The Argentine Executive Branch sent the Congress a bill entitled "Law of Bases and Starting Points for the Freedom of Argentines," which includes developments such as a new "Incentive Regime for Large Investments" (Regimen de Incentivo para Grandes Inversiones, or RIGI in Spanish).

The purpose of the regime is to give those who commit to executing large investments, within a certain period of time, predictability, stability, legal certainty and protection of acquired rights in tax, customs and foreign exchange matters.

The RIGI focuses on the agribusiness, infrastructure, forestry, mining, oil and gas, energy and technology sectors. Its main objectives are to: encourage large national and foreign investments in Argentina; promote economic development; develop and strengthen the competitiveness of the different sectors; increase exports of goods and services abroad; promote job creation; and generate immediate predictability and stability conditions for the large investments.

The RIGI will be available for two years from the date it entered into force and will apply to "Sole Purpose Vehicles (SPV)" — Vehiculos de Proyecto Unico, orVPU in Spanish — owners of projects that qualify as "Large Investments."                         

The following entities shall be considered VPU:

1. Corporations (Sociedades Anonimas/ Sociedades Anonimas Simplificadas)
2. Limited liability companies (Sociedades de Responsabilidad Limitada)
3. Branches established by companies incorporated abroad
4. Dedicated branches: for example, if an entity wants to adhere to the RIGI and develops one or more activities that will not be part of the investment project, or has one or more assets that will not be allocated to such project, it may opt to establish a branch offices solely for purposes of participating in the RIGI
5. Joint ventures (Uniones Transitorias) and other associative contracts

Requirements and characteristics of the investment plan

• To comply with the requirements of the RIGI, SPVs must: a) submit an application and an investment plan; and b) obtain the approval of the Application Authority.
• The project must involve a "Large Investment."
• Projects will be considered "Large investments" when they (i) involve the acquisition, production, construction and/or development of assets to be used for activities of the sectors included in the RIGI, and involve an investment amount in computable assets as determined by the regulations; and (ii) provide for the first and second year, a minimum investment in computable assets as established by the Application Authority.
• Investments must be of a long-term nature and will be considered long-term if they have a ratio of no more than 30% between the present value of expected net cash flow — excluding investments — and the net present value of the investments during the first five years.
• Investments in computable assets are those destined to the acquisition, production, construction and/or development of assets that will be used for activities in the sectors included in the RIGI.

Tax and customs incentives

• SPVs will be subject to a 25% income tax rate.
• An accelerated amortization mechanism could be applied.
• Net operating losses (NOLs) that cannot be absorbed by taxable profits from the same period may be carried forward indefinitely and deducted from taxable profits obtained in the following years. After five years, any remaining losses may be transferred to third parties.
• NOLs can be adjusted for inflation.
• Adjustments for inflation will be made based on changes in the Consumer Index Price (Indice de Precios al Consumidor, or IPC in Spanish).
• Dividends distributed more than three years from the closing of the fiscal year in which the profits from which they originated were realized, shall be subject to a 0% withholding tax. This provision applies only for profits realized in fiscal years that close more than four years from the date of adhesion to the RIGI.
• When the SPVs receive invoices for value added tax (VAT) on the purchase, construction, manufacture, elaboration or definitive importation of fixed assets or for investments in infrastructure and/or services necessary for their development, the SPVs may pay the VAT with Tax Credit Certificates. The regulations shall establish the requirements, procedures and conditions for the issuance, delivery and/or transfer of the Tax Credit Certificates.
• Several incentives are provided for SPVs formed by joint ventures.
• SPVs may claim an income tax credit for the 100% of the amounts paid and/or collected for the tax on debits and credits in bank accounts.
• Imports of capital goods, spare parts and components made by the SPVs, shall be exempt from import duties, statistics and destination verification, and from any regime of reverse withholding, prepayment or withholding of national or provincial taxes.
• Exports made by the SPVs will be exempted from export duties after three years from the date of adhesion to the RIGI.
• Thin cap rules included in the income tax law should not apply to SPVs in the first five years following the adhesion to the RIGI.
• Import and export restrictions are prohibited from being imposed.
• SPVs may choose to keep their accounting records and financial statements in US dollars following NIIF standards.
• Simpler procedure for reorganizations carried out for the purpose of establishing a SPV.

Foreign exchange incentives

• The export collections made by the SPVs are exempted from being entered and settled in the local Official Foreign Exchange Market in the following percentages:
  1. 20% of the collections from the first year as from the date of adhesion to RIGI
  2. 40% of the collections from the second year as from the date of adhesion to RIGI
  3. 100% of the collections from the third year as from the date of adhesion to RIGI
  These funds in the referred percentages shall be freely available.
• SPVs will not be obliged to enter and/or settle the foreign currency of other concepts related to the project (e.g., capital contributions, loans, etc.) in the official foreign exchange market.
• Exchange regulations that establish, or may establish in the future, restrictions or prior authorizations for access to the official foreign exchange market for (i) the payment of a loan principal and other financial indebtedness with foreign countries, or (ii) the payment of profits, dividends or interest to nonresidents, among others, will not be applicable.

Stability:

• SPVs that adhered to the RIGI will benefit from a 30-year stability period with respect to their projects, in tax, customs and foreign exchange matters; as such, the incentives granted may not be affected either by the revocation of the current regime or by the creation of tax, customs or foreign exchange regulations more burdensome or restrictive than those contemplated in the RIGI.
• New taxes created on or after the adhesion date, and increases in existing taxes, will not be applicable to the SPVs.
• The foreign exchange regime in force at the date of adhesion to the RIGI may not be affected by exchange regulations that may be issued establishing more burdensome conditions.
• A special procedure is provided for contesting that stability was infringed.