Venture Capital 2025

ARGENTINA Law and Practice Contributed by: Manuel Tanoira, Lucía Rivas O’Connor, Luis Merello Bas and Dolores Nazar, TCA Tanoira Cassagne

One of the biggest online marketplace and e-commerce platforms in Latin America went public but did not issue Argentine CEDEARs (Argentine depositary certificates). Instead, investors were required to open accounts with US brokers. This regulatory framework creates a significant opportunity for investors in Argentina. Given the lack of liquidity in the local market, the valuations of Argentine start-ups are very competitive, providing excellent price-quality relationships. Investors can acquire world-class teams for a relatively low cost. Additionally, due to the favourable conditions in Argentina, Brazilian funds, which typically invest only within Brazil, have increasingly started to invest in Argentine start-ups. The lower cost of entry and the quality of teams available make Argentina an attractive destination for interna - tional venture capital. 7.2 Restrictions Evolving Regulatory Landscape in Argentina Foreign venture capital investments in Argen - tina are often discouraged by legal uncertainty, bureaucracy and difficulties repatriating profits. Due to these factors, many start-ups in Argentina choose to raise capital through holding compa - nies in jurisdictions like Delaware, which provide legal security, tax benefits and flexibility. In such cases, foreign investors do not face significant local regulatory restrictions. While foreign investors can invest in Argentine start-ups through a local entity, the regulatory

environment is restrictive, and such investments are typically structured via a holding company to avoid the burdens of local regulations. The key issue foreign investors face is the difficulty in repatriating funds from Argentina. Over the past year, Argentina’s government has taken steps toward gradually relaxing currency and capital flow restrictions. The objective is to eliminate most of these limitations by October 2025, provided fiscal targets are met. These reg - ulatory changes aim to facilitate capital move - ment, including dividend payments and trans - fers from local operations to holding companies abroad, further aligning Argentina with global investment standards. It is important to note that early-stage ven - ture capital investments are rarely affected by these restrictions, as dividend distributions are uncommon in the first years. Moreover, experi - enced teams and investors in Argentina are used to operating in complex environments, often utilising alternative mechanisms to efficiently repatriate funds at real exchange rates through well-structured financial strategies. In this context, Argentina’s combination of exceptional talent, entrepreneurial drive and ongoing regulatory improvements is position - ing the country as a key player in the regional venture capital ecosystem. The strengthening relationship with the US, both commercially and culturally, only amplifies these opportuni - ties, making Argentina a market with enormous potential for forward-looking investors.

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