RIGI: a year from its enactment

On 22 October 2024, through Resolution 1074/2024, the Government put into effect the Régimen de Incentivo a las Grandes Inversiones (Large Investment Incentive Scheme), known as RIGI, created by Law 27.742 to boost the country’s economic development and attract private, national and/or foreign investment.

About RIGI

Title VII of the Ley de Bases y Puntos de Partida para la Libertad de los Argentinos (Law of Bases and Starting Points for the Freedom of Argentines) of 2024 established the Régimen de Incentivo a las Grandes Inversiones (Large Investment Incentive Scheme), aimed at projects for the acquisition, production, construction and/or development of assets that contribute to the country’s economic development, generate employment, and position the country as a strategic supplier in global markets.

Projects qualifying under the scheme are declared “of national interest” within the framework of our National Constitution, obtaining legal certainty and special protection for 30 years. They cannot be affected by the repeal of this law or by the creation of more burdensome or restrictive regulations.

“We are in the final year to join, as the deadline is two years from its entry into force, which was in October 2024,” comments Estanislao de León, Audit Partner and Energy and Natural Resources industry spokesperson at Grant Thornton Argentina. “Although the scheme may be extended once for a period of up to one year, it is still too early to know which decision the Government will make.”

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Eligible projects must be in strategic sectors such as energy, mining, infrastructure, technology, forestry, tourism, steel, oil and gas. The investment plan must be long-term and have a lasting impact on the economy, involve a minimum investment in computable assetsⁱ equal to or greater than the sector’s established threshold, and provide for a minimum investment of 40% in the first and second year from approval.

The minimum amount depends on the industry and subsector, and Article 29 of Regulatory Decree 749/2024 established them as follows:

Current Status

One year after its entry into force, 17 provinces have formally adhered to RIGI through provincial laws, in accordance with Article 224 of Law 27.742, which stipulates that implementation requires the adhesion of each province, the Autonomous City of Buenos Aires, and the municipalities.

“The Ministry of Economy announced that nine projects have already been approved: one in the steel industry, four in energy, three in mining, and one in infrastructure for the agricultural sector,” highlights Gabriel Righini, Audit Partner and Energy and Natural Resources industry spokesperson at Grant Thornton Argentina. “The investment amounts exceed US$16 billion, and 10 projects are being analysed for a total of US$17.574 billion in the copper, lithium, gold and silica sand mining, electric energy, and midstream hydrocarbons industries.”

The benefits of RIGI are the cornerstone of the viability of multiple projects, not only due to tax advantages but also because of the stability and predictability it provides, enabling companies to secure financing for their costly operations. Business leaders have expressed their willingness to submit their projects, stating that they are preparing economic viability projections.

“RIGI is accelerating projects that would take years to complete without the regime's boost,” says de León. “Of the nine approved projects, seven are expansions or improvements to the installed capacity of operational projects. The projects under evaluation are in similar circumstances, as all are operational but seek better conditions for investment through the RIGI. All these projects improve the country’s competitiveness and position us as a key player in the energy transition, generate foreign currency through exports and direct foreign investment, create direct and indirect jobs, and send a signal of confidence to other investors.”

The immediate benefit of the RIGI lies in the acceleration and consolidation of strategic projects. But in the long term, it will depend on whether it succeeds in attracting fresh capital and diversifying the productive matrix with projects in the technology, tourism and infrastructure industries. Thus, in this context, the real impact of the RIGI could be measured by the increase in exports attributable to approved projects, contribution to sectoral GDP, net foreign currency generation, number of jobs created, percentage of local suppliers in the projects’ value chain, and the adhesion of projects in regions beyond traditional hubs.

“Six of the approved projects and five under evaluation are related to energy transition and involve investments of US$13 billion and US$15 billion, respectively. They are related to copper, lithium carbonate, solar and wind farms, and liquefied natural gas (LNG) production,” Righini points out. “This is a major step forward for our energy matrix and security, making them more resilient to external shocks and turbulence in global markets. Moreover, these projects would position the country as a strategic supplier for the global energy transition.”

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i. The Regime considers as “investment in computable assets” all those investments that are intended for the acquisition, production or development of assets affected by activities included in the RIGI (excluding financial assets and exchange goods) and also the acquisition of company shares as long as they have computable assets and are merged with the single project vehicles (VPU, for its acronym in Spanish) within a period of 180 calendar days.