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Castro Sammartino & Pierini. Attorneys at Law
 Posted: 1 day ago

 Read time: 0 mins 27 secs

Labor costs in Argentina

Labor costs in Argentina are one of the key issues foreign investors should carefully review when doing business in our country. Following, we will break down the current costs of holding and terminating a labor relationship in Argentina.

1. Salaries

Workers in Argentina
must earn at least the minimum salaries set forth by the collective bargaining
agreement applicable to their particular relationships. Irrespective of the
above ... Should you want to know more, please, read the full article on our Legal Blog.

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Castro Sammartino & Pierini. Attorneys at Law
 Posted: 13 days ago

 Read time: 0 mins 39 secs

Investment incentives in Renewable Energy in Argentina. RenovAr Rounds

Having an enormous potential in this field, Argentina has established as a state policy the generation of electrical energy from renewable sources, aiming at providing a public service and the research for the technological development and manufacturing of equipment for that purpose (Law Nº 26,190, Article 1). And the targets set are very ambitious indeed. Pursuant to Law Number 27,191, renewable energy should supply 8% of the energy demand by December 31, 2017 (Law Number 26,190, Article 2) and 20% of the energy demand by December 31, 2025 (Law Number 27,191, Article 5). To know more, please, read our article in our Legal Blog:Investment incentives in Renewable Energy in Argentina. RenovAr Rounds.

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Castro Sammartino & Pierini. Attorneys at Law
 Posted: 17 days ago

 Read time: 0 mins 30 secs

How to set up a company in Argentina: choosing the vehicle and procedure

Doing business in a foreign country requires a thorough knowledge of the different environments the venture will be immersed in. Within the legal context, to choose the right vehicle to do business is essential for many issues. Following, we will review the basics on how to choose a legal vehicle from the limitation of liabilities and corporate structure standpoint and on how to set up a company in Argentina. To read this article, please, visit our Legal Blog.

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Castro Sammartino & Pierini. Attorneys at Law
 Posted: 30 days ago

 Read time: 0 mins 56 secs

Argentina Business Investment Forum: challenges and opportunities

The first edition of the Argentina Business Investment Forum was held in Buenos Aires from September 12 through September 15 as an initiative of the Federal Government and was hosted by the Argentina Investment and Trade Promotion Agency.

The Argentina Business Investment Forum was aimed to highlight investment opportunities and attract foreign direct investment. Gathering business leaders and government officials from Argentina and all over the world, the Argentina Business Investment Forum served as a springboard for showcasing investment opportunities and entice high-level meetings between Argentinean business, government leaders and international investors and partners.

Our firm had the honor to get an invitation to participate in the Argentine Business Investment Forum, which gave us a close and personal view of where Argentina is heading. A summary of some relevant data will be presented below.

First of all, the forum was an opportunity to have updated key figures and data on the potential of Argentina as an international investment destination, such as: ... read more visiting us at our Legal Blog:http://cspabogados.com.ar/en/argentina-business-investment-forum/.

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Castro Sammartino & Pierini. Attorneys at Law
 Posted: 45 days ago

 Read time: 0 mins 17 secs

Commercial Laws of Argentina

It is our pleasure to
announce that Mario Eduardo Castro Sammartino contributed with the Chapter on
Argentina
in the book “Digest of Commercial Laws of the World”, Release
2016-8, recently published by the international publisher Thomson Reuters. For
more about our works, please, visit us at Publications.

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Castro Sammartino & Pierini. Attorneys at Law
 Posted: 131 days ago

 Read time: 4 mins 18 secs

Mergers and acquisitions in Argentina – Stock purchase agreements: preliminary negotiations and structuring of the transaction

In one of our previous articles, we have covered the basics of mergers and acquisitions in Argentina (see in our Legal Blog: Investments in Argentina – Legal framework, procedures and further issues to be considered by foreign investors). Following, we will explain the procedures to close a stock purchase transaction regarding mergers and acquisitions in Argentina.

Conditions to be a shareholder of an Argentine company

Under Argentine Law, foreign individuals and companies incorporated abroad are guaranteed the same rights than citizens and domestic companies. Except for few regulated activities and transactions, foreign individuals and companies may wholly own the shares of a domestic corporation.

As for foreign companies, a prior registration procedure before the Public Registry is mandatory to purchase stock shares of a company incorporated in Argentina (see in our Legal Blog our article Doing Business in Argentina Foreign Companies Previous Registration).

Structuring of the transaction

Preliminary negotiations

Term sheets, letters of intent and memorandums of understanding are usual practice in stock acquisition in Argentina. Lock-up and voting agreements may also by entered into and legally binding among the parties under Argentine law.The new Civil and Commercial Code (Código Civil y Comercial de la Nación – CCCN), effective as of August 1, 2015, has introduced the regulation of preliminary negotiations (Articles Number 990 through 993). As a general principle, the parties have freedom to conduct preliminary negotiations and leave them at any time (Article Number 990). However, during such preliminary negotiations the parties must act in good faith not to unjustifiably frustrate them, even when no offer has been made (Article Number 991, first paragraph). The parties must also maintain confidentiality of the privileged information disclosed during preliminary negotiations (Article Number 992).

Letters of intent are expressly regulated by the CCCN, in Article Number 993, setting out that the instruments whereby one or all of the parties express their consent to negotiate on a certain basis, limited to matters related to a future contract, are to be construed restrictively and can only have a binding effect as an offer provided that they meet the relevant requirements (Article Number 993).

When drafting preliminary instruments under Argentine law, the parties should be aware of the CCCN´s provisions on partial agreements, to avoid entering into legally binding contracts. Pursuant to Article Number 982, the parties´ consent over the essential elements of a particular contract, executed with the appropriate formalities, conclude the agreement, which will be integrated with the supplementary provisions of the CCCN (first and second paragraph). However, if any doubt arises, the contract will not be deemed concluded (third paragraph); further, minutes or drafts will not be considered partial agreements (fourth paragraph).

Stock purchase agreements: usual content

No imperative or public order provision applies to these transactions under Argentine law. Therefore, the parties are free to agree on the representations, warranties and stipulations they consider appropriate.Among others, the following provisions are normally found in the practice of stock purchases in mergers and acquisitions in Argentina:

a. Protection against hidden contingencies

To protect the buyer from potential undisclosed liabilities of the target company, the parties may agree on escrows, holdbacks or trusts.The CCCN does not specifically regulate the escrow agreement. However, it is considered a warranty deposit agreement as regulated by the CCCN´s Chapter 11.There are no specific regulations regarding holdbacks in Argentina. Complementing the stipulation of holdbacks and as protection for sellers regarding the payment of the withheld amount, it is customary to execute a pledge over the target company’s shares owned by buyer.

To cover from hidden liabilities, the parties may also set up a guarantee trusts, as regulated by Article Number 1,680 of the CCCN.

Regarding the duration of escrows, holdbacks and trusts, the statute of limitations of the different claims that the target company could be liable for should be thoroughly considered. The general statute of limitation term is five years (CCCN, Article Number 2,560). However, different terms apply to tax, labor, social security and other claims.

b. Covenants

As actions the parties or the target company must comply with before or after closing, the parties may agree on any kind of covenants, which will be binding obligations under the general rules of Articles 724 and following of the CCCN.

c. Damages

The parties may stipulate on the liabilities and damages in case any party totally or partially defaults on the obligations assumed in the transaction documents. As a general background, under Argentine law, joint liability is not presumed and must be expressly agreed upon by the parties (CCCN, Article Number 828).

Mario Eduardo Castro Sammartino

Our publications exclusively express the author´s opinion and do not purport to be legal counsel on any case. Should you need it, you must consult with your trusted lawyer or may contact us at your convenience. If you liked the article, please, share it.

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Castro Sammartino & Pierini. Attorneys at Law
 Posted: 147 days ago

 Read time: 0 mins 16 secs

Article on Franchise Law in Argentina

The article on Franchise Law in Argentina, written by Mario Eduardo Castro Sammartino, has been published in International Journal of Franchising Law, Volume 14, 2016, Issue 2 (pages 33 to 35) published by Claerhout Publishing.

Should you need assistance on this subject, please, contact us.

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Castro Sammartino & Pierini. Attorneys at Law
 Posted: 162 days ago

 Read time: 4 mins 4 secs

Investments in Argentina – Legal framework, procedures and further issues to be considered by foreign investors

Investments in Argentina are likely to pick up renewed steam in the near future. A new administration took office in December 2015, putting and end to a 14-year period of strong state presence and populism and is strongly committed to reduce the intervention of the State over the economy and leave far more room for private initiatives and ventures. In line with this new business environment, we will review the legal environment for business in our country.T

he following laws basically set the legal framework for investments in Argentina:

• The General Companies Law Number 19,550 (Ley General de Sociedades - LGS);

• The Capital Markets Law Nº 26,831 (Ley de Mercado de Capitales – LMC) and the regulations of the controlling authority, the National Securities and Exchange Commission (Comisión Nacional de Valores) for companies making public offering of their securities;

• The antitrust provisions contained in Law Number 25,156 (Ley de Defensa de la Competencia - LDC) if applicable to the transaction;

• Specific additional legal provisions for certain regulated industries, such as oil and gas, energy and media and broadcasting; and

• The Law on Transfer of Commercial and Industrial Establishments Number 11,867 (Ley de transmisión de establecimientos comerciales e industriales - LTECI) regulating transactions on going concerns.

Investments in Argentina may be carried out through different legal structures, such as: setting up a brand new subsidiary to start the business or conducting a merger and acquisition operation to purchase either a going concern (asset deal transaction) or the shares of an already existing and active company (stock deal transaction). Choosing the most cost-effective and expeditious structure will depend on not only corporate considerations but also on tax schemes, exemptions and benefits, and assets of the target company, especially when acquiring an already existing ongoing business or company, being such acquisition either an asset deal transaction or a stock deal transaction. As we have already dealt with how to set up a subsidiary company in Argentina, we invite the reader to visit the relevance entry (See our Guide to set up and maintain a company in Argentina on our Legal Blog and successive posts). Following, we will summarily analyze the differences between a stock deal transaction and an asset deal transaction.

Stock deal transaction

The key point to consider here is that the transfer of shares also passes on to the purchaser all the liabilities borne by the target company. Therefore, the due diligence must allow the purchaser to have reasonable assessments of the risks and liabilities. Whether such is the case and the issue of the potential hidden debts may be sufficiently addressed in the contractual documents with the relevant covenants, this way of structuring the deal is easier and less expensive that the asset deal transaction. However and frequently when dealing with small and medium size targets, it may be difficult to reasonable assess contingencies. In these transactions and after conducting the due diligence, it is fairly common to find defective accounting and imperfect tax, labor and social security compliances. Addressing the purchaser' s concerns in these situations will surely mean deferring the payment of a significant portion of the purchase price until the expiration of the statute of limitations or place in escrow such amount for the same period, which all make the transaction far less interesting for the seller. There is when the asset deal structure may present itself as a better alternative.

Asset deal transaction

Under Argentine law, the transfer of an ongoing business as a whole (comprehending its assets, goods, facilities, employees, tangible and intangible property like contracts, trademarks, trade names, patents, goodwill, etc.) is named transfer of a going concern and regulated by the LTECI.Conducting the procedure governed by said law will release the purchaser of all tax and commercial liabilities the seller may have, save for labor and social security obligations. In this latter respect, under Argentine labor laws, the assignment of labor agreements makes seller and buyer jointly liable for all labor and social security obligations related to such employee relationships.In future articles to be posted in our Legal Blog, we will cover the procedures and considerations to be weighed for both mergers and acquisitions transactions: the stock deal and the asset deal.

Mario Eduardo Castro Sammartino

Our publications exclusively express its author´s opinion and do not purport to be legal counsel on any case. Should you need it, you must consult with your trusted lawyer or may contact us at www.cspabogados.com.ar at your convenience. If you liked the article, please, share it.

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Castro Sammartino & Pierini. Attorneys at Law
 Posted: 193 days ago

 Read time: 1 mins 42 secs

Employment contract in Argentina – Introduction

As to the employment contract in Argentina, labor rights in Argentina have constitutional basis and the National Constitution acknowledges the employee´s right to dignified and fair labor conditions, limited working hours, paid rest and vacations, fair compensation, minimum and adjustable salary, equal pay for equal work, participation in the companies’ profits with production control and collaboration in the management, protection against arbitrary dismissal, stability of public servants, free and democratic union organization – recognized by the mere registration in a special record -, collective bargaining negotiations, strike actions and stability of the union´s representatives (Article 14 bis).The employment contract in Argentina is mainly governed by the Contract of Employment Law Number 20,744 (Ley de Contrato de Trabajo – LCT), specific legal regimes applying to certain category of workers (e.g. farm workers, government employees, household staff, travelling salesmen, journalists), collective bargaining agreements (Convenciones Colectivas de Trabajo) entered into and covering different labor fields and the conditions of the individual labor agreements entered into by and between the employer and the employee.Labor laws set forth a so-called labor public order: a number of minimum and basic labor provisions that may be only modified – either by individual agreements or collective bargaining negotiation – in favor of the employee.The LCT is an extensive piece of legislation covering – among others – the following subjects: the contract of employment and the rights and obligations of employers and employees arising thereof, proof period, certain modalities of the employment contract (such as part-time, fixed-term contracts, seasonal employment, casual work), remuneration and protection of wages, hours of work, public holidays and paid leaves, maternity protection, minimum age and protection of young workers and the suspension and termination of the contract of employment.Should you need assistance with the employment contract in Argentina, please, contact us at your convenience.If you like this post, feel free to share it

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Castro Sammartino & Pierini. Attorneys at Law
 Posted: 203 days ago

 Read time: 1 mins 11 secs

Trial costs: foreign plaintiffs in Argentina need not security for costs


As from 1 August 2015, Argentina has in force a new and modern Civil and Commercial Code (the CCCN) setting out many changes as to private international law.The equal treatment of foreign people has constitutional basis in Argentine law (National Constitution, Article Number 20). In accordance with said constitutional protection, the CCCN, in its Article Number 2,610, states that citizens and permanent residents of foreign countries are granted free access to jurisdiction to defend their rights and interests under the same conditions as the citizens and permanent residents of Argentina. Furthermore, it states that no security for costs or deposit may be imposed because of foreign nationality or residency.This CCCN´S new provision enhanced the foreigner´s access to jurisdiction, trumping over the local procedural codes requiring posting a bond to file lawsuits unless the plaintiff was a national from or was domiciled in a country that had signed an international treaty or convention dispensing with the security for costs requirement. As a result of this equal treatment principle before the national jurisdiction, foreign plaintiffs litigating in Argentina will not be required to comply with a security for costs.Should you need assistance to litigate before Argentine Courts, please, contact us at your convenience.If you liked this post, please, share it.