent procedure is more prevalent.

Takes place simultaneously with previous procedure.

28 days ARS 33,558.26; (Service fees: ARS 800 (regular) or ARS 2000 (urgent) + 0.2% property price additional stamp tax)

Details – Registering Property in Argentina – Measure of Quality

Registering Property in Argentina – Measure of Quality Registering Property in Argentina – Measure of Quality Registering Property in Argentina – Measure of Quality

Getting Credit

This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Strength of legal rights index (0–12)

  • Rights of borrowers and lenders through collateral laws (0-10)

  • Protection of secured creditors’ rights through bankruptcy laws (0-2)

Depth of credit information index (0–8)

  • Scope and accessibility of credit information distributed by credit bureaus and credit registries (0-8)

Credit bureau coverage (% of adults)

  • Number of individuals and firms listed in largest credit bureau as a percentage of adult population

Credit registry coverage (% of adults)

  • Number of individuals and firms listed in credit registry as a percentage of adult population

Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit information index measures rules and practices affecting the coverage, scope and accessibility of credit information available through a credit registry or a credit bureau. The strength of legal rights index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary secured transactions system exists. Then two case scenarios, case A and case B, are used to determine how a nonpossessory security interest is created, publicized and enforced according to the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a secured lender, BizBank.

In some economies the legal framework for secured transactions will allow only case A or case B (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral.

Several assumptions about the secured borrower (ABC) and lender (BizBank) are used:

  • ABC is a domestic limited liability company (or its legal equivalent).

  • ABC has up to 50 employees.

  • ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Both ABC and BizBank are 100% domestically owned.

The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests).

In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets.

Getting Credit – Argentina

Getting Credit - Argentina

Figure – Getting Credit in Argentina – Score

Getting Credit in Argentina – Score

Figure – Getting Credit in Argentina and comparator economies – Ranking and Score

DB 2020 Getting Credit Score

Getting Credit in Argentina and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index.

Figure – Legal Rights in Argentina and comparator economies

Details – Legal Rights in Argentina

Legal Rights in Argentina

Figure – Credit Information in Argentina and comparator economies

Credit Information in Argentina and comparator economies

Details – Credit Information in Argentina

Credit Information in Argentina

Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0.

Credit Information in Argentina

Protecting Minority Investors

This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

  • Extent of disclosure index (0–10): Disclosure, review, and approval requirements for related-party transactions

  • Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for prejudicial related-party transactions; Available legal

    remedies (damages, disgorgement of profits, disqualification from managerial position(s) for one year or more, rescission of the transaction)

  • Ease of shareholder suits index (0–10): Access to internal corporate documents; Evidence obtainable during trial and allocation of legal expenses

  • Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of shareholder suits indices

  • Extent of shareholder rights index (0-6): Shareholders’ rights and role in major corporate decisions

  • Extent of ownership and control index (0-7): Governance safeguards protecting shareholders from undue board control and entrenchment

  • Extent of corporate transparency index (0-7): Corporate transparency on ownership stakes, compensation, audits and financial prospects

  • Extent of shareholder governance index (0–20): Sum of the extent of shareholders rights, extent of ownership and control and extent of corporate transparency indices

  • Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices

To make the data comparable across economies, a case study uses several assumptions about the business and the transaction.

The business (Buyer):

  • Is a publicly traded corporation listed on the economy’s most important stock exchange.

  • Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not specifically required by law.

  • Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members.

  • Has not adopted bylaws or articles of association that go beyond the minimum requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory.

  • Is a manufacturing company with its own distribution network.

    The transaction involves the following details:

  • Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to Buyer’s five-member board.

  • Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores.

  • Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of Buyer’s assets and is higher than the market value.

  • The proposed transaction is part of the company’s principal activity and is not outside the authority of the company.

  • Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently.

  • The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and directors that approved the transaction.

Protecting Minority Investors – Argentina

Protecting Minority Investors - Argentina Protecting Minority Investors - Argentina Indicator

Figure – Protecting Minority in Argentina – Score

Protecting Minority in Argentina – Score

Figure – Protecting Minority Investors in Argentina and comparator economies – Ranking and Score

DB 2020 Protecting Minority Investors Score

Protecting Minority Investors in Argentina and comparator economies

Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index.

Figure – Protecting Minority Investors in Argentina and comparator economies – Measure of Quality

Protecting Minority Investors in Argentina and comparator economies – Measure of Quality

Details – Protecting Minority Investors in Argentina – Measure of Quality

Protecting Minority Investors in Argentina – Measure of Quality Protecting Minority Investors in Argentina – Measure of Quality

Paying Taxes

This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information.

What the indicators measure

Tax payments for a manufacturing company in 2018 (number per year adjusted for electronic and joint filing and payment)

  • Total number of taxes and contributions paid or withheld, including consumption taxes (value added tax, sales tax or goods and service tax)

  • Method and frequency of filing and payment

Time required to comply with 3 major taxes (hours per year)

  • Collecting information, computing tax payable

  • Preparing separate tax accounting books, if required

  • Completing tax return, filing with agencies

  • Arranging payment or withholding

Total tax and contribution rate (% of commercial profits)

  • Profit or corporate income tax

  • Social contributions, labor taxes paid by employer

  • Property and property transfer taxes

  • Dividend, capital gains, financial transactions taxes

  • Waste collection, vehicle, road and other taxes

Postfiling Index

  • Time to comply with VAT refund (hours)

  • Time to obtain VAT refund (weeks)

  • Time to comply with a corporate income tax correction (hours)

  • Time to complete a corporate income tax correction (weeks)

Using a case scenario, Doing Business records taxes and mandatory contributions a medium size company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax laws, time taken to comply with the requirements of postfiling processes and time waiting.

To make data comparable across economies, several assumptions are used:

  • TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured at all levels of government.

The VAT refund process:

  • In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output VAT in June 2018.

The corporate income tax audit process:

  • An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period.

Paying Taxes – Argentina

Paying Taxes - Argentina

Figure – Paying Taxes in Argentina – Score

Paying Taxes in Argentina – Score

Figure – Paying Taxes in Argentina and comparator economies – Ranking and Score

DB 2020 Paying Taxes Score

Paying Taxes in Argentina and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold.

Figure – Paying Taxes in Argentina and comparator economies – Measure of Quality

Paying Taxes in Argentina and comparator economies – Measure of Quality

Details – Paying Taxes in Argentina

Paying Taxes in Argentina

Details – Paying Taxes in Argentina – Tax by Type

Details – Paying Taxes in Argentina – Tax by Type

Details – Paying Taxes in Argentina – Measure of Quality

Paying Taxes in Argentina – Measure of Quality

Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable.

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction.

N/A = Not applicable.

Trading across Borders

Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Documentary compliance

  • Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border handling in origin economy

  • Obtaining, preparing and submitting documents required by destination economy and any transit economies

  • Covers all documents required by law and in practice, including electronic submissions of information

Border compliance

  • Customs clearance and inspections

  • Inspections by other agencies (if applied to more than 20% of shipments)

  • Handling and inspections that take place at the economy’s port or border

Domestic transport

  • Loading or unloading of the shipment at the warehouse or port/border

  • Transport between warehouse and port/border

  • Traffic delays and road police checks while shipment is en route

To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions:

Time:

Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours.

Cost:

Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector experts in international trade logistics and are informed about exchange rates.

Assumptions of the case study:

  • For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy.

  • It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000.

  • The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport or land border crossing.

  • All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process.

  • A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy.

Figure – Trading across Borders in Argentina – Score

Trading across Borders in Argentina – Score

Figure – Trading across Borders in Argentina and comparator economies – Ranking and Score

Trading across Borders in Argentina and comparator economies – Ranking and Score

Figure – Trading across Borders in Argentina – Time and Cost

Trading across Borders in Argentina - Time and Cost

Details – Trading across Borders in Argentina

Trading across Borders in Argentina

Details – Trading across Borders in Argentina – Components of Border Compliance

Trading across Borders in Argentina – Components of Border Compliance

Details – Trading across Borders in Argentina – Trade Documents

Trading across Borders in Argentina – Trade Documents

Enforcing Contracts

The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. information.

What the indicators measure

Time required to enforce a contract through the courts (calendar days)

  • Time to file and serve the case

  • Time for trial and to obtain the judgment

  • Time to enforce the judgment

Cost required to enforce a contract through the courts (% of claim value)

  • Average attorney fees

  • Court costs

  • Enforcement costs

Quality of judicial processes index (0-18)

  • Court structure and proceedings (-1-5)

  • Case management (0-6)

  • Court automation (0-4)

  • Alternative dispute resolution (0-3)

The dispute in the case study involves the breach of a sales contract between two domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement.

To make the data on the time and comparable across economies, several assumptions about the case are used:

  • The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of adequate quality.

  • The value of the dispute is 200% of the income per capita or the equivalent in local currency of USD 5,000, whichever is greater.

  • The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater.

  • The Seller requests the pretrial attachment of the defendant’s movable assets to secure the claim.

  • The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods was not adequate.

  • The judge decides in favor of the seller; there is no appeal.

  • The Seller enforces the judgment through a public sale of the Buyer’s movable assets.

Enforcing Contracts – Argentina

Enforcing Contracts - Argentina

Figure – Enforcing Contracts in Argentina – Score

Enforcing Contracts in Argentina - Score

Figure – Enforcing Contracts in Argentina and comparator economies – Ranking and Score

DB 2020 Enforcing Contracts Score

Enforcing Contracts in Argentina and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators.

Figure – Enforcing Contracts in Argentina – Time and Cost

Enforcing Contracts in Argentina – Time and Cost

Figure – Enforcing Contracts in Argentina and comparator economies – Measure of Quality

Enforcing Contracts in Argentina and comparator economies – Measure of Quality

Details – Enforcing Contracts in Argentina

Enforcing Contracts in Argentina

Details – Enforcing Contracts in Argentina – Measure of Quality

Enforcing Contracts in Argentina – Measure of Quality Enforcing Contracts in Argentina – Measure of Quality

Resolving Insolvency

Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Time required to recover debt (years)

  • Measured in calendar years

  • Appeals and requests for extension are included

Cost required to recover debt (% of debtor’s estate)

  • Measured as percentage of estate value

  • Court fees

  • Fees of insolvency administrators

  • Lawyers’ fees

  • Assessors’ and auctioneers’ fees

Other related fees

To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used:

  • A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties.

  • The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater.

  • The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. The hotel cannot pay back the loan, but makes enough money to operate otherwise.

In addition, Doing Business evaluates the quality of legal framework applicable to judicial liquidation and reorganization proceedings and the extent to which best insolvency practices have been implemented in each economy covered.

Outcome

  • Whether business continues operating as a going concern or business assets are sold piecemeal

Recovery rate for creditors

  • Measures the cents on the dollar recovered by secured creditors

  • Outcome for the business (survival or not) determines the maximum value that can be recovered

  • Official costs of the insolvency proceedings are deducted

  • Depreciation of furniture is taken into account

  • Present value of debt recovered

Strength of insolvency framework index (0- 16)

  • Sum of the scores of four component indices:

  • Commencement of proceedings index (0-3)

  • Management of debtor’s assets index (0-6)

  • Reorganization proceedings index (0-3)

  • Creditor participation index (0-4)

Resolving Insolvency – Argentina

Resolving Insolvency - Argentina

Figure – Resolving Insolvency in Argentina – Score

Resolving Insolvency in Argentina – Score

Figure – Resolving Insolvency in Argentina and comparator economies – Ranking and Score

DB 2020 Resolving Insolvency Score

Resolving Insolvency in Argentina and comparator economies - Ranking and Score

Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index.

Figure – Resolving Insolvency in Argentina – Time and Cost

Resolving Insolvency in Argentina – Time and Cost

Figure – Resolving Insolvency in Argentina and comparator economies – Measure of Quality

Resolving Insolvency in Argentina and comparator economies – Measure of Quality

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Figure – Resolving Insolvency in Argentina and comparator economies – Recovery Rate

Resolving Insolvency in Argentina and comparator economies – Recovery Rate

Details – Resolving Insolvency in Argentina

Resolving Insolvency in Argentina

Details – Resolving Insolvency in Argentina – Measure of Quality

Resolving Insolvency in Argentina – Measure of Quality

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business.

The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Hiring

(i) whether fixed-term contracts are prohibited for permanent tasks; (ii) maximum cumulative duration of fixed-term contracts;

(iii) length of the maximum probationary period; (iv) minimum wage;(v) ratio of minimum wage to the average value added per worker.

Working hours

(i) maximum number of working days allowed per week; (ii) premiums for work: at night, on a weekly rest day and overtime;

(iii) whether there are restrictions on work at night, work on a weekly rest day and for overtime work; (iv) length of paid annual leave.

Redundancy rules

(i) whether redundancy can be basis for terminating workers; (ii) whether employer needs to notify and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment.

To make the data comparable across economies, several assumptions about the worker and the business are used.

The worker:

  • Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.

  • Is a full-time employee.

  • Is not a member of the labor union, unless membership is mandatory.

The business:

  • Is a limited liability company (or the equivalent in the economy).

  • Operates a supermarket or grocery store in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Has 60 employees.

  • Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them.

  • Abides by every law and regulation but does not grant workers more benefits than those mandated by law, regulation or (if applicable) collective bargaining agreements.

Redundancy cost

(i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected.

Employing Workers – Argentina

Details – Employing Workers in Argentina

Hiring

Fixed-term contracts prohibited for permanent tasks? Yes

Maximum length of a single fixed-term contract (months) 60.0

Maximum length of fixed-term contracts, including renewals (months) 60.0

Minimum wage applicable to the worker assumed in the case study (US$/month) 1101.7

Maximum length of probationary period (months) 3.0

Ratio of minimum wage to value added per worker 0.7

Standard workday 8.0

Working hours

Premium for night work (% of hourly pay) 13.0

Maximum number of working days per week 5.5

Premium for overtime work (% of hourly pay) 50.0

Premium for work on weekly rest day (% of hourly pay) 100.0

Restrictions on weekly holiday? No

Restrictions on night work? No

Paid annual leave for a worker with 1 year of tenure (working days) 12.0

Restrictions on overtime work? No

Paid annual leave for a worker with 10 years of tenure (working days) 24.0

Paid annual leave for a worker with 5 years of tenure (working days) 18.0

Redundancy rules

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 18.0

Third-party notification if one worker is dismissed? No

Dismissal due to redundancy allowed by law? Yes

Third-party notification if nine workers are dismissed? No

Third-party approval if one worker is dismissed? No

Retraining or reassignment obligation before redundancy? No

Third-party approval if nine workers are dismissed? No

Priority rules for reemployment? No

Priority rules for redundancies? No

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.3

Redundancy cost

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 8.7

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 8.7

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.3

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 7.2

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 21.7

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 43.3

Unemployment protection after one year of employment? Yes

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 23.1

PEO Argentina

Argentina, known for its rich cultural heritage, diverse landscapes, and passionate people, stands out as a captivating destination for professional employer organizations (PEOs). As a PEO country, Argentina offers a compelling mix of economic potential and a skilled workforce, making it an attractive option for businesses seeking to expand their global presence. The nation’s strategic location in South America facilitates access to neighboring markets and enhances international trade opportunities. With a growing economy that spans various sectors, including agriculture, manufacturing, technology, and services, Argentina presents a fertile ground for PEOs to establish and support businesses in this vibrant and dynamic environment. Moreover, the country’s commitment to advancing labor laws and fostering a business-friendly ecosystem makes it an ideal choice for companies seeking to streamline HR operations and navigate the complexities of the Argentine labor market efficiently. From Buenos Aires’ bustling metropolis to the awe-inspiring landscapes of Patagonia, Argentina offers not only a promising business environment but also a unique and enriching cultural experience for employees and entrepreneurs alike.

PEO services in Argentina offer a practical and efficient solution for international companies seeking to expand their operations into the Argentine market. By partnering with a reputable PEO service provider, businesses can outsource their human resources, payroll, and compliance needs to local experts. The PEO acts as the official employer of record, ensuring compliance with Argentine labor laws and regulations. This simplifies the process of market entry, as foreign companies can avoid the complexities of setting up a legal entity. PEO services also grant access to a skilled local workforce, facilitating cultural integration and smooth operations. With administrative tasks taken care of, businesses can focus on their core objectives and capitalize on the promising opportunities that Argentina offers as a thriving South American economy.

Business Reforms in Argentina

From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by

Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. =Doing Business reform making it easier to do business. = Change making it more difficult to do business.

DB2020

Starting a Business: Argentina made starting a business more difficult by introducing an additional procedure for legalizing the employee books for companies hiring more than 10 employees.

Dealing with Construction Permits: Argentina made dealing with construction permits easier by streamlining procedures and implementing an electronic platform for building permit applications.

Trading across Borders: Argentina reduced the time required for export and import documentary compliance by introducing electronic certificates of origin and improving its import licensing system.

Enforcing Contracts: Argentina made enforcing contracts easier by allowing electronic payment of court fees.

DB2019

Starting a Business: Argentina made starting a business easier by introducing an expedited process for limited liability companies that includes company incorporation, book legalization, tax and social security registration.

DB2018

Dealing with Construction Permits: Argentina made obtaining a building permit more expensive by adopting a new tax law for the city of Buenos Aires.

DB2017

Dealing with Construction Permits: Argentina made dealing with construction permits more difficult by increasing municipal fees.

Paying Taxes: Argentina made paying taxes less costly by increasing the threshold for the 5% turnover tax. Argentina also made paying taxes easier by introducing improvements to the online portal for filing taxes.

Trading across Borders: Argentina made trading across borders easier by introducing a new licensing system for importing, which reduced the time required for documentary compliance.

DB2015

Dealing with Construction Permits: Argentina made dealing with construction permits more costly by increasing several fees.

DB2014

Starting a Business: Argentina made starting a business more difficult by increasing the incorporation costs.

Trading across Borders: Argentina reduced the number of documents necessary for importing by eliminating nonautomatic license requirements.

DB2013

Trading across Borders: Argentina increased the time, cost and number of documents needed to import by expanding the list of products requiring nonautomatic licenses and introducing new preapproval procedures for all imports.

DB2012

Registering Property: Argentina made transferring property more difficult by adding a requirement that the notary obtain the tax agency’s reference value for property before notarizing the sale deed.

DB2010

Starting a Business: Argentina made starting a business easier by eliminating the requirement for registration with the private pension fund and expediting the publication process.

Registering Property: Argentina made transferring property more difficult by adding a new requirement to declare all transactions over 300,000 Argentine pesos.

DB2009

Paying Taxes: Argentina made paying taxes easier for companies by encouraging payment of property and vehicle taxes once a year (rather than every other month).

Employing Workers: Argentina reduced the severance pay applicable in cases of redundancy dismissals

DB2008

Resolving Insolvency: Argentina made resolving insolvency more difficult through an amendment to its bankruptcy legislation aimed at providing greater protection to labor claims and freeing commercial courts from labor actions.

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