Argentina’s new investment framework: Unlocking major economic opportunities
Argentina's Regime of Incentives for Large Investments (RIGI) offers a transformative opportunity for investors with its extensive benefits and long-term stability. Designed to attract major investments, RIGI supports key sectors while ensuring a predictable and supportive investment environment.
The new regime is designed to attract major foreign direct investments, worth more than $200 million, in key sectors like energy, technology, infrastructure, and mining. This initiative aims to boost economic and technological development, create jobs, and offer investors long-term legal certainty.
RIGI offers comprehensive incentives, including customs, tax, and exchange benefits. Investors can import capital goods, machinery, and components without import duties, with a simplified process for certification and approval. The regime also grants free foreign trade by removing direct restrictions, such as quotas and prohibitions. Tax benefits include partial or total income tax exemptions, VAT refunds, and accelerated asset depreciation, reducing fiscal burdens and enhancing profitability.
Additionally, RIGI guarantees foreign exchange stability, allowing free availability of export proceeds after two to three years and facilitating exports by exempting certain duties and removing the repatriation of export earnings requirements.
A key feature of RIGI is its 30-year legal stability. That means investments under RIGI have a guaranteed set of benefits, even if other laws or regulations change. This predictability is crucial for large-scale infrastructure and energy projects.
Key legal and economic considerations of RIGI include its prohibition of direct restrictions on imports and exports, though indirect restrictions are not covered. The regime aligns with corporate social and environmental values. In the event of disputes, RIGI provides a 60-day negotiation period and options for arbitration through international bodies, ensuring a fair and transparent resolution process.
Compared to investment incentives in neighbouring Brazil and Chile, Argentina’s RIGI stands out for its comprehensive benefits and flexibility. While Brazil focuses on infrastructure and Chile on underdeveloped areas, RIGI provides broader legal guarantees and sectoral coverage.
In summary, RIGI offers a compelling opportunity for investors in strategic sectors. However, thorough risk assessments and professional advice are crucial due to the evolving regulatory landscape. With its long-term stability and significant fiscal advantages, RIGI positions Argentina as a leading investment destination in Latin America.
