Once you obtain residency in Argentina, are you authorized to work in all MERCOSUR countries?

I lived two years in Brazil and at that time it wasn't easy to become a resident. My sister lives in Brazil for 20 years now and she ended marrying her Brazilian life time partner in order to avoid having residence problems every now and then.
 
No.
Even argentinos nativos should ask for a residence in each Mercosur country to do so.
 
As this applies to citizens of Argentina getting residency in Brazil (without actually living there?), I assume that would entitle them to work in Brazil, but it raises a separate question: As a citizen of a non-Merorsur country, can a foreigner (like Fiscal) apply for and receive a residence permit in Brazil that would entitle them to live and work in Brazil without waiting two years (in other words, without becoming a citizen)?

He can, but it is very difficult. Except for Mercosur citizens, Brazil is not particularly immigration-friendly.

Unless you are married to a Brazilian citizen, your options are either a pensionista visa for which the requirement is US$2,000/month, or to start a business which either has a startup capital of at least US$50K or employs at least 10 Brazilian citizens. For Brazilian companies it is also not that easy to offer foreigners a work visa; the process is more bureaucratic than Argentina's and immigration law typically requires they have a certain % of Brazilian nationals in their workforce before they can hire a foreigner.

Back in the days when Brazil was doing very well and the rest of the world wasn't (9 to 5 years ago), many Spaniards and Italians were even denied entry at the airport and sent back to Europe. This is anecdotal, but I even know a few cases like a Spanish citizen paying a Brazilian cleaning lady to marry him so he could stay in Brazil, or a mixed Spanish-Brazilian couple who started a company and went through bureaucratic hell for years so they could bring the woman's Spanish adult son to Brazil. Of course, the tide has now turned but immigration law hasn't changed much.

Again, for Mercosur and especially Argentinean citizens it is a different story (I am making a distinction here because Argentina had a pre-existing bilateral agreement with Brazil which is still valid and allows Argentines to obtain permanent residency without going through the temporary residency stage other Mercosur citizens have to go through). You still need to request residency but you can do it at a consulate or even in Brazil if you entered as a tourist, and it is highly unlikely they won't grant it. Then again, this is mainly an administrative process that even EU countries have with each other; e.g. if you are a French citizen and want to stay in Spain for more than 3 months, you still need to go to the authorities and show them either a work contract or else around €7,000 in a bank account and private health insurance. Of course, because there are no borders, you can otherwise stay as long as you want and you will never be there "illegally," but this would in theory be due to the Schengen agreement and not the EU, which is a different story.
 
No. Residence/work permit agreements are based on nationality, not on resident status.

Same happens in the EU; if you are not a EU citizen but you're a legal resident in a EU country (even if you have permanent residence) you are only allowed to work in that country, and NOT in any of the other 27. You will be able to travel freely as a tourist to any Schengen-area country, though.

For some Mercosur countries, for example Brazil, even if you become a naturalized Argentine citizen you have to wait 2 years to be able to obtain a Brazilian residence permit. In other words, natural-born Argentines are able to obtain Brazilian residence immediately, but naturalized Argentines have a 2-year wait from their naturalization date before they can apply.

Just to edit this: the wait period to apply for Brazilian residency for naturalized Argentine citizens is 5 years, not 2.
 
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