Regime for the promotion of investments
REGIME FOR THE
PROMOTION OF INVESTMENTS
Complementary regulations were issued in relation to Decree No. 234/2021,
aimed at attracting investments in productive sectors of high export capacity
The Ministry of Productive Development and the Ministry of Economy issued Joint
Resolution No. 4/2021 (published in the Official Gazette on September 22, 2021)
whereby certain supplementary regulations (the “Supplementary Regulations”)
were enacted in relation to the implementation of the “Regime for the Promotion
of Investment for Exports” (the “Regime for the Promotion of Investments”)
established by Decree No. 234/21 of April 6, 2021 (the “Decree”) (click here to see our comment on said Decree).
Conceptual specifications about the Regime for the Promotion of Investments
Some of the most remarkable definitions included in the Supplementary
Regulations as regards the Regime for the Promotion of Investments which
specify its operation and scope state that:
a) The investments which shall be considered under the Regime for the Promotion
of Investments shall be those which imply an improvement in the export capacity
of the applicant, regardless of whether they lead to an improvement of the
productive capacity for the domestic market (section 1).
b) The investment shall not only be evidenced by the inflow of foreign exchange
in the Foreign Exchange Market, but also pursuant to the FOB price dispatched
for import of capital goods produced abroad and imported to the country in
order to be ruled by the Regime for the Promotion of Investments (section 2,
2.3.2.a.2);
c) The valuation of the investment made when the project for investment was
submitted shall be considered pursuant to the estimation of the annual limit of
the benefit set forth in section 8 of the Decree (section 2, 2.3. 2.a.2);
d) In the case of associative projects, the distribution of the benefits shall
be proportional to the percentage of income of foreign exchange in the Foreign
Exchange Market made by each company participating in the project (section 2,
2.3.2.c);
e) Notwithstanding that foreign exchange stability is granted for the term of
15 years, that would not prevent the enforcement authority from stablishing a
shorter term for the use of the benefits; to that effect the following is set
forth: “For the purpose of what is set forth in Section 9 of Decree No. 234/21,
the term for the use of the benefit shall be determined in each case according
to the kind of investment and the business plan submitted and approved”
(section 4): and
f) The granting of the benefit of exchange stability in the Decree shall not
affect the acquired rights that may correspond to the investor according to the
regime applicable to the activity to which the project refers to (section 5).
• Registration Requirements
Supplementary Regulations detail the formal requirements to be met by the
applications submitted by investors interested in obtaining the benefit
included in the Decree and provide, as regards the substantial description of
the projects, that the following shall be included:
a) Description of the investment, identifying whether it is a new undertaking
or the expansion of an existing one – in which case the increase in the
productive capacity that is expected to be achieved and the exports expected as
the result of the investment shall be indicated;
b) Valuation of the investment, certified by an independent body
c) Indication of: (i) the investment disbursement term and term for the entry
of foreign currency through the Foreign Exchange Market; (ii) progress in the
development of the project; (iii) estimated start-up dates for production and
export; and (iv) tariff positions corresponding to the products to be exported.
d) In the case of extension of an existing undertaking, the following shall
also be included: (i) exports made during the last 5 calendar years; and (ii) a
well-founded evaluation of the percentage incidence as a consequence of the
investment project in exports and a determination of the respective benefit; and
e) In the case of associative projects, the associated parties and the legal
form they will adopt for this purpose shall be indicated.
To such general requirements, specific requirements will be added according to
the type of activity to which each investment project refers, which will be
detailed in the form that will be implemented in the future for this purpose
for each of the activities included in the scope of application on the Decree
(section 2, 2.3.1 and 2.3.2)
• Creation of the Investment Project Evaluation Committee and decision about
the origin of the applications
The Investment Project Evaluation Committee (the “Evaluation Committee”)
is created, which will be made up of one representative from each of the
following bodies: (a) Undersecretariat of Industry, dependent on the Ministry
of Productive Development; (b) Undersecretariat of Mining Development,
dependent on the Ministry of Productive Development; and (c) Undersecretariat
of Regional and Sector Programming, dependent on the Ministry of Economy.
The Evaluation Committee will receive the proposal of the interested parties
and, after the receipt of the technical report that the Central Bank of
Argentina (“BCRA”) should gather regarding the impact on the foreign
exchange balance, it will issue an opinion on the formal and substantial merits
of the application.
The enforcement authority of the Regime for the Promotion of Investments will
decide regarding the approval of the investment project within a term of 60
business days, as from the receipt of said opinion, extendable for another
equal term.
• Control and penalties regime
The Supplementary Regulations detail the information and control regime to
which the investors shall be subject to, whose projects become admitted under
the Regime for the Promotion of Investments (section 7, 7.2) and it also sets
forth the penalizing regime that, in case of serious breaches, it shall give rise
to the expiration of the benefit and to the obligation to integrate in the
Foreign Exchange Market “those amounts of free availability which the company
would have used until the moment of the penalty”, within a peremptory term of
90 days (section 4, 4.1).
• Creation of the Registry of Investment Projects
Supplementary Regulations also include the creation of a Registry of Investment
Projects in the orbit of the Ministry of Productive Development, where,
particularly, approved investments projects and imposed penalties shall be
registered (section 7, 7.3).
Please click here to access to the text of the Joint
Resolution No. 4/2021 of the Ministry of Productive Development and the
Ministry of Economy (available only in Spanish).
Please click here to access to the Decree No. 234/2021
(available only in Spanish).
For more information, do not hesitate to contact Pablo
Alliani , Fernando Brunelli, María
Inés Corrá and/or Cristian Galansky.