Argentina’s Incentive Regime for Large Investments (RIGI)—introduced as Law No. 27,742 on 8 July 2024—is a key strategy of the National Executive Branch aimed at promoting direct local and foreign investment in the country.
The RIGI offers various tax, customs and foreign exchange incentives, as well as certainty and legal security to investors that commit to make “large investments” in Argentina. Businesses benefiting from the RIGI will enjoy guaranteed regulatory stability in tax, customs and foreign exchange matters for 30 years, unaffected by a repeal of the RIGI or the introduction of more burdensome rules.
The following incentives are available under the RIGI:
Law 27.742 specifies the conditions and deadlines to qualify for benefits under the RIGI. Eligible entities include the following:
The deadline to apply for benefits under the RIGI is two years from the date the law entered into force (i.e., 8 July 2024), although the deadline can be extended for an additional year.
Alejandra Sarni
BDO in Argentina
The RIGI offers various tax, customs and foreign exchange incentives, as well as certainty and legal security to investors that commit to make “large investments” in Argentina. Businesses benefiting from the RIGI will enjoy guaranteed regulatory stability in tax, customs and foreign exchange matters for 30 years, unaffected by a repeal of the RIGI or the introduction of more burdensome rules.
The following incentives are available under the RIGI:
- Tax incentives:
- 25% corporate income tax rate (instead of 35%) and after seven years of participating in the regime, a 3.5% dividend tax rate (instead of 7%).
- Accelerated depreciation for certain assets and infrastructure.
- Tax loss offsets without a time limit and the ability to transfer such losses to third parties after five years if they are not offset by taxable income.
- Full credit of amounts paid or received as tax on bank credits and debits against income tax.
- Ability to use tax credit certificates to offset VAT.
- Customs incentives:
- Exemption from import duties, statistical fees, proof of destination, and various national and local tax regimes for importing new capital goods, spare parts, components and consumables.
- Exemption from export duties for goods produced by a special purpose vehicle (VPU), starting three years after the taxpayer began participating in the regime (or two years for long-term strategic exports).
- Freedom to import and export goods for VPU projects without prohibitions, restrictions, quotas or domestic market supply priorities.
- Ability to self-assess import and export duties without prior approval.
- Foreign exchange incentives:
- Gradual lifting of the obligation to enter and settle export proceeds in the Official Foreign Exchange Market.
- Relaxation of certain foreign exchange regulations related to the free availability of foreign currency for VPUs.
- Special foreign exchange regulations for making payments through the Official Foreign Exchange Market, particularly for repaying financial indebtedness and paying profits and dividends to foreign shareholders.
Eligibility Conditions and Deadlines
Law 27.742 specifies the conditions and deadlines to qualify for benefits under the RIGI. Eligible entities include the following:
- VPUs holding one or more phases of a large investment project, with the sole purpose of carrying out investment projects in sectors such as forestry, tourism, infrastructure, mining, technology, steel, energy, and oil and gas. A VPU can be in the form of a corporation, limited liability company, an Argentine branch of a nonresident entity, joint venture, etc.
- In certain cases, suppliers of goods or services with imported merchandise specifically destined for VPUs, solely for obtaining certain customs benefits.
- Involve an investment amount in “computable assets” of at least USD 200 million (or a higher amount set by the Argentine government for specific sectors).
- Ensure a minimum investment in computable assets equal to or greater than 40% of the minimum investment amount in the first and second years of the project.
- Constitute a “long-term” investment as defined by the RIGI.
The deadline to apply for benefits under the RIGI is two years from the date the law entered into force (i.e., 8 July 2024), although the deadline can be extended for an additional year.
Alejandra Sarni
BDO in Argentina