Company with its seat or principal purpose in the Republic (art. 124 LGS)
A foreign-incorporated company whose seat is in Argentina or whose principal corporate purpose is intended to be carried out there is treated as a local company for formation, amendment and supervision purposes.
What article 124
Article 124 determines when a foreign-incorporated company is treated as local because its seat or principal corporate purpose is in Argentina.
A company incorporated abroad that has its seat in the Republic or whose principal corporate purpose is intended to be carried out therein shall be regarded as a local company for purposes of complying with the formalities of incorporation or amendment and supervision of its operation.
Source: Law 19,550, art. 124 — InfoLEG (updated official text)
Commentary
Article 124 is a mandatory rule aimed at formally offshore companies that are in substance Argentine. If the real seat or principal purpose is in Argentina, local formation formalities and Argentine regulatory supervision apply.
The IGJ has actively applied Article 124 to foreign companies lacking genuine activity in their country of origin. Foreign investment structures should therefore assess recharacterization risk in advance.
Distinctions often confused
Practical impact
Using a merely formal foreign company to operate in Argentina may result in recharacterization as a local company, with corresponding registration and supervision obligations.
Frequently asked questions
When is a foreign company treated as local?
Is incorporating abroad enough to avoid Argentine company law?
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