According to an article published by Joaquín Garau in the magazine Apertura and sources of the Argentinian Secretary of SMEs, an entrepreneurs’ law that comprehends the needs of entrepreneurs and enables them to start projects more easily is being developed.

The Ministry of Production, through the Secretary of SMEs (SePyme), is about to introduce a bill which has the support of the Argentinian Association of Entrepreneurs (ASEA).

The key points of the project include the creation of a new kind of company, the possibility of paying employees with shares that shall not be included in the Profits Tax, and the chance of “making” companies in 24 hours.

The Company by Simplified Shares (SAS) is a model that can be created online in one day and have just one partner. Among the advantages it offers there is a very interesting one: if the entrepreneur adds one partner, there is no need to modify the type of partnership.

Entrepreneurs will have their CUIT (identification code) in 24 hours and the SAS will have its bank account within the same period of time. The CUIT will be available in 24 hours by providing a temporary address. Then, the partners will have between 6 and 12 months to change it and provide a definitive address.

In the United States, it is common for companies to pay their employees with shares as they reach their goals. In Argentina, payment with shares is included in the Tax for Profits, as these shares have remunerative nature. The bill considers what is known as Stock Option. Employees have the chance of acquiring shares at a certain value during a period of time. Frequently, this alternative is used in startups. It also considers corporate contributions, a concept currently included in the Tax for Added Value (IVA). The project considers postponing the payment of IVA to a future sale of the company’s shares.

As regards the trial period at work, the project suggests to extend it from 3 to 12 months for SAS.

As regards financing, should the bill pass, the National Agency of Social Security (ANSES) would be responsible for providing a percentage of its annual income to investments, in order to provide liquidity to the Entrepreneur Capital Entities. It also considers crowdfunding.

Another important addition is “Digital Pro formas”. With the Digital Pro Forma invoice, SMEs could issue Pro Forma invoices and send them to their clients in order to process payment without creating tax debit nor credit.  The IVA cannot be taken until the client does not pay, avowing the client to get financing from the SME and the State being paid a tax for a concept that has been paid yet.  If 120 days go by and the still unpaid pro forma becomes an invoice, and the SME enter the corresponding IVA, the client cannot take tax credit until the invoice is cancelled.

Finally, the bill considers sustainable companies. It defines them as those companies that, “without forsaking profit through production or exchange of goods or services, its primary object is to solve social and/or environmental problems and have a positive impact on those areas for the community.”

There are four keys to characterize a company as sustainable:

“The corporate purpose must expressly consider the company’s mission to be focused on solving a social and/or environmental problem specifically determined there.”

“The social contract must foresee necessary measures to ensure that the company’s decisions seek to achieve long term goals in the environment and society, while diminishing any negative effect.”

 “It must go through annual audits and certifications by an organization that is independent to the company”.

“They must be registered in the Unique Registry of Sustainable Companies that is being created in article 49 of the bill”.

Clearly, a very interesting bill that, if passed, shall accelerate the investment process and provide support to the talented Argentinian entrepreneur ecosystem.