Relaxation of foreign exchange restrictions
Special investment account

Since the Macri administration took office in December 2015, several resolutions have been passed to encourage and simplify foreign investments in Argentina. Two recent Central Bank regulations relate to:

  • the relaxation of additional foreign exchange restrictions; and
  • a new bank account regime which makes it easier for foreign financial institutions to invest in Argentina.

Relaxation of foreign exchange restrictions

Elimination of maximum monthly amounts for acquisition of foreign currency
Communication A 6037 introduced new methods through which foreign currency can be acquired and removed the maximum threshold of foreign currency that could be purchased each month. The following methods for the purchase of foreign currency, which used to be subject to prior government approval, are now allowed:

  • direct investments abroad (ie, real estate investment, interest purchases and contributions in companies where the local resident holds over 10% of the capital stock);
  • portfolio investments abroad;
  • the purchase of foreign currency and traveller's cheques; and
  • savings.

Further, the initial maximum amount of $2 million per calendar month, which was later increased to $5 million, has been removed.

Simplified procedure
Communication A 6037 eliminated the need to file documentation supporting:

  • the payment of services;
  • the import of goods;
  • interest;
  • dividends; and
  • non-financial non-produced assets.

Thus, under the new regulation, trades performed through authorised entities will be processed without the need for government approval. Further, the previously required documentation has been replaced by a simple affidavit stating the purpose (ie, the concept code) for the trade being performed.

Before the new regulation was implemented, there was a specific period in which goods had to enter the country following advance payments for their import and evidence thereof had to be provided. This period was removed, but it remains unclear whether an affidavit must be filed with the Federal Tax Authority before any advance payments are made.

Financial indebtedness
Before Communication A 6037 entered into force, Argentine residents had to settle (in the official foreign exchange market) any proceeds from foreign financial indebtedness with non-residents in foreign currencies. In some cases, a 30% mandatory deposit was required. These requirements have been eliminated, even in cases where an Argentine resident intends to acquire (through the foreign exchange market) foreign currency for repayment of capital and interest under said indebtedness. However, the minimum period for indebtedness transferred to Argentina and settled through the foreign exchange market is 120 days from the date on which the funds were settled in the foreign exchange market. Once that minimum period has elapsed, all principal amounts can be repaid or prepaid. This minimum time period is not applicable to the issuance of debt securities negotiated within authorised securities markets.

Inflow and outflow of funds through foreign exchange market
Foreign exchange restrictions on the inflow of funds to Argentina have been eliminated. Similarly, a foreign resident may access the foreign exchange market to purchase foreign currency with the proceeds from the sale of portfolio investments or the collection of interest at any time. The new Central Bank regulations indicate that portfolio investments include:

  • investments in stock portfolio holdings;
  • participations in local companies;
  • investments in mutual funds and trusts;
  • the purchase of loans to local residents by local banks;
  • the purchase of invoices and promissory notes relating to local transactions;
  • investments in local bonds in Argentine pesos or foreign currency payable in Argentina; and
  • other purchases of local credits.

At present, there is no express regulation for the repatriation of funds relating to derivative transactions by non-residents. Thus, the most reasonable interpretation is that they should be considered 'portfolio investments', as this is a broad concept.

Foreign residents must provide affidavits stating that the funds are proceeds from the sale of portfolio investments or the collection of interest. Further, financial institutions require that any foreign currency purchase and sale agreement entered into by a foreign resident is signed by an attorney-in-fact who is an Argentine resident, which limits or increases the cost of foreign residents from entering into these transactions.

Special investment account

The Central Bank has also issued Communication A 6165, which introduced an investment account as a simpler alternative to regular bank accounts. However, this special investment account is available only to certain entities.

Qualifying entities
The special investment account is available to foreign and local investors. However, foreign account holders must be financial entities that are authorised, regulated and subject to appropriate supervision regarding:

  • anti-money-laundering and terrorist funding matters in their jurisdictions of incorporation, which should not be deemed as non-cooperative or high risk in accordance with Financial Action Task Force on Money Laundering recommendations; and
  • financial matters by a supervision agency that has executed a memoranda of understanding with the Central Bank or the National Securities Commission.

Special investment accounts for investors are denominated in Argentine pesos or US dollars. In special cases, the Central Bank can authorise the operation of accounts with deposits in other foreign currencies.

In order to open a special investment account an account holder must file:

  • evidence of its identity, good standing, ownership, control structure and respective authorisation;
  • details of its legal domicile and its email address;
  • a notarised copy of its bylaws and articles of incorporation;
  • a list of administrators and attorneys-in-fact authorised to operate the account, together with supporting identification documents; and
  • a certificate of registration in its jurisdiction of incorporation or Argentina.

Foreign investors not registered in Argentina must file an affidavit stating that they are not subject to registration before the Public Registry of Commerce as they only conduct infrequent business in the country. The account holder or the financial entity that will transfer the funds into the special investment account can provide this documentation in soft or hard copy.

Payments and collections
Payments made through a special bank account for investment can be made only for:

  • the acquisition of private or public securities and monetary regulation instruments issued by the Central Bank;
  • the transfer between accounts owned by the same account holder to the country of origin; and
  • the payment of commission and other account operation cost payments.

Collections and deposits made to the investment account must be done electronically, so that the operations can be traced.

Tax registration
The account holder of a special investment account must be registered with the Federal Tax Administration and have obtained a tax number, including the newly implemented foreign investor tax number.

For further information on this topic please contact Luciano Ojea Quintana or Pablo Gayol at Marval O'Farrell & Mairal by telephone (+54 11 4310 0100) or email ([email protected] or [email protected]). The Marval O'Farrell & Mairal website can be accessed at