A practical framework for foreign companies choosing between an employee, independent contractor, employer of record, branch or Argentine subsidiary.
A foreign company can hire talent located in Argentina, but paying from abroad or using an English-language agreement does not allow it to opt out of Argentine employment law. If the work is performed in Argentina, local mandatory rules may apply. The right structure depends on the reality of the role and the company’s local footprint: a contractor may fit a genuinely independent project; an employer of record can place an employee on local payroll before the company establishes its own entity; and a branch or subsidiary is often the clearer solution once the Argentine operation becomes permanent.
Key point: classify the working relationship before selecting the vehicle. An invoice, an offshore payment or the word “contractor” will not cure a relationship that operates as employment in practice.
Argentine law looks at where the work is performed
Section 3 of Argentina’s Employment Contract Law provides that the statute governs the validity, rights and obligations of employment performed in Argentina, even when the agreement was signed abroad. A Delaware, Spanish or English governing-law clause therefore may not displace Argentine mandatory employment rules for a person who habitually works from Córdoba, Buenos Aires or another Argentine province.
The employer’s nationality does not decide the issue either. Argentine law focuses on the person or entity receiving work under its direction. The practical questions are who organises the role, sets hours and objectives, supervises performance, integrates the person into the business and bears the commercial risk.
Option 1: independent contractor
Best fit: a defined service performed through the contractor’s own organisation, with meaningful control over methods and time, the ability to serve other clients, negotiated fees and genuine business risk.
Main risk: using contractor paperwork for a permanent role that is managed as employment.
Argentina’s 2026 reform changed section 23 of the Employment Contract Law. The statutory presumption no longer applies automatically to certain independent works or services documented with invoices or bank payments. This is important, but it is not a safe harbour for sham contracting. Section 14 still invalidates simulated or fraudulent arrangements, while sections 21 and 22 continue to define employment through actual dependence.
Do not stop at the question “Does the person issue invoices?” Ask whether the person actually operates an independent business. Autonomy is more credible when the provider controls the manner of performance, supplies key resources, may organise a team, negotiates project fees, absorbs costs, serves other clients and is responsible for an agreed result. Fixed hours, practical exclusivity, daily supervision, an internal title and email, permission to take time off, stable monthly pay and no meaningful downside risk point in the other direction.
Older Córdoba decisions remain useful illustrations of the facts courts examine, although their treatment of the former section 23 presumption should not be imported mechanically after the 2026 amendment. In Martínez v. Puig Argentina, Córdoba’s Superior Court reviewed agency contracts, tax registration and invoices against the way the company organised the activity. In Fraire v. Nutrición Profesional, the Labour Court considered instructions, working time, company-provided resources and periodic payment, among other factors.
Option 2: employer of record
Best fit: a foreign company needs one or a small number of Argentine employees quickly, but a local entity is not yet commercially justified.
What it does: a local entity registers the employment, runs payroll, pays social security and provides mandatory employment documentation while the foreign business receives the work.
“Employer of record” is a commercial label, not a separate statutory category under Argentine law. The arrangement must be tested under the rules on labour intermediation and personnel supply. Current section 29 treats the registering entity as the direct employer, while preserving the user’s joint liability for employment and social-security obligations accrued during the actual assignment.
An EOR therefore does not outsource every risk. Due diligence should identify the Argentine employing entity, its registrations, the applicable collective bargaining agreement and classification, payroll and termination methodology, workplace-injury coverage, documents delivered to the employee, allocation of contingencies and contractual indemnities. A long-term payroll provider must also be distinguished from a licensed temporary-services company, which operates under a specific regime.
An EOR can be an efficient market-entry stage. It becomes less attractive as headcount grows, the local team sells or negotiates on the company’s behalf, or the business develops a permanent corporate and tax presence in Argentina.
Option 3: Argentine branch
Best fit: the foreign company itself will regularly conduct its business, maintain a stable team or contract directly with Argentine customers.
Legal effect: the head office remains the same legal person and operates in Argentina through a registered representation.
Section 118 of the General Companies Law permits isolated acts without registration, but requires a foreign company conducting habitual business or establishing a branch or permanent representation to prove its existence, establish an Argentine address and appoint a representative. A continuing local team should not casually be treated as an “isolated act.”
Registration is completed with the corporate registry of the relevant province. Our Spanish guide to foreign-company registration in Córdoba explains the distinction between operating directly under section 118 and registering under section 123 to hold equity in an Argentine company.
Option 4: Argentine subsidiary
Best fit: there will be continuity, several employees, local contracts, Argentine billing, investment or a need to separate the local operation from the foreign parent.
Advantage: the subsidiary is an Argentine legal person that can centralise payroll, commercial agreements, bank accounts, invoicing and local compliance.
A foreign company may own an Argentine company after completing the section 123 registration. The choice between a simplified stock company, limited-liability company or another form depends on ownership, governance, financing, transfer restrictions and province. Speed of incorporation is only one factor; the group should also plan corporate approvals, intercompany services, intellectual property and funding.
Our SAS versus SRL guide provides an initial comparison. When the shareholder is a foreign entity, apostilles, sworn translations, beneficial-owner disclosures, powers of attorney and the foreign company’s prior registration must be coordinated.
Employment compliance and permanent establishment are separate questions
A compliant payroll arrangement does not by itself answer whether the foreign business has a taxable presence in Argentina. The Income Tax Law defines a permanent establishment to include a fixed place of business. It also covers some services lasting more than six months and some agents who habitually conclude contracts or play a principal role leading to their conclusion.
A genuine contractor might not be an employee, yet the company’s activities may still require a tax analysis. Conversely, an EOR does not guarantee the absence of permanent-establishment exposure if the Argentine team represents the business, negotiates customer contracts or performs core revenue functions. Activities, duration, authority, applicable tax treaties and payment flows should be reviewed with Argentine legal and tax advisers.
A decision framework for foreign companies
Defined project and deliverable: a contractor may work when autonomy is real and the agreement addresses scope, fees, intellectual property, confidentiality and termination.
First stable hire: an EOR may provide a quick entry, subject to provider due diligence and a realistic assessment of the user’s continuing exposure.
Habitual activity by the foreign company: a registered branch allows the same legal entity to operate through a local representative and separate accounts.
Local team, customers and investment: an Argentine subsidiary is often a clearer platform for growth and risk separation.
A foreign national relocating to Argentina: immigration status must be addressed in addition to employment. Official guidance confirms that a foreign national holding temporary residence documentation and an Argentine labour ID number may work while the relevant residence process continues.
A practical example
A Spanish software company hires a developer in Córdoba for a six-month, defined project. She sets her hours, serves other clients, uses her own equipment, quotes by deliverable and bears responsibility for corrections within an agreed scope. An independent-services agreement may be coherent.
The company later requires exclusivity, fixed European hours, daily supervision and approval for time off. She also manages two local team members and begins negotiating Latin American customer agreements from Argentina. The original contract no longer describes the facts. The company now faces employment risk as well as payroll, corporate and permanent-establishment questions. The solution is to redesign the structure, not merely rewrite one clause.
Frequently asked questions
Can a foreign company directly employ someone in Argentina? It may assume employer obligations, but registration and habitual-presence issues must be planned first. A local entity, EOR, branch or subsidiary is commonly used.
Does paying in US dollars from abroad avoid Argentine employment law? No. Currency and payment location do not replace the analysis of where the work is performed and whether dependence exists.
Does an Argentine tax invoice eliminate employee-misclassification risk? Not by itself. The 2026 reform changes the section 23 presumption, but a relationship that is dependent in reality may still qualify as employment.
Does an EOR eliminate all liability for the foreign company? Not necessarily. Argentine law preserves user-company liability in personnel-supply settings, and tax presence must be examined separately.
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Herrera & Flamenco Abogados · Córdoba, Argentina