Argentina faces one of the greatest challenges in its history
Dr Miguel Mantelli
by Dr Miguel Mantelli
After a challenging era of populist policies, the Argentine Congress has finally approved one of the most anticipated laws for foreign investors.
RIGI: the Régimen de Incentivo para Grandes Inversiones – Large Investment Incentive Regime
The RIGI, included in Javier Milei's Bases Law came into effect on 08 July 2024, seeks to attract investment projects exceeding USD 200 million, on strategic areas as agricultural, infrastructure, mining, forestry, oil & gas, energy, and technology, through tax, customs and exchange incentives.
Benefits of the RIGI
The RIGI offers a series of benefits for parties making large investments in Argentina:
Tax benefits such as the reduction of the income tax rate from 35% to 25% for legal entities created specifically for Owning a Single Investment Project (VPU).
Accelerated amortisation of movable property and infrastructure
Carry forward unabsorbed tax losses for compensation with future gains, without term limit.
Transference to third parties of unabsorbed losses not compensated with gains after five years.
No taxation on dividends from gains obtained since the 4th. year from the beginning of the Project.
Accelerated refund of VAT balances within a period not exceeding three months, and payment of VAT through tax credit certificates.
Computation of 100% of the “tax on bank debits and credits” as a credit on income tax.
Customs benefits: Exemption from import duties on capital goods, spare parts, parts and inputs.
Exemption from export duties during the first three years for projects adhering to the RIGI.
Foreign exchange benefits: Free access to foreign currency for exports in a gradual manner (20% the first year, 40% the second, and 100% from the third year). Free access to foreign currency for local or external financing without restrictions.
Regulatory stability: Tax, customs and foreign exchange stability for 30 years, with a guarantee of not being affected by more burdensome regulations.
Although it is still too early to predict the impact of this law on the economy, several global companies have already committed to making valuable investments under this regime. The liberal policies of the new government are putting the country back on its feet.
GGI | Global AllianceDr Miguel Mantelli Regional CEO Latin America
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