Entrepreneurs in Argentina will be able to register a new simplified form of company online within 24 hours from September 1.
It follows new regulations gazetted by the country's inspector general (IGJ) for the registration of simplified joint-stock company (SAS) on Thursday July 27.
The measure forms part of a number of others contained in Argentina’s new Entrepreneur Law approved by the senate in March.
The government hopes in time to allow 24-hour online registrations for all forms of companies.
The introduction of the SAS form will be the second business type that the country now allows for registering a business within one day, as the IGJ has since July 12 permitted a 24-hour online registration of a limited liability companies (SRLs).
Registration is through the IGJ’s website under the section for electronic registration.
Officials reported this week that registrations for SRLs have already climbed 50% since the introduction of the online measure.
The SRL differs from an SAS in that the SRL that requires the registration of least two partners. To register as an SAS requires only a single partner, with a minimum capital of two minimum wages, to receive a tax number and bank account in one day.
Among world's worst
Presently Argentina is one of the most difficult places to open a business. It is ranked by the World Bank at 157 out 190 countries when it comes to registering a business and takes on average 40 to 60 days to register a business.
However earlier this month the Inspector General of Justice, Sergio Brodsky (pictured above) said the changes will allow Argentina to climb the World Bank’s rankings, but only in next year’s report as the rankings are published in October and the study was conducted in May when the provision was not yet in force.
The measure is in line with a similar one enacted in neighbouring Chile in 2013, which allows for online registration in one day (see this earlier post).
In April statistics from Chile’s Ministry of Economy revealed that 72% of the 8,810 business registrations in Chile that month were performed online. The figure has climbed from just 29% of registrations in May 2013 when the measure was introduced.
Online registrations in Argentina could see similar growth. Under the new Entrepreneur Law the government has proposed the introduction of an incentive that allows investors to have 75% of any investment in an SAS company or SAS accredited investment fund tax-deductible for up to 10 percent of the investor’s annual profits.
Investors who choose to invest in less developed areas, with lower access to capital, will be able to deduct up to 85%.
Likely for this reason the government in March (when officials estimated the measure would be introduced within two months) projected that more than 40% of the new companies created this year will do so under the SAS form.
New Entrepreneurs Law
Argentina’s new Entrepreneurs Law also contains a number of other measures. These include:
The biggest threat however is the country's politics, which have long see-sawed between one extreme on the left, to another on the right. Yet if things are kept in check the world will once more be looking at Argentina with interest.
Timm is a South African who writes on small business. Click here to sign up for the monthly Small Business Insight newsletter.
Stephen Timm is a