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Creation of the Investment Promotion Regime for Exports

The Executive Branch of the Republic of Argentina, through the Decree of Need and Urgency No. 234/2021 published in the Official Gazette on April 7, 2021 (the “Decree”) established the “Investment Promotion Regime for Exports” (the “Regime”), which provides  certain benefits related to the possibility of freely apply a percentage of foreign currency obtained from exports to the payment of principal and interest of commercial or financial liabilities incurred abroad, to the payment of profits and dividends and/or to the repatriation of direct investments of non-residents.

The Ministry of Economy (Ministerio de Economía) and the Ministry of Productive Development (Ministerio de Desarrollo Productivo) will be the enforcement authorities of the Regime (the “Enforcement Authority”), the term to decide to take advantage of the benefits of the Regime will be 3 years as from April 7, 2021 and the Enforcement Authority may extend such term for an equivalent period.

The Enforcement Authority will issue the regulations setting forth the requirements and conditions for the submission and the approval of the Investment Projects (as such term is defined below) that will receive the benefits of the Regime and the Central Bank of the Republic of Argentina (Banco Central de la República Argentina) shall prepare the prior technical evaluation of the impact on the balance of exchanges of the Investment Projects, which will be sent to the Enforcement Authority for its consideration in the granting of the benefits.


Requirements for access to the Regime. Activities reached by the Regime. Amount of the Investment Projects

Individuals or legal entities domiciled in Argentina and/or abroad that file investment plans of new productive projects related to industrial-forestry, mining, hydrocarbon, manufacturing and agro-industrial activities, as well as the expansion of existing business units in such sectors that require investments in order to increase their production, which implies a direct investment in foreign currency of not less than U$S 100,000,000, calculated at the time the of filing of the project  (the “Investment Projects“), may apply  for the inclusion in Regime.

In this regard, the Enforcement Authority may include and/or exclude activities reached by the benefits of the Regime and will establish, for each activity, the requirements to consider the existence of an expansion of productive capacity under the terms of the Regime. In no case financial and/or portfolio investments shall be considered as an Investment Project, as well as the merger or acquisition of companies or the acquisition of quotas and/or shares or equity interest in companies.

Once the Enforcement Authority verifies the compliance with the requirements of an Investment Project, the Enforcement Authority will approve the admission of such Investment Project in the Regime and will issue an “Export Investment Certificate” (Certificado de Inversión para Exportación, the “Investment Certificate“) which will entitle the beneficiaries of the Investment Project to access to the benefits of the Regime. The inclusion in the Regime will mean, for the beneficiaries of the Investment Projects, the obligation to comply with the investment and development plans, in the terms and conditions of the Investment Project approved by the Enforcement Authority.


Benefits of the Regime

The beneficiaries of the Investment Projects admitted to the Regime will have the following benefits:

(i) a freely distributable amount of up to 20% of the foreign currencies obtained from exports related to an Investment Project, which may be used for the payment of principal and interest of commercial or financial liabilities incurred abroad, the payment of profits and dividends corresponding to closed and audited financial statements and/or the repatriation of direct investments of non-residents. This benefit may not exceed a maximum annual amount equivalent to 25% of the gross amount of foreign currencies entered through the foreign exchange market (the “FX Market”) in order to finance the Investment Project and may be applied after one year from the effective date of the entry of foreign currency in the FX Market; and

(ii) regulatory stability in foreign exchange matters for a term of 15 years as from the date of issuance of the Investment Certificate, which means that the benefits mentioned in (i) above may not be affected by foreign exchange regulations that establish more burdensome conditions and/or restrictions than those contemplated at the time of issuance of the Investment Certificate.

For the purposes of calculating the benefit set forth in (i) above, the Decree establishes that exports made by a productive units related to the positions of the Common Nomenclature of Mercosur detailed in the Annex to the Decree, among which are those corresponding to corn, wheat, corn flour, wheat pellets, popcorn, corn pellets, corn starch, corn oil, corn preparations, soybean, soybean oil, soybean flour, glycerol and soybean oil, will be excluded. The Decree also empowers the Enforcement Authority to include or exclude new positions.

Access the full text of the Decree here.

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