The Large Investment Incentive Regime (RIGI, in Spanish), included in Argentina’s Basic Law, seeks to attract foreign investment in key sectors, such as mining, gas, oil, agribusiness, infrastructure, forestry, energy and technology. The objective of the RIGI is to offer customs and tax benefits for projects with investments of between USD 200 million and USD 900 million. 

To qualify for the regime, projects must meet certain requirements, such as export promotion and job creation. Corporations and limited companies can apply, while those with a history of corruption or fiscal debts are excluded. Thus, to join the RIGI, a ‘special purpose vehicle’ (SPV), with local or foreign ownership, must be set up to exclusively manage a project qualified as a Large Investment in the eligible sectors.

Tax benefits in Argentina 

Numerous incentives will benefit in the accounting, customs, tax and exchange regime areas. Starting with the most important tax incentives, we highlight the taxation of dividends: 7% on the net profit; 10% if distributed after three years from the tax closing date. Regarding the Accelerated Depreciation of Investment, real estate will be subject to a minimum of 2 annual, equal and consecutive instalments, together with the reduction to 60% of the estimated useful life of infrastructure works. In addition, the tax rate will remain at a maximum of 25% and VAT may be paid to suppliers or directly to the ARCA (former AFIP) through Tax Credit Certificates. Tax losses will not have a limit and, on top of that, from year 5 onwards they can be transferred to third parties. In relation to the Tax on Debits and Credits in bank accounts, the SPV will be able to compute 100% of the amounts paid and received as income tax credit. Finally, interest and exchange differences arising from the financing of the project promoted by the RIGI may be deducted from profits or added to the SPV’s losses.

Accounting, customs and exchange rate regime fiscal exemptions 

Customs benefits are attractive because companies are exempt from import duties, statistics and verification of destination, among others, besides export rights after three years of joining the RIGI. Moreover, SPV may import and export freely goods and services aimed at construction, operation and project development prohibitions or quantitative restrictions. 

The last two incentives are related to accounting and exchange rate regime, as accounting records and financial statements can be kept in US dollars following IFRS. In conclusion, project exports are excluded from the Income obligation and negotiation in the exchange market: 20% reduction from the first years and 40% from the second year. Lately, funds will be freely available. 

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