Argentina is one of Latin America's most innovative tech hubs and home to several pan-regional 'unicorn' start-ups (ie, start-ups valued at over $1 billion). However, until now, Argentina lacked an adequate legal framework to fund start-ups through venture capital, crowdfunding platforms or seed capital. The absence of clear rules and incentives substantially reduced the financing opportunities for local start-ups, which largely depended on making the right pitch to friends, family or the willing few. In order to boost local financing of new projects, Congress approved the long-awaited Entrepreneurship Law on March 29 2017, which is set to change the start-up environment, technology-related or otherwise.

Entrepreneurship Law

The law generously defines an eligible 'start-up project' as any activity to be undertaken in Argentina by a newly created entity or an entity no more than seven years old. Any individual or entity (governmental, private or mixed) will have the right to fund a start-up, either through a start-up capital institution (ICE in Spanish) or in the case of individuals, directly. ICEs will be created to fund projects with their own or third-party-raised capital.

Investors in start-ups will have the right to deduct up to 75% of their relevant investments from their annual income tax – up to 10% of their net taxable income – provided that any un-deducted excess can be rolled over the subsequent five fiscal years. This is an interesting incentive, which is likely to encourage funding by otherwise uninterested investors.

The Entrepreneurship Law also creates a 30-year government-sponsored fund (ie, the Start-up Fund), which will lend, grant or invest capital in ICEs or start-ups and particularly favours the supply of capital to incubators and accelerators. The Start-up Fund will also be able to grant seed capital to eligible projects.

The new legal framework also provides rules for the creation of crowdfunding platform managers, which will be supervised by the CNV (the local equivalent to the Securities and Exchange Commission). Entrepreneurs will submit their projects to these managers, who will select the projects to be offered to the public. Crowdfunding investments will be made online through equity, convertible loans or interests in a trust. The system is designed to encourage a secondary market where the investors will be able to trade their investments.

The Entrepreneurship Law also creates a seed fund, which aims to educate and finance entrepreneurs willing to set up a project or boost an existing one in its initial stage. The selection will be made through incubators and financing may take the form of grants, soft loans or any other funding mechanisms. Priority will be given to projects with innovation, value or employment generation potential or geographic and productive diversity.

Further, the law introduces the simplified share company, which can be set up online and be operative within 24 hours. This type of company will be available to small entrepreneurs, but also larger companies that may choose the benefits of a more modern legal regime.


These changes are a positive response to a long-existing deficiency in Argentina: clear rules for start-up creation and funding. While the success of these changes will depend largely on the details and implementing regulations (which are expected to be issued in May 2017), the Entrepreneurship Law is a major step towards giving entrepreneurs a dynamic framework in which to develop their ideas.

For further information on this topic please contact Diego Krischcautzky at Marval, O'Farrell & Mairal by telephone (+54 11 4310 0100) or email ( The Marval, O'Farrell & Mairal website can be accessed at

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