ARGENTINA Law and Practice Contributed by: Manuel Tanoira, Lucía Rivas O’Connor, Luis Merello Bas and Dolores Nazar, TCA Tanoira Cassagne
disputes. Covenants limit structural or business shifts without approval. Breaches trigger arbitra - tion, preferred for speed, especially under for - eign law, or commercial court action, ensuring recourse aligns with the deal’s scope. Representations and warranties typically include aspects such as: • corporate structure – confirmation regarding the existence of subsidiaries, cap table distri - bution and the legal standing of the company; • intellectual property (IP) – ensuring that intel - lectual property rights are properly registered and that there are no infringements; • employees – confirmation regarding employ - ment contracts, benefits and any ongoing disputes related to employees; • litigation – verifying that there are no ongoing lawsuits or potential legal threats that could affect the company’s viability; and • covenants – which include obligations of the company throughout the duration of the investment, such as: no changes to the corporate structure without investor approval; and protection against significant changes in the business, such as alterations in the busi - ness model or the sale of key assets. Regarding financing rounds, SAFE agreements tend to have a lighter scope in terms of repre - sentations and warranties compared to equity rounds, where more detailed obligations and commitments are included. However, both types of instruments share a similar structure regard - ing the parties’ obligations. In the event of a breach of these representations, warranties or covenants, remedy mechanisms or compensation provisions are typically set out, which generally involve:
• arbitration – in many cases, arbitration is pre - ferred over ordinary courts, especially when the contracts are governed by foreign law. This mechanism allows for quicker and more efficient dispute resolution; and • legal action – if arbitration is not viable or preferred, commercial courts may be used, either locally or internationally, depending on the circumstances. 4. Government Inducements 4.1 Subsidy Programmes Government Initiatives and Tax Considerations Programmes supporting growth company financing Argentina’s government offers slim support for equity financing. The Ley de Apoyo al Capital Emprendedor (Law of Support for Entrepreneur - ial Capital) once backed the Fondo Nacional de Capital Emprendedor (FONDCE), but recent cuts have axed this fund, leaving only the Incentivo al Capital Emprendedor (ICE) tax incentive for corporate income tax relief. Provinces like Bue - nos Aires City, Córdoba and Santa Fe provide smaller-scale tax breaks and incubator support, though these lean more toward guidance than cash. Private accelerators and angel investors often step in where public funding falls short. Argentina has limited government support for equity financings in growth companies. How - ever, there are a few programmes and initiatives aimed at fostering entrepreneurial capital and supporting early-stage companies. • Ley de Apoyo al Capital Emprendedor (Law of Support for Entrepreneurial Capital): The 27.349 Law established the Fondo Nacional de Capital Emprendedor (FONDCE), aimed
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