a. How the Use of One or More Independent Contractors Creates a Permanent Establishment in Country and the Ramifications
The use of one or more Independent Contractor does not create a permanent establishment in the country.
Indeed, foreign companies usually execute Independent Contractor agreements without local presence in Argentina when they need an individual to render services for them locally.
It is important to point out that in order to establish a local presence in Argentina, a special procedure must be complied with (further details of such procedure will be explained below).
b. How the Employment of One or More Individuals Creates a Permanent Establishment in Country and the Ramifications
In order to be registered as an Employer before the Register of Commerce, the company must establish a local subsidiary or branch.
While foreign companies are governed as to their existence and form by the laws of its country of incorporation, when settling a branch in Argentina, they must be registered in the Public Registry of Commerce. Otherwise, it is not possible to register as an Employer.
Procedure before the Public Registry of Commerce: At this first step the company must submit a series of corporate documentation required by such Registry considering the type of company that is intended to incorporate.
As for timing concerning the process of incorporating a local branch or subsidiary before the Public Registry of Commerce it usually takes from 1 to 2 months, depending on whether the Public Registry of Commerce makes any observation to the filling and requires further clarifications.
Procedure before the local tax authority (“AFIP”): Once the registration process before the Register of Commerce is done, the company must register as an Employer before the AFIP by filing in a form. The legal representative must do such procedure.
Once this is completed, the company will be able to obtain a tax code to run their business before the AFIP and with such code it will be able to register as an Employer. This procedure will take approximately 2 weeks.
Procedure before the local social security authority (Administración Nacional de Seguridad Social –ANSeS -): The ANSeS is the national agency responsible for Social
Security policies. Among its functions are granting pensions, family allowances for active workers and retired ones, unemployment benefits and implementing various programs of Social Security. Employers, when hiring Employees, must take the deductions and contributions to the social security system into account.
Procedure before the National Direction of Personal Data Protection (DNPDP): The National Direction of Personal Data Protection (Dirección Nacional de Protección de Datos Personales – DNPDP-) is the national authority that controls the traffic of personal
The DNPDP has under its supervision the Register of Data Base, an instrument created with the aim to control the traffic of personal information.
It handles any complaint that an individual files due to an inappropriate use of his/her
In this sense, its function is to investigate whether the database complies with the
principles established by law and other regulations.
The DNPDP informs about:
• the existence of a database;
• why that database requires that information and what is its aim; and
• the name and address of the individual responsible for the database.