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The Entrepreneurs Law, also referred to as Law 27349, contains a range of measures designed to support the creation of new companies in the country by overcoming bureaucratic obstacles and financial barriers.
What are the main aims and objectives?
Overall, the Entrepreneurs Law aims to create a more favorable environment for entrepreneurship and innovation in Argentina, with the goal of enhancing economic growth and development. Objectives of the law include promoting the creation of new companies, supporting the growth of SMEs, stimulating innovation and technology, increasing employment opportunities and reducing bureaucracy.  
How does the program work?

The Entrepreneurs Law establishes a new type of business entity called the “Simplified Joint-Stock Companies" (SAS in the Spanish acronym). Under this new legal framework, entrepreneurs can create a new company online in just 24 hours, as well as open a bank account and register it before the Federal Taxation Organism. 

In order to promote investments in startups and provide a framework for venture capital activities, the Law also creates the Venture Capital Institutions Registry. The registry is intended to provide transparency and credibility to the venture capital industry and includes information about the registered institutions, such as their investment strategies, target sectors, and investment criteria. This incentive will contribute to federalize Venture Capital investments in Argentina by giving more benefits to less developed Argentinean regions.  

Capital investment contributions made by venture capital investors may be deducted from income tax, under the conditions and in the amounts set forth in relevant regulations, which shall exceed neither seventy-five percent (75%) of such contributions nor ten percent (10%) of the net taxable income for the fiscal year or its proportional amount based on the number of months in operation. 

Additionally, the law establishes a Fiduciary Fund for Venture Capital Development (FONDCE for its Spanish acronym), which offers different financing programs for entrepreneurs and startups listed below: 

SEED FUND PROGRAM 

The objective of the “Seed Fund” is to promote the development of ideas or early stage startups (less than 1 year for startups or less than 4 years for social impact ones). To accomplish this objective the FONDCE gives them a zero interest loan with 5 years repayment term. 

This program is supported by a large number of Argentinian registered Incubators across the country, which help startups to elaborate their Business Plan and prepare a pitch video to apply. 

Each Incubator receives a nonrefundable contribution to help startups to transform their ideas and projects into national and/or global competitive businesses by giving them mentorship, resources, knowledge and access to business networks. 

ACCELERATOR FUND PROGRAM 

The objective of the “Accelerator Fund” is to promote the development of early stage (less than 5 years) technological or scientific based startups. To achieve this goal the program will select accelerators by constituting a Jury formed by experts in Venture Capital. Once the Accelerators are selected, the FONDCE will co-invest in the selected startups for the period of 4 years.   

Each Accelerator also receives a non-refundable contribution to help startups to transform their projects into globally competitive businesses by giving them mentorship, funding, resources, knowledge and access to business networks. 

EXPANSION FUND PROGRAM 

The objective of the “Expansion Fund” is to promote the development of technological or science-based startups which are in the early stage (less than 7 years).   

To reach this purpose, the program selects Venture Capital Trusts via a deliberation of a jury formed by experts in Venture Capital. Once those Trusts are selected the FONDCE gives them 40% of the total amount required (30 million USD each) to complete the investment. 

In addition, each Trust will receive a non-refundable contribution to help startups to transform their projects into globally competitive businesses by giving them mentorship, funding, resources, knowledge and access to business networks. 

CROWDFUNDING SYSTEM REGULATION 

The Law also created the first regulation in a Latin American country for Crowdfunding platforms to promote the investment in startups through that tool.   

The Crowdfunding System encompasses crowdfunding projects submitted on a crowdfunding platform authorized by the Argentine Securities and Exchange Commission and aimed at investors, through any of the forms of participation in crowdfunding projects set forth in section 24. 

What is the overall cost?
The Entrepreneurs Law was passed without any direct financial cost, however, the law does establish FONDCE which is funded by contributions from the national government, provincial governments and other sources. The law provides a framework for the operation of the FONDCE, but no specific information about the fund's current or past spending is available in the given search results.  
How was it implemented?

The Entrepreneurs Law was implemented by the Secretariat of Entrepreneurs and SMEs through the Ministry of Production.  

The FONDCE was created as part of the Argentinean Entrepreneurs Law to promote the development of venture capital in the country by providing financing for startups and early-stage businesses. It operates as an Administration and Financial Trust and is funded by contributions from the national government, provincial governments, and other sources. The fund's investments are managed by professional investment managers with experience in venture capital activities.  

The legislation defines a startup as a newly emerge entrepreneurial and productive venture which challenge is to search for a respectable and scalable business model. By contrast, a scaleup is defined as a development-stage business that is looking to grow in terms of market access, revenues, and number of employees, adding value by identifying and realizing win-win opportunities for collaboration with established companies. As with any capital-intensive company, the financing goal for a scaleup is to reward its investors, either by being acquired via an M&A or via an IPO. 

Each programme (Seed, Accelerator and Expansion Funds) has a time limitation (up to 1 year old, up to 5 and up to 7 years old) but there is no specific reference on the growth of them. If your company has become a "scale-up" company in less than 5 years you can get funds from the accelerator fund programme and also from the expansion fund. 

Generally speaking, the number of investments accelerators provides for companies fits more for a startup and the amount of money a scale-up company may look for fits more with a VC. 

What impact has been measured?

There is currently no available information on the impact of the Argentinian Entrepreneurs Law. The Argentinian government are reportedly tracking several metrics to monitor the impact of the Argentinean Entrepreneurs Law. However, the results of these have not yet been reported. The metrics include: 

  1. Number of new businesses registered: This metric tracks the growth in the number of new businesses registered in the country after the implementation of the law. 

  2. Time and cost of starting a business: The law aims to reduce the time and cost associated with starting a business. This metric tracks the time and cost of starting a business before and after the implementation of the law. 

  3. Innovation and entrepreneurship index: This metric tracks the growth in innovation and entrepreneurship in the country after the implementation of the law. 

  4. Investment in startups: This metric tracks the growth in investment in startups and early-stage ventures in the country after the implementation of the law. 

  5. Employment generation: The law aims to promote job creation by facilitating the growth of new businesses. This metric tracks the number of jobs created by new businesses after the implementation of the law. 

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