On January 16, 2020 the Argentine Central Bank issued Communication “A” 6869 (the “Communication”). The Communication relaxed the rules for the purchase and transfer of foreign currency for the distribution of profits and dividends in foreign currency to non-Argentine shareholders.

Pursuant to the Communication, non-Argentine shareholders may access the local foreign exchange market (the “FX Market”) for the distribution of dividends and profits without prior approval of the Argentine Central Bank, provided that:

  1. Profits and dividends shall be evidenced in audited financial statements;
  2. The aggregate amount paid to non—Argentine shareholders shall not exceed the equivalent in Pesos approved by the relevant shareholders´ meeting;
  3. The aggregate amount of distributions paid through the FX Market as of January 17, 2020 shall not exceed 30% of the value of the new foreign direct investment contributions made as of such date in the Argentine company that have been repatriated and converted to Pesos through the FX Market.
  4. The payment may not be made before 30 calendar days from the repatriation and conversion to Pesos of the last capital contribution made to the company, as requested in section 3 above.
  5. The client shall provide evidence that the equity contribution has been capitalized. Alternatively, the client shall provide evidence of the filing of the request for capitalization with Public Registry of Commerce (which shall be obtained within 365 calendar days from the filing).
  6. If applicable, the relevant direct investment shall have been registered with the Argentine Central Bank under the Foreign Assets and Liabilities Reporting Regimen (“Relevamiento de activos y pasivos externos”).

For more information, do not hesitate to contact Marcelo R. Tavarone, Federico M. Salim, Julieta De Ruggiero or Francisco Molina Portela.