ARGENTINA Law and Practice Contributed by: Manuel Tanoira, Lucía Rivas O’Connor, Luis Merello Bas and Dolores Nazar, TCA Tanoira Cassagne
To protect investors and ensure good govern - ance, funds include: • preferred returns, often 8%, ensuring inves - tors see gains before carried interest is paid; • investment committees to vet deals and stick to the fund’s plan; • veto rights for limited partners on big deci - sions like strategy shifts; • rules requiring approval for changes in fund direction; and • vesting timelines for carried interest and gen - eral partner shares. These mechanisms balance risk and reward, keeping managers and investors on the same page. 2.3 Fund Regulation Regulatory Landscape for Venture Capital Funds in Argentina In Argentina, there is no specific regulation directly governing venture capital funds. How - ever, a regulatory framework exists primarily for the Incentivo al Capital Emprendedor (ICE) pro - gramme, which provides a specific tax benefit for eligible funds. This framework, though, is not considered a regulation per se but rather a set of guidelines aimed at promoting entrepreneurship. Venture capital funds in Argentina may operate under general commercial law, primarily gov - erned by the Código Civil y Comercial (Civil and Commercial Code), and in some cases, by the Ley de Apoyo al Capital Emprendedor (Law of Support for Entrepreneurial Capital). The ICE programme’s legal provisions are mainly relevant when seeking tax benefits and require the fund to comply with a set of specific conditions.
Furthermore, the funds must operate as a fide - icomiso (trust). They are subject to general com - mercial law and require the appointment of a trustee and the establishment of a governance structure. 2.4 Particularities Venture Capital Funds in Argentina Argentina’s venture capital scene features a mix of private and corporate players, though gov - ernment-backed efforts have decreased. Private funds like Newtopia, backed by family offices, athletes and entrepreneurs, focus on local start- ups, while The Yield Lab Latam, Xperiment, Innventure and Pampa Start target agtech. Other VC funds such as SHEFA Ventures, Alina VC, Cometa and BYX Ventures also play a funda - mental role in the LATAM VC ecosystem. Government support has shrunk, with initiatives like the Fondo Semilla (Seed Fund) and FONDCE (National Entrepreneur Capital Fund) fading under recent administrations. Some provinces, such as Córdoba, keep co-investment alive on a smaller scale. Meanwhile, corporate venture capital is on the rise, driven by tax incentives and firms like Nestlé and Bimbo reinvesting profits into innovation. ESG principles now shape most funds in Argen - tina, blending impact with profit motives. Also, with exits scarce, funds are stretching holding periods, sometimes to ten years, using secondary vehicles or helping start-ups land cli - ents to boost short-term revenue.
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