Through Communication A 5850 of Central Bank of Argentina, the initial rules for the normalization of the foreign currency exchange were enacted. Following is a summary of the most important provisions:
- Prior authorization from AFIP (Tax Authority) for the purchase of foreign currency is removed
- Individuals and legal entities are allowed to purchase foreign currency up to USD $ 2,000,000 without prior authorization from the Central Bank, even for simple possession of foreign currency and various other destinations
- The maximum amounts of imports of goods and services are released
- While the documentary requirements remain for payment of services, seeking to establish the existence of the debt and the effective delivery of services, a great facilitation and expediting of these payments is expected
- While the documentary requirements are maintained for payment of services not directly related to the activity of the Argentine client, more flexibility is expected from commercial banks to carry out such payments
- Facilitation of payments for services to affiliated entities, including computer services, professional services, Copyrights, Royalties and other; removing maximum amounts
- Repatriation of investments of non-residents constituted after the release of stocks is permitted, provided that the applicable minimum terms are met
- The so-called “tourist dollar” is deleted. Taxes levied by AFIP regarding the “tourist dollar” and the purchase of tickets and tour packages were also removed
- Prior authorization for transferences due to family support is removed
- Entities authorized to exchange currency may carry out swap transactions and arbitrage among their clients
Meanwhile, Resolution 3/2015 of the Ministry of Treasury and Finance reduced the minimum periods for financial debt to 120 calendar days, from the 365 originally listed in Decree 616/2005, while eliminated the requirement of deposit unpaid by such indebtedness.
Other de facto restrictions that were not supported by written regulations, such as the ban on dividend payments to foreign shareholders shall not be applicable, and more flexible and streamlining of external payments for imports of goods and services are expected. Other limitations on foreign trade, such as the process of previous approval for the importation of goods and services will also be left without effect.
For questions on these topics contact Dr. Palico Millé (palico@mille.com.ar)