Since December 2001 and as a consequence of the financial and economic crisis, the Argentine government put into practice several foreign exchange controls that limit the free flow of foreign currency in and out of the country.
Those controls have been significantly eased throughout the last couple of years.
+ Dividends: free remittance.
+ Debt’s principal and interest: free transfer – at maturity – had the loan been previously informed to the Argentine Central Bank in compliance with applicable Central Bank’s regulations. Extensions shall also fulfill Central Bank’s requirements in order to make free transfers abroad.
+ Imports: free transfer.
+ Exports: exception made of certain situations – such as mining and hydrocarbons exports – foreign currency has to be sold in the local exchange market within a certain term, as set forth by Argentine Central Bank.
Central Bank regulations provide for free transfers abroad of Argentina of up to US$ 2 million. The purpose of such transfers shall be: real estate investments, loans granted to non residents, direct investments of residents, companies’ portfolio investments and other resident’s foreign investments. These investments are identified in the regulations by the name of “Long term foreign assets”.
In order to control the flow of foreign currency into Argentina so as to keep a competitive exchange rate, the Government put into place regulations through which foreign currency brought into Argentina is subject to a 30% withholding by means of a no interest US Dollar-denominated one-year Bank deposit.
+Foreign direct investments (defined as the holding of 10% or more of a Company’s stock).
+Foreign financial indebtedness engaged for the purpose of purchasing non financial assets in Argentina provided that such indebtedness is engaged for a time period not exceeding two years, including in its calculation the payment of principal and interests. The term “non financial assets” means: (i) investments made on fixed assets; (ii) intangibles for mining costs; (iii) research and exploration expenses; (iv) purchase of exploitation rights booked as “intangible assets”; (v) investments in assets similar to intellectual property rights booked as “intangible assets”.
+Investments aimed at the purchase of real estate by non residents in Argentina.
+Indebtedness engaged with multilateral and bilateral credit entities either directly or through their related agencies.
+Other foreign financial indebtedness, aimed at the purchase of foreign currency to cancel principal of foreign indebtedness and/or to create “Long term foreign assets” (as said term is defined above).
+Purchase of goods and services to be registered as inventories provided that those are not financial assets.
