Argentina’s government has introduced a new scheme to attract FDI. The incentive regime for large investments (RIGI) gives generous tax incentives to investors and lightens the burden of lengthy bureaucratic processes.
The scheme benefits projects worth more than $200m in the forestry, tourism, infrastructure, mining, technology, steel, energy and oil and gas sectors. There is a limited period to join which could give investors hesitation.
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The policy was enacted on the 8th of July and those wishing to benefit from it have two years from its implementation to spend at least 40% of their investment.
Will it work?
Unlike many countries that struggle to attract FDI, Argentina has multiple factors on its side. A skilled workforce relative to the region, existing infrastructure and natural gas reserves could play an important role in the economy’s long-term recovery.
The tax reforms, although they need some clarification, may give investors a nudge to at least start paying attention to the South American country that may have been previously written off for its economic and political volatility.
Some analysts suggest that, given the circumstances, investors will take a “wait and see” strategy until they are convinced that their investments are safe.
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By GlobalDataBig solutions for big problems
Milei inherited a country in crisis. Hyperinflation was causing Argentinians to go hungry, the economy was in a long-term recession and the debt to foreign organizations loomed in the background.
Many say the desperation the crisis unleashed could explain the rise to power of the self-denominated anarcho-capitalist Javier Milei. An eccentric figure, the Argentinian leader became widely known for taking a chainsaw to his rallies to symbolize how he would slash public spending to its bones.
