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Argentina Routes to Market

So you've decided to expand your business in Argentina and researched your market. Now it's time to decide how you will register and set up a business in Argentina. What is the best, most viable option for your company, your products, and yourself. Which is the path of least resistance?

Here are your typical options. According to the law there are six types of companies that, at the moment of setting up a business in Argentina, can be established in the country:

• Sociedad Annima (SA), which is tantamount of the British private companies limited by shares
• Sociedad de Responsabilidad Limitada (SRL), i.e. private companies limited by guarantee
• Sociedad Cooperativa, i.e. free associations of members with a common social, economic and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise (cooperative)
• Sociedad en Comandita Simple (SCS), which are partnerships limited by guarantee
• Sociedad en Comandita por Acciones (SCA), i.e. partnerships limited by shares
• Sociedad en Nombre Colectivo (SNC), in which all the members share risks and capitals on unlimited basis

Argentinas law is complex and changing. It is strongly recommended that legal advice be taken before incorporating a business in Argentina or entering into any contractual arrangement.

Licensing

Licensing is the permission for someone else to use your intellectual property rights: either a patent, trademark, trade secret, or copyright. Different types of license include:

• Non-Exclusive License - A non-exclusive license implies that your intellectual property rights can be awarded to more than one licensee.
• Exclusive License - A little more complex because, although the license may not be exclusive to one licensee, it may be exclusive to a geographic location, a certain product, or limited area of use. For instance, you may grant a licensee exclusive use of the rights in France, yet grant another licensee its use in Germany.
• Patent License in Argentina - The allowance of another party to use your patented product, design or process.
• Trademark License in Argentina - Trademark licensing means permission is awarded to a licensee to sell a product or service. However, the licensor retains more control in order to ensure that quality is maintained. Quality control is in place to uphold the image of the brand / product / service / licensor, and therefore sustain customer confidence and satisfaction.
  

Franchising In Argentina

Franchising is the licensing out of a business name, product, technique, philosophy, trademark, etc, for a percentage of the income. Instead of setting up new outlets as part of your expansion, you license your existing business blueprint out to franchisees who then set up and manage it for you.

The benefits of expanding a business in Argentina in the form of franchising include: more freedom, as the franchisee takes on major responsibilities; minimal expense; lower cost and higher profits; potential for fast growth; brand building.

Disadvantages of franchising a business in Argentina: although few, rely predominantly on your franchisees. They include: poor quality franchisees; franchisees not declaring all income; poor performance.

Franchising in Argentina represents 20% of the total retailer sector, accounts for more than 13,000 retail stores, and employs more than 100,000 employees. Furthermore, the national franchising association (Asociacion Argentina de Franchising), an organization affiliated with the International Franchise Association, estimates that the sector will continue to enjoy strong growth.

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