A guide to the legal framework in Argentina



In accordance with its constitution, Argentina is a federal, democratic republic operating with a three-branch government, namely the executive branch, the legislative branch and the judicial branch. The president of Argentina is both the head of state and the head of the government who exercises executive power. Legislative power is vested in both the executive branch and the National Congress, while the judiciary is independent from both the executive and the legislature branches.

Structure

The executive branch is represented by the president, who is elected through a direct vote and may serve for two consecutive four-year terms. Following the second term, an intermediate four-year term must elapse before an individual may be elected again as president. The president is responsible for exercising the administration of the country and is advised by the chief of the Cabinet of Ministers.

The legislative branch is represented by the National Congress, which is bicameral and composed of the 257-seat Chamber of Deputies and the 72-seat Senate. The members of the Chamber of Deputies are elected through a direct vote using proportional representation based on the population of each of the 23 provinces and the Autonomous City of Buenos Aires. The members of the Senate are also elected through direct vote, with each jurisdiction – the provinces and the Autonomous City of Buenos Aires – being represented by three senators.

The judicial branch comprises the federal and provincial courts, which includes the lower courts, appeal courts and local supreme courts. The Federal Supreme Court of Justice is the highest court in the country and has exclusive and original jurisdiction in cases involving ambassadors, public ministers, consuls and those in which Argentine provinces are a party thereto.

Pro-Investment

Foreign investments in Argentina are generally protected by the national law. Article 20 of the Argentine National Constitution states the principle of equal rights and treatment between foreigners and nationals, while Article 75, subsection 18 of the National Constitution also provides for the promotion of foreign investments in the country. The Foreign Investments Law promotes and attracts foreign investments to the country.

The new administration of President Mauricio Macri that took office in December 2015 has expressed its intention to shift policy towards a pro-business model, enacting reforms in the legal framework in order to promote investments and lift previous restraints.

Reforms

Changes to the political, economic and legal framework since December 2015 have triggered a renewed interest among foreign investors looking for opportunities in Argentina, as regulations are making the investment regime more flexible.

President Macri’s government has enacted several laws to boost private activity and economic development, including a comprehensive tax reform; promulgating the Productive Financing Law with reforms to Capital Markets Law; corporate criminal liability regime; pension reform; a renewable energy investment plan; the enactment of a legal framework applying to public-private partnerships; and a Promotion to Entrepreneurial Capital Law which provides a new corporate vehicle (the simplified stock corporation). Additionally, the government has several reforms in mind such as a change in the labour laws, the electoral regime, anti-corruption laws, and in the criminal code. The government intends these measures to attract and promote investments in all areas of the economy.

These changes to legislation are contributing to the country’s economic growth and have already helped to achieve the reclassification of the MSCI Argentina Index from frontier market to emerging market status. Argentina is now seen as an attractive investment destination due to openness to foreign ownership, efficiency of operational system, competitive landscape and stability of the institutional framework.