Businesses across Argentina are reportedly delaying software license renewals, hoping that the government will soon amend the currency control rule that currently requires them to pay license fees in local currency.
Even though the currency control rules were implemented in April, their effects have become increasingly evident in recent weeks. The Argentine Internet Chamber (Cabase) has urged the government to remove the restrictions immediately, warning that they are shrinking business operations.
Most of the software that Argentine companies use for their day-to-day operations is sold by American firms, such as Microsoft. Most sellers refuse to accept payments in pesos due to the currency’s volatility and the wide gap between the official exchange rate and the black market rate.
Accessing US dollars has been ever more challenging in recent years. Some companies have been using foreign-issued credit cards to pay license fees, while others have been making payments through their foreign offices. However, the government has recently closed this loophole.
Now, all companies that want to use dollars to pay for software licenses must obtain approval from SIRA, the Argentine Import System. Under the law, purchasing or renewing a software license is considered importing a service.
Argentina has long struggled with high inflation and a volatile currency. However, few could have imagined that the country’s volatile currency would one day undermine its technology industry, one of the best in the region.
According to a Spanish news outlet Infobae, only a handful of companies have been able to obtain approval to pay for software licenses in dollars.