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The Central Bank relaxes access to the FX market for the payment of profits and foreign currency

On January 16, 2020, the Central Bank of the Argentine Republic (the “Central Bank”) by means of Communication “A” 6869 (the “Communication”) relaxed the access to the FX market for the payment of profits and foreign currency.

In this sense, Communication 6869 established that entities may have access to the FX market in order to transfer foreign currency abroad as profits and dividends to non-resident shareholders without the prior approval of the BCRA, as long as the following conditions are met:……..

(i) profits and dividends correspond to closed and audited financial statements;

(ii) according to the distribution decided by the shareholders´meeting, the total amount paid to non-resident shareholders for this concept does not exceed the corresponding amount of Argentine pesos. For this purpose, the entity must have an affidavit signed by the legal representative of the resident company, or a proxy with sufficient powers to undertake this commitment on its behalf;

(iii) the total amount of transfers for this concept, made through the FX market since January 17, 2020, does not exceed 30% of the new contributions value regarding foreign direct investment made in the resident companies that have been entered and settled through the exchange market as of the aforementioned date. To such end, the entity must have a certification issued by the entity that initiated the liquidation stating that it has not issued certifications for an amount exceeding 30% of the liquidated amount;

(iv) access to the FX market to transfer foreign currency abroad as profits and dividends shall take place within a term not less than 30 calendar days as from the settlement of the last contribution that would have been computed for purposes of the above requirement (iii)

(v) documentation supporting the direct capitalization of the foreign direct investment contribution, or the proof of the beginning of the registration process before the corresponding Public Registry of Commerce regarding the decision to definitively capitalize said contributions, must be submitted within 365 calendar days from the start of the process; and

(vi) it must be verified that the client has complied, if applicable, with the “Survey of external assets and liabilities” regime for the operations involved.

Cases not included above will require the prior approval of the BCRA to access the FX market for the transfer abroad of foreign currency for these concepts.

This publication does not offer a legal opinion on specific matters. If necessary, you should seek specialized legal counsel.

For more information please contact:

Sebastián Luegmayer

Email: LuegmayerS@eof.com.ar

Teléfono: (+54 11) 4346 1045

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