[ESTABLISHING A BUSINESS ENTITY IN ARGENTINA]
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Municipal tax: city councils apply different taxes which usually amount to 0,5% or 1 % of the
gross income of the company. 4. Outline of Labor Regulations.
Argentina has a clear pro-employee labor legislation. The usual practice in Argentina regarding labor agreements is to use verbal agreements (as opposed to written agreements) for indeterminate duration, whose main conditions (wages, initial date, etc.) are registered with the tax authorities and in the company’s registry. Lack of registration of the employees is considered labor fraud. Wages must be paid by way of a wire transfer to the employee’s bank account. Dismissals require paying a severance compensation, which amounts to one monthly wage per year of seniority or fraction exceeding 3 months, in addition to one or two monthly wages of as pre-notice. Failure to comply with Argentine labor laws could result in labor fraud penalties imposed on the employer and payable to the employee (e.g., 25% of all amounts irregularly paid) in addition to the social security and tax contingencies of the employer vis a vis the Tax Authorities.
ILN Corporate Group – Establishing a Business Entity Series
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