The Government made official this Friday the regulation of Large Investment Incentive Regime(RIGI). This was done through Decree 749/2024 published in the Official Gazette. It should be remembered that the project was approved in August under the Bases law with its corresponding set of fiscal measures.
The objective of the RIGI is to offer incentives, ensure legal certainty and security, and establish a system of protection of acquired rights for those responsible for a single investment project exceeding US$200 million.
According to the official text, the RIGI “Its main objective is to regulate and implement an incentive regime designed to attract large investments to different sectors of the Argentine economy, as well as generating the necessary conditions for national and foreign companies to make large-scale investments in the country.”
What are the main objectives of this regime?
The official text specifically mentions the objectives of the regime, as well as the incentives it offers. As mentioned, the main objective is to attract foreign direct investment (FDI) and encourage national investment in strategic sectors such as industry, tourism, mining, energy, etc.
- Generate employment: The aim is to promote the creation of quality employment and foster regional development.
- Increase exports: These investments are expected to boost Argentine exports and diversify the productive matrix.
- Develop strategic sectors: The regime seeks to promote the development of sectors that are considered key to the country’s economic growth.
What kind of incentives are offered?
The decree does not specifically detail the incentives that will be granted, but mentions that conditions will be established. predictability, stability and competitiveness for companies that invest. Some possible incentives could include: tax exemptions, VAT refunds for businesses, credit facilities and state guarantees.
The detail of the standard
Companies interested in joining the program will have a period of two years to do so, with the possibility that the Executive Branch may extend this period for an additional year. The aforementioned decree establishes this regulation and came into force this Friday after its publication in the Official Gazette.
The RIGI regulations present several aspects to consider. First, it has been confirmed that eight sectors will be able to benefit from the program, including forestry, tourism, infrastructure, mining, technology, steel, energy, and the “oil and gas” sector. Most of these sectors require a minimum investment of US$200 million, although there are exceptions.
Investments in oil and gas for transportation and storage must exceed US$300 million, while those for exploration and exploitation must exceed US$600 million.
The RIGI Project aims to position the Argentine Republic as a new long-term supplier in markets where the country does not yet have a relevant participation. This project must satisfy the requirements of the Enforcement Authority and involve investments in eligible assets in successive stages. Each stage must have a minimum investment equal to or greater than one billion US dollars (USD 1,000,000,000).
The context and presentation to the United States
It is worth noting that RIGI regulations come a day later that the Chief of Staff, Guillermo Francos, the Secretary of Finance, Pablo Quirno, and the Foreign Minister Diana Mondino, in the context of the “Argentina Business Council”, highlighted Javier Milei’s position on economic deregulation, emphasizing the benefits of the RIGI, which is still waiting to be regulated by the Executive Branch.
Francos was one of the first to address the delegation of senior executives representing member companies of the American Business Council. In his speech, he highlighted the Government’s efforts to “boost economic growth and private sector investment“.
“We have implemented significant measures, such as the repeal of laws that limited free competition and the enactment of the Law on the Bases to encourage large investments through the RIGI,” he said. He stressed that the Government’s objective “is clear” and focuses on “reintegrate Argentina into the global stage, promote cooperation with trading partners such as the United Statesand generate confidence among investors.”
Source: Ambito
