New Investment Promotion Regime for Exports

Through Executive Decree No. 234/2021, published in the Official Gazette on April 7, 2021, the Argentine Executive (“PEN,” after its acronym in Spanish) created the Investment Regime for the Promotion of Exports to foster economic growth and development in the country.  Likewise, the Argentine Central Bank issued Communique “A” 7259, dated April 8, 2021, by means of which the regime sanctioned in the Decree is to be implemented.

Decree No. 234/2021

The Decree mainly sets forth the following regulations:

• Its scope will only cover investments aimed at starting up new productive projects in forestry-industrial, mining, hydrocarbons, manufacturing and agro-industrial activities, as well as expanding existing business units in need of investments to increase their production.
   

• Certain requirements must be met, including, the filing of an “Export Investment Project” with a direct foreign currency investment of no less than US$ 100,000,000.
• Beneficiaries must adhere to investment and development plans pursuant to the terms and deadlines of the projects approved by the Ministry of Economy and the Ministry of Productive Development.
   

• Beneficiaries will enjoy a freely disposable amount of up to 20% of the foreign currency obtained in  project-related exports to pay principal and interest on trade or financial liabilities abroad and/or profits and dividends that correspond to  finalized and audited financial statements  and/or to the repatriation of non-resident direct investments.

• The benefit may not exceed an annual maximum of up to 25% of the gross amount of foreign currency settled in the exchange market to finance the development of the project and may be applied once a full year has elapsed from the time the foreign currency was brought in.
   

• The term to qualify for the benefits is 3 years and approved projects will enjoy regulatory stability in exchange matters for a period of 15 years.
   

• The Argentine Central Bank will conduct the prior technical evaluation of each project’s impact on the exchange balance, issuing a report corresponding to applicable regulations that will be sent to the enforcement authority for consideration when awarding benefits.

Communique “A” 7259

Pursuant to the Decree, the Communique mainly sets forth the following:

• Among the cases to which the benefit can be applied, the Decree adds the payment of principal and interest on debts for imports of goods and services.
   

• The gross amount of foreign currency transferred (for the purpose of calculating the annual maximum of 25%) will arise from the amount accumulated from the foreign currency settlements carried out in the foreign exchange market starting April 7, 2021 in cross-border financial indebtedness and contributions of direct foreign investment.
   

• Exporters included in the Regime must appoint a local financial institution to monitor the investment project.