The legal culture of Argentina is changing. Written contracts where almost non-existent in pre-globalization Argentina. Contracts were verbal and accepted as the norm owing to the philosophy that a man's word was bonding. Even to this day, verbal contracts are accepted but due to the complexities of exchanging technology and trade processes, written contracts are necessary. ii. Also, gone is the era of restrictive tariffs and cutthroat competition between neighboring trade partners and other nations seeking to do business in Argentina. This began with the foundation of MERCOSUR.
"Since 1995 full members trade almost all items with no duties, and have established a common external tariff scheme. Associate members enjoy trade preferences and are gradually converging towards full member status" (Author not cited, 2000, p. 1). iii. In times before intense globalization property ownership by foreigners was prohibited. This has also changed. "Foreign and domestic investors have free and equal rights to establish and own businesses, or to acquire and dispose of interests in businesses without discrimination. Secured interests in property, including mortgages, are recognized and common in Argentina.
Such interests can be easily and effectively registered. They also can be readily bought and sold" (Author not cited, 2002, p. 3). iv. Other practices that were the business norm have changed as well. Among these changes are patent-right, trademarks and trade processes that are now better protected. The phrase "better protected" is used because Argentina still needs some progress in this area. "Argentina has no specific law on trade secrets, although penalties for unauthorized revelation of secrets are applied to a limited degree under commercial law" (Author not cited, 2002, p. 3).
Argentina is making huge steps to encourage FDI. Their currency (Argentinean Peso) is relatively stable due mostly to the fact that its central bank is in control of setting its value. "Under the Convertibility Law of 1991, the Central Bank of Argentina maintains the value of the Argentine Peso at one-to-one parity with the U. S. dollar in free market conditions. Legislation enacted in June 2001 calls for a move to back the Peso with the Dollar and the Euro (value equal to the arithmetic average of the two currencies), but only after the Euro reaches parity with the American dollar" (p.3).
vi. Repatriation of invested funds has also been provided for in legislation by Argentina's legislature. In accordance with Article 3 of Decree 1853/93, foreign investors may, at any time, repatriate capital and remit earnings abroad. (P. 3) Decree 1853 has also removed all restraints on foreign investment. Foreign entities may own 100 percent of Argentine companies and may repatriate capital and remit profits back to the home country without limit. In general Argentine laws, regulations, and policies do not interfere at all with foreign investment.
Finally, another factor that in times past has been of major concern to foreign investors was expropriation or nationalization of investments or facilities. Argentina has entered into agreements with trading nations providing that this practice will not take place. The Argentine Government has not resorted to expropriation in recent years. Article 4 of the U. S. – Argentina Bilateral Investment Agreement states that investments shall not be expropriated or nationalized except for public purpose upon payment of prompt fair-market value compensation. (Author not cited, 2000, p. 1).