ARGENTINA ISSUES STREAMLINED FOREIGN INVESTMENT REGULATIONS

ARGENTINA ISSUES STREAMLINED FOREIGN INVESTMENT REGULATIONS

Argentina has streamlined its foreign investment law to make the country a more attractive investment location.

The move affects activities ranging from getting capital and profits out of the country to bringing in licenses and patented goods from abroad."Legal certainty is really not an issue anymore," said Cesar Fabian Zaurdo, legal director in the Subsecretariat of Investments, part of the Ministry of Economy and Public Works and Services.

The revisions incorporate changes made since the Law of Economic Emergency was issued three years ago with the 1976 Law of Foreign Investment.

Completed last week and published in the Official Bulletin, they also eliminate prior measures that restricted foreign investors' business activities.

Two provisions of the 1990 economic emergency law allowed foreigners to invest in Argentina without obtaining prior approval and gave equal treatment to foreign and domestic companies.

Now, companies no longer are required to register their investments with the government and can begin repatriating funds immediately by obtaining the necessary currency from any bank, Mr. Zaurdo said.

Previously, foreign companies could repatriate capital, profits and royalties only after keeping their investment in Argentina for three years.

They had to obtain the necessary amounts from the central bank and were given no guarantees for immediate repatriation, Mr. Zaurdo said.

"It could take forever. It could take one week with a good bribe," he said.

Also eliminated by the new streamlining was a tax on profits earned by a foreign company's local subsidiary, and restrictions on the amount of stock a foreigner could buy in a local company, said Carlos E. Campobassi, a staff adviser in the Subsecretariat for Deregulation and Restructuring, also part of the economy ministry.

Previously, foreign investors were restricted to 51 percent of a local company's stock, Mr. Campobassi said.

Investors also need no official approval when transfering technology - such as brand name, license or patented process for a machine - from abroad, Mr. Campobassi said.

After decades of a closed economy, President Carlos Menem began opening Argentina to foreign investment when he assumed office in 1989.

"The country is definitely moving in the right direction," said Felix Zumelzu, executive director of the American Chamber of Commerce in Argentina. ''The problem is continuity and to what extent you can trust in the future."

Last year direct foreign investment in Argentina totaled $549.7 million, down from $774.2 million in 1991 and $888.3 million in 1990, but up from $201.4 million in 1989.

The figures do not reflect investments made in Argentine companies that have been privatized, Mr. Zaurdo said. These investments totaled $7.8 billion as of August 1993. U.S. direct investment in Argentina totaled $2.6 billion in 1989, according to U.S. Commerce Department figures.