Investment Promotion and Protection Law

The Investment Promotion regime is framed in Law 16,906, in which the promotion and protection of investments made by national or foreign investors in the national territory is declared of national interest.

Main characteristics of the regime

  • The foreign investor enjoys the same incentives as the local investor, with no discrimination from a tax point of view or restrictions on the transfer of profits abroad.

  • Existence of general and automatic incentives for investment.

    Projects promoted by the Executive Branch may have special tax benefits.

    Companies located in Free Zones have extensive tax exemptions.

There are two groups of tax benefits

  • 1)  General incentive for the investor:
    It applies to taxpayers of the Income Tax from Economic Activities (IRAE) and the Tax on the Disposal of Agricultural Assets who carry out industrial or agricultural activities. The Investment Law establishes the granting of the following benefits:

    Exemption from the Net Worth Tax (IP) of movable property intended directly for the production cycle.

    Exemption from the Value Added Tax (VAT) and the Specific Internal Tax (IMESI) corresponding to the Importation and refund of VAT included in purchases in the market of movable property intended for the production cycle and equipment for electronic data processing.

  • 2) Incentive regarding specific investments:
    Those companies in any line of business that present an investment project and that it is promoted by the Executive Branch, will have the possibility of accessing additional benefits. The benefits to which companies whose investments are promoted by the Executive Branch may benefit are the following:

    Net Worth tax

    Import fees or taxes

    VAT

    Fees and salaries in technological developments of priority areas.

    IRAE

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