Companies Act 19,550 · Article 118 — Company incorporated abroad

Foreign companies: isolated acts and habitual business (Art. 118 LGS)

Article 118 of the General Companies Law sets the framework for a foreign company operating in Argentina. Its existence and form are governed by the law of its place of incorporation; it may perform isolated acts and appear in court, but habitual pursuit of its corporate purpose or establishment of a branch or permanent representation requires registration and compliance with statutory requirements.

Source: Act 19,550

What article 118

Article 118 establishes the foreign-company regime: applicable law governing existence and form, the distinction between isolated acts and habitual business, and the requirements for permanent operations in Argentina.

Official text · Act 19,550, art. 118

A company incorporated abroad is governed, as regards its existence and form, by the laws of the place of incorporation.

Isolated acts. It is authorized to perform isolated acts in the country and to appear in court.

Habitual activity. To habitually carry out acts included in its corporate purpose, establish a branch, seat or any other kind of permanent representation, it must: 1) prove the company’s existence under the laws of its country; 2) establish a domicile in the Republic, complying with the publication and registration requirements imposed by this law on companies incorporated in the Republic; 3) evidence the decision to create such representation and appoint the person in charge of it. If a branch is involved, the capital assigned to it shall also be determined where required by special laws.

Source: Law 19,550, art. 118 — InfoLEG (updated official text)

Commentary

The dividing line is between an isolated act, which does not require registration, and habitual business, which does. Classification is fact-specific: frequency, permanence and scale determine whether the foreign company must register under the third paragraph of Article 118 before the IGJ.

For foreign investors, compliance with Article 118 - or Article 123 when investing as a shareholder in a local company - is the orderly entry route into Argentina. The IGJ has specific rules for these filings, and the regulations in force should be checked before structuring the transaction.

Distinctions often confused

Isolated act (Art. 118, para. 2) is not the same as Habitual business (Art. 118, para. 3). An isolated act does not require registration; habitual business does, including proof of existence, a local domicile and appointment of a representative.

Article 118 (branch / representation) is not the same as Article 123 (participation in a local company). Article 118 governs direct operations; Article 123 governs incorporation of or participation in an Argentine company. They involve different IGJ filings.

Practical impact

Habitual operations without registration expose the foreign company and those acting for it to legal contingencies. Correctly classifying the activity and choosing between Articles 118 and 123 is the first step in structuring foreign investment.

Frequently asked questions

Can a foreign company operate in Argentina without registration?

It may perform isolated acts and appear in court without registration. Habitual pursuit of its corporate purpose or establishment of a branch or permanent representation requires IGJ registration.

What is the difference between Articles 118 and 123?

Article 118 governs direct operations through a branch or representation; Article 123 governs a foreign company’s participation in a company incorporated in Argentina.

This page is informational and does not constitute legal advice nor replace professional consultation. It quotes the official text of the rule; for its application to a specific case, consult a licensed professional.

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