Protecting Myself From Argentina Employment Laws

[GS_Dirtboy]

Hi all.

I work as one of the managers of a subsidiary of a foreign company here. The parent company is based in North America. We, in Buenos Aires, operate as the representative arm of the parent company. This company is big enough to be on the radar here in Argentina (we have 15 employees) but not big enough to have all of the infrastructure and support to which I'm accustomed in my previous international experiences. The last time I ran a foreign operation was in Germany in 2002. In that case, I had a German lawyer and a German accountant sitting on either side of my office to make sure I stayed out of trouble. Here, I don't have that support.

There are three managers in our Buenos Aires offices, of which I'm one. I'm also the most active and could be seen as the acting GM (nobody else takes a leadership role). Our company's GM is actually located in the offices of the parent company and leaves practically all of the day-to-day running of the business and much of the strategy to the three of us (mostly me). That's good, but can be bad so I'm told.

I've been warned by my Argentine business associates that I can be held personally liable for the business. For example, if we have a wrongful termination case I can be named in the case and have my personal assets at stake. Also, if AFIP inspects us and find "inconsistencies", which they always will, I can be held liable.

What is your understanding of this? Any personal experiences with similar situations would be helpful.

Many thanks!

GS

 

[el_expatriado]

You can only be held personally liable if you are a director of a SA or the socio-gerente of an SRL. The directors are only held liable for tax debts if the company is a phantom company that was created for evading taxes. Also, in a labor lawsuit the employees would name you personally as a tactic to get you nervous and cause problems for the company. That kind of thing never flies unless the company is a phantom company that exists only on paper and was designed for doing shady things.

Since you are an executive, your employment contract should personally indemnify you and provide you with legal representation at company expense in the case you are personally sued in connection with your official duties. If there is a conflictive labor environment at your company this will probably happen at some point, so it is good to have the protections in place.

There's not much to worry about as long as your company is going to be defending the lawsuits that appear and won't be disappearing at the first sign of trouble.

A while back I passed you the contact of a lawyer. I would recommend you get an Argentine lawyer (if not mine, another) and have them available so you can consult them on issues like these. You can't be operating here without a local lawyer & accountant. Thinks are very different from the USA, and you can't assume anything. You really do need that local support if you expect to stay out of trouble.

 

[citygirl]

El_expatriado speaks truth. There is NO way you should be operating here without a local accountant and at least having a lawyer here to utilize as required.

Your personal assets certainly wouldn't be at risk with a lawsuit assuming the company is set up correctly and everything is done in white. Nor would you be personally responsible for any inconsistencies with AFIP (ie - responsible as in your personal assets at stake). However, who is preparing your financial statements? Who is signing off on them? Are you a general manager/director of the company here?

Is it an SA or SRL?

 

[GS_Dirtboy]

Thanks for the points. I have a meeting with my lawyer next week (thanks, el_expatriado). This thread is helpful to me to understand the right questions and to begin to formulate a conversation.

1. I am not a Director of the company. I do manage practically all of our local operations.
2. Our company is 100% in white.
3. My exec contract does specify that the company will indemnify me and provide for legal representation.
4. We don't have a conflictive environment.
5. I do have a local lawyer and a local accountant.
6. We operate as an S.A.

From the comments so far it looks like I'm on the right track. Having lived in Argentina since 2006 I have learned to cover my rear from more than one direction. Many thanks!

GS.