As part of the "Bases Law" promulgated on 8 July 2024, through Law No. 27,742, Argentina has enacted a new incentive regime for large investments ("Régimen de Incentivo para Grandes Inversiones" or RIGI).

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

The RIGI applies on investments destined to the following sectors:

• Forestry and associated industries ("forestoindustrias" in Spanish)
• Tourism
• Infrastructure
• Mining
• Technology
• Steel industry
• Energy
• Oil and gas

The RIGI's 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, among others.

The RIGI will be available for two years from the date it was published in the Official Gazette (i.e., will be open until 8 July 2026); the Executive Branch may extend that deadline for one more year.

The RIGI will apply to Sole Purpose Vehicles (SPV) ("Vehículos de Proyecto Unico" or VPU) owners of projects that qualify as "Large Investments" under the terms of the regime.

The following entities shall be considered VPUs:

1. Corporations (Sociedades Anonimas/Sociedades Anonimas Unipersonales) and Limited liability companies (Sociedades de Responsabilidad Limitada)
2. Branches established by companies incorporated abroad
3. Dedicated branches — e.g., 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 the project, it may opt to establish a branch office solely for purposes of participating in the RIGI
4. 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 submit an application and an investment plan and obtain the approval of the Application Authority. The project must involve a "Large Investment."

Projects will be considered "Large investments" if they meet both of the following requirements:

• 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 in computable assets of at least US$200m (the Executive Branch may increase this limit to US$900m for certain type of investments)
• Provide for the first and second year a minimum investment in computable assets as established by the Executive Branch that is not lower than 40% of the minimum investment committed

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 three years.

Investments in computable assets are those used to acquire, produce, construct and/or develop assets that will be used for activities in the sectors included in the RIGI. The acquisition of shares, real estate, rights of use or usufruct of real estate and mining, oil and gas concessions may be considered as computable assets up to 15% of the minimum investment committed.

At least 20% of the committed investments must be acquired from local suppliers, to the extent those goods and services are available locally under comparable market conditions regarding price and quality.

Special conditions for Long-Term Strategic Export Investment Projects (LTSEIP) that involve investments for at least US$1b.

Tax incentives

Income tax

SPVs will be subject to a 25% income tax rate.

As an option, an accelerated amortization mechanism can be applied on certain investments, according with the following rules:

• Movable assets can be depreciated in at least two years.
• Mines, quarries, forests and infrastructure projects can be depreciated for 60% of their normal useful life.

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, based on changes in the Consumer Index Price ("Indice de Precios al Consumidor," or IPC in Spanish).

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.

Dividends distributed within the first seven years following the application to the RIGI shall be subject to 7% withholding tax. Dividends distributed after the eighth year shall be subject to a 3.5% withholding tax.

Transfer pricing rules will be applicable on transactions among SPVs and their owners or local related entities.

Value Added Tax (VAT)

When the SPVs receive VAT invoices 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. In this case, the SPV cannot consider this VAT as input VAT in its returns. Those certificates will be considered as free availability VAT credits for the suppliers ("saldo a favor de libre disponibilidad" in Spanish); the credits may be freely transferred to third parties without the authorization of the tax authorities if the devolution or transfer requested is not resolved by the tax authorities within three months.

Tax on debits and credits in bank accounts

SPVs may claim an income tax credit for 100% of the amounts paid and/or collected for the tax on debits and credits in bank accounts.

Customs incentives

Imports of capital goods, spare parts and components made by the SPVs, shall be exempt from import duties, statistic fee, 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 (after two years in the case of LTSEIP). Import and export restrictions are prohibited from being imposed.

Foreign exchange incentives

The export collections made by the SPVs are exempted from being entered and settled in the local Official Foreign Exchange Market ("MULC" in Spanish) in the following percentages:

• 20% of the collections after two years have elapsed from the start-up of the SPV (after one year in the case of a LTSEIP)
• 40% of the collections after three years have elapsed as from the start-up of the SPV (after two years in the case of a LTSEIP)
• 100% of the collections after four years have elapsed as from the start-up of the SPV (after three years in the case of a LTSEIP)

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 aspects of the project (e.g., capital contributions, loans, etc.) in the MULC.

Exchange regulations that establish, or could establish in the future, restrictions or prior authorizations for access to the MULC 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.

Other incentives

SPVs may choose to keep their accounting records and financial statements in US dollars following NIIF standards. Simpler procedures are provided for reorganizations carried out for the purpose of establishing a SPV.

Stability

SPVs that adhere to the RIGI will benefit from a 30-year stability period with respect to their projects' tax, customs and foreign exchange matters. As such, the incentives granted may not be affected either by revoking the current regime or by drafting 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 apply to the SPVs.

The foreign exchange regime in force at the date of adhesion to the RIGI will not be affected by exchange regulations that may be issued establishing more burdensome conditions.

A special procedure is provided for asserting that stability has been infringed.

Finally, the Law establishes that the Executive Branch must issue regulations to implement the RIGI within 30 days from the publication of the Law in the Official Gazette.