RIGI: a year from its enactment
BUSINESSWhat is the status of the Large Investment Incentive Scheme one year after its regulation?
With 130 votes in favour, the Chamber of Deputies of the Nation granted preliminary approval to the new incentive regime for large-scale investments aimed at new or emerging industries in Argentina.
Contents
On 22 May, the National Executive Branch (PEN) submitted to Congress the bill entitled “Ley de Régimen de Incentivo para Grandes Inversiones en Nuevas Industrias” (Large Investment Incentive Regime for New Industries Act), known as Super RIGI, designed to provide incentives and legal security for new investment projects in the country. On 24 June, the Chamber of Deputies approved the bill with 130 votes in favour, 106 against and 7 abstentions.
The purpose of the Act is to attract private investment in new projects that contribute to the creation, development, implementation and exploitation of new economic activities in the country. “The legislation is aimed at greenfield projects, excluding expansions, upgrades, modernisations, conversions, reorganisations and the reuse of pre-existing facilities from the regime,” comments Julia Adano, Head of Tax at Grant Thornton Argentina.
The regulation defines ‘new economic activities’ as any industrial, technological or service project related to strategic technological and digital infrastructure that is not developed, produced or provided in the country, or that remains at the experimental or pilot stage. “Although the bill does not specify the target industries in the same way as the RIGI, it has been announced that some of the activities included will be the lithium and uranium value chains, green hydrogen, onshore LNG, small and medium-sized nuclear reactors, new petrochemical products and products for the aerospace industry, among others,” explains Adano.
The Super RIGI establishes a special regime of tax, customs and foreign exchange benefits for investments made through Single Project Vehicles (VPU, for its acronym in Spanish), with a minimum investment amount of one billion US dollars (USD 1,000,000,000) in eligible assets dedicated exclusively to the project. Investments in Research and Development (R&D) related to a project will be counted at twice their nominal value for the purpose of meeting the minimum investment threshold, up to a cap of 20% of the total amount.
The period for joining the regime will be five years, extendable only once for a period of up to one (1) year. “The text approved by the Chamber of Deputies limits the Executive Branch’s power to extend the term, by establishing that any extension must be based on a prior assessment of the regime’s performance, which must be published simultaneously with the decree approving the extension,” comments Adano.
VPUs may be established in the form of corporations (SA), single-shareholder corporations (SAU), limited liability companies (SRL), branches, temporary joint ventures (UTEs) and other associative agreements. Entities declared bankrupt, convicted of economic, tax or foreign-exchange offences, or with enforceable tax liabilities are excluded. Likewise, VPUs that have applied for admission to the RIGI or projects with a substantially similar purpose -even where they have withdrawn or cancelled their application- are also excluded from the Super RIGI.
Benefits
Super RIGI vs. RIGI
| Super RIGI (Text approved by the Chamber of Deputies 0005-PE-2026) | RIGI (Act No. 27,742 and implementing regulations) | |
|---|---|---|
|
Purpose of the regime
|
Exclusively for new economic activities not developed in the country or at an experimental/pilot stage. Excludes expansions, conversions or modernisations of existing projects.
|
For large-scale investments in strategic sectors, including both new projects and expansions of existing projects.
|
|
Eligible industries
|
Does not define specific sectors. Applies to industrial, technological or service projects linked to strategic technological and digital infrastructure that constitute a “new economic activity”.
|
Covered sectors: forestry and timber industry, tourism, infrastructure, mining, technology, steel, energy, oil and gas.
|
|
Minimum investment amount
|
USD 1 billion per project.
|
USD 200 million, with exceptions for certain oil and gas subsectors, where minimums are USD 600 million and USD 300 million. For Long-Term Strategic Export Projects (PEELP - Proyectos de Exportación Estratégia de Largo Plazo), the minimum is USD 2 billion.
|
|
Initial investment commitment
|
Minimum of 20% of the committed amount within the first 2 years from admission.
|
Minimum of 40% of the required minimum investment within the first 2 years (depending on the sector).
|
|
Admission period
|
5 years from the issuance of regulations, extendable by 1 year.
|
2 years from the entry into force of the regime (8 July 2024), extended for 1 year as from 8 July 2026.
|
|
Beneficiaries
|
Single Project Vehicles (VPU): SA, SAU, SRL, foreign branches, temporary joint ventures and other associative agreements. They may not have applied for the traditional RIGI.
|
Single Project Vehicles (VPU): same legal structures.
|
|
Suppliers
|
Suppliers may join the regime to import goods or provide services related to approved projects and obtain specific incentives.
|
|
|
Local development requirements
|
Obligation to hire local suppliers for at least 20% of supplier-related investment expenditure, provided that local suppliers are available under market conditions as to price and quality.
|
|
|
Duration of stability
|
30 years from admission.
|
|
|
Income Tax
|
Reduced rate of 15%.
|
Reduced rate of 25% (vs. 35% under the current general regime).
|
|
Dividends
|
7% initially and 3.5% after four years from admission.
|
3.5% after seven years from admission.
|
|
Accelerated depreciation
|
Yes. Movable assets: minimum of 2 annual instalments. Infrastructure: 60% in the first fiscal year and the remaining 40% over 2 years, or useful life reduced to 60%.
|
Yes, under the accelerated depreciation regime provided by Act No. 27,742.
|
|
Tax losses
|
No time limit for utilisation. Transferable to third parties after 5 years. Tax losses are adjusted in line with the General Consumer Price Index (IPC).
|
Also allows transfer to third parties after 5 years, with no time limit for utilisation. Tax losses are adjusted in line with the Wholesale Price Index (IPIM - Índice de Precios Internos al por Mayor).
|
|
VAT
|
Payment through Tax Credit Certificates for eligible investments.
|
|
|
Bank Debit and Credit Tax
|
100% creditable against Income Tax.
|
|
|
Customs benefits – Imports
|
Full exemption from import duties, statistic fee, destination verification fee and any national, provincial or municipal perception, withholding or advance payment. Covers goods incorporated into the project, including intermediate goods and parts.
|
Exemption from import duties, statistic fee and taxes on new capital goods, spare parts, components and parts related to the project. Does not cover inputs.
|
|
Customs benefits – Exports
|
Full exemption from export duties on goods produced under the project.
|
Exemption from export duties from the 3rd year after admission (from the 2nd year for PEELPs).
|
|
Foreign trade restrictions
|
Prohibits quotas, licences, quantitative or qualitative restrictions, official prices or domestic supply obligations.
|
Grants broad operational freedom.
|
|
Foreign-exchange regime – Exports
|
Gradual free availability: 20% after 1 year from the first export; 40% after 2 years; 100% after 3 years.
|
Scale established by Section 198 of Act No. 27,742: 20% after 2 years from commencement of VPU operations; 40% after 3 years; 100% after 4 years.
|
|
Foreign currency inflows and settlement
|
Exemption from the obligation to settle export proceeds according to the above scale. Freedom regarding capital, financing and contributions.
|
|
|
Holding of foreign assets
|
No restrictions on holding liquid or non-liquid foreign assets.
|
|
|
Access to the foreign-exchange market
|
No prior authorisations required for dividend, interest, repatriation of capital and external debt payments, subject to prior foreign-currency inflow conditions.
|
|
|
Social security
|
Flat 10% rate applicable to new employment relationships registered after admission. Mandatory payment of the Labour Equalisation Fund (FAL - Fondo de Asistencia Labora), where applicable, remains in force and is not included within the reduced 10% rate.
|
Does not establish a general equivalent reduction in employer contributions. The general social security regime applies.
|
|
Local jurisdictions
|
Provides for provincial accession and local stability.
|
Also provides for provincial accession and local stability:
|
|
International arbitration
|
Yes. Permanent Court of Arbitration (PCA), International Chamber of Commerce (ICC), or International Centre for Settlement of Investment Disputes (ICSID).
|
|
Next Steps
The bill must be considered by the Senate in order to obtain final approval and then be implemented through regulations. The Senate may approve the text, reject it, or introduce amendments. If the bill is rejected, it may not be reconsidered during this year’s legislative sessions.
If the text is amended, the bill will return to the Chamber of Deputies, which will review the amendments and enact the Act. If the Chamber insists on the original wording, it must obtain the same or a greater majority than that achieved in the Senate in order for the original text to prevail. Failing that, the version approved by the Senate will become law.
Related articles:
RIGI: What you need to know about the Incentive Regime for Large Investment
TAX UPDATEAlthough its regulation is still pending, Title VII of the Law of Bases creates the Large Investment Incentive Regime establishing incentives, certainty, legal security and a system of rights protection for private investments of USD 200,000 or more in a single project.