Argentina: Foreign investment

FDI in Figures

FDI inflows in Argentina have been unstable for several years. According to the World Investment Report 2024 published by UNCTAD, the country was the 17th-largest recipient of FDI in 2023, with a total of USD 22.9 billion (from 15.4 billion one year earlier). At the end of the same period, the total stock of inward FDI stood at USD 128.8 billion. Figures from the Central Bank show that, as of 2023, Argentina's gross FDI liabilities totaled USD 127.556 billion, comprising USD 77.093 billion in equity and USD 50.462 billion in debt instruments. The United States was the top FDI source with USD 23.901 billion (19%), followed by Spain with USD 18.336 billion (14%) and the Netherlands with USD 14.565 billion (11%). By sector, manufacturing led with USD 49.235 billion (+5% year-on-year). Mining and quarrying followed with USD 29.124 billion (stable year-on-year), and wholesale/retail trade and vehicle repair reached USD 14.258 billion (–2% year-on-year). According to the OECD, FDI inflows in the first half of 2024 totalled USD 8.8 billion, compared to 10.2 billion in the corresponding period one year earlier.

The Argentine government actively seeks foreign direct investment, but economic insecurity and recurring crises hamper the task. The overall openness to foreign investment is below average. Still, Argentina has definite assets: its natural resources are considerable (copper, gas and oil) and its workforce is highly skilled and competitive. Both foreign and local investors typically operate under equitable conditions in Argentina. Nevertheless, foreign participation is barred in certain sectors like aviation and media. Additionally, there are limitations on foreign ownership of rural lands, water bodies, and border areas. Moreover, both domestic and international firms often cite a burdensome and unpredictable tax load along with inflexible labour regulations as hindrances to additional investment in Argentina. The Ministry of Foreign Affairs, International Trade, and Worship is the lead governmental entity for investment promotion through its Bureau of Investment, and there is currently no investment screening mechanism in place for inbound foreign investment. Argentina recently introduced tax incentives for investors in the automotive sector, which encompass accelerated depreciation and prompt reimbursement of VAT on purchases of new capital equipment, along with complete exemption (a zero percent rate) from export tariffs on manufactured goods generated by investment initiatives. To foster FDI, Argentina signed 48 investment agreements. Furthermore, in 2024, Argentina launched the Incentive Regime for Large Investments (RIGI) to attract major investments. RIGI offers tax, trade, and FX benefits for 30 years to projects over USD 200 million in sectors such as forestry, tourism, infrastructure, mining, technology, steel, energy, and oil and gas. The country ranks 76th among the 133 economies on the Global Innovation Index 2024 and 145th out of 184 countries on the latest Index of Economic Freedom. Lastly, the country scored 37/100 on the Corruption Perception Index, ranking 99th out of 180 countries.

Foreign Direct Investment	2020	2021	2022
FDI Inward Flow (million USD)	4,723	6,782	15,087
FDI Stock (million USD)	85,371	99,890	116,710
Number of Greenfield Investments*	63	104	72
Value of Greenfield Investments (million USD)	4,077	6,433	7,164

Source: UNCTAD, Latest data available.

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

FDI STOCKS BY COUNTRY AND INDUSTRY

Main Investing Countries	2023, in %
USA	18.7
Spain	14.4
The Netherlands	11.4
Brazil	7.6
Switzerland	5.6
Uruguay	4.8
UK	4.4
France	3.5

Main Invested Sectors	2023, in %
Manufacturing	38.6
Mine and oil extraction	22.8
Retail and wholesale	11.2
Information and communication	7.2
Deposit-taking corporations, except the central bank	5.2
Other financial intermediaries	2.6
	0.0

Source: Central Bank of Argentina, Latest data available.

Form of Company Preferred By Foreign Investors: Public limited company - SA
Form of Establishment Preferred By Foreign Investors: Subsidiary
Main Foreign Companies: Many foreign companies, mostly European and American, have invested in Argentina. Some examples: Peugeot, General Motors, Carrefour, Telefonica, Wal-Mart and Sony.
Sources of Statistics: National Statistics Center

What to consider if you invest in Argentina

Strong Points

Argentina's strong points for FDI include:

Richness of natural resources
A developed industrial base
Deep and broad middle class
Highly educated population
National infrastructure is in deep need of renewal, which creates new opportunities for sales to or contracting with government in areas such as rail, telecommunications, electricity, etc.
Government is oriented towards pro-market reforms, which already has led to a better business climate

Weak Points

Argentina's main weak points for FDI include:

A fragile and undercapitalised banking sector
Investments in electricity have proven insufficient
High inflation
High vulnerability toward commodity prices, especially those of agrarian products
Macro-economic imbalance
Fragile institutional framework

Government Measures to Motivate or Restrict FDI

The previous Argentinian Government led by President Macri had made significant economic changes, including an end to currency controls, new tax cuts and the collaboration with the IMF to improve the integrity of the country's economic data. The government led by Fernandez is also actively working to improve the transparency of administrative and regulatory processes.

Through legislative measures, Argentina tries to attract foreign investors in the gas, energy, technology, aeronautics and telecommunication sectors. Also, regional development plans for infrastructure have been launched. The development of access to internet, notably through the development of the fibre optic network, constitutes a promising investment opportunity promoted by the government. Argentina regularly organises events with foreign trade delegations. Programs to promote existing investments also exist, ranging from reimbursement of the VAT to sectoral incentives.

The local investment agency Invest in Argentina has been put under the direction of the Ministry of Foreign Affairs and a National Directorate for Investment Promotion has been recently established under the Under Secretary for Trade and Investment Promotion.

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Argentina: Argentina has signed bilateral agreements on investments with more than 60 countries.
To see the list of countries, click here.
International Controversies Registered By UNCTAD: For further information, consult UNCTAD's Investment Dispute Settlement Navigator.
Organizations Offering Their Assistance in Case of Disagreement: ICCWBO , International Chamber of Commerce
CAC , Argentine Chamber of Commerce
ICSID , International Centre for Settlement of Investment Disputes
Member of the Multilateral Investment Guarantee Agency: Yes, since 1992.

Country Comparison For the Protection of Investors	Argentina	Latin America & Caribbean	United States	Germany
Index of Transaction Transparency*	7.0	4.1	7.0	5.0
Index of Manager’s Responsibility**	2.0	5.2	9.0	5.0
Index of Shareholders’ Power***	6.0	6.7	9.0	5.0

Source: The World Bank - Doing Business, Latest data available.

Procedures Relative to Foreign Investment

Freedom of Establishment: Foreign private entities can establish and own business enterprises and engage in all forms of remunerative activity in nearly all sectors, with the same conditions as local companies. Foreigners can have the full equity ownership, with exception in the air transportation and media industries (maximum 49% for the former, 30% for the latter).
Acquisition of Holdings: Foreign investors are able to invest in all sectors of the economy on equal footing with national investors. The current investment regime is a liberal one. Foreign investment is not subject to any authorisation or declaration, regardless of the amount or the activity envisaged, even if this means taking a majority share in the capital of a local company. However, in sectors like the air transportation and media industries foreign ownership is restricted by the law (maximum 49% and 30%, respectively). Moreover, foreigners cannot own land that allows for the extension of existing bodies of water or that are located near a Border Security Zone, and cannot own more than 1,000 hectares (2,470 acres) in the most productive farming areas.
Obligation to Declare: Foreign investors that want to set up a business in Argentina follow the same procedures as domestic entities, without the need for prior approval. However, the company must register its name with the Office of Corporations (Inspeccion General de Justicia - IGJ), and must request that the College of Public Notaries submit the company’s accounting books to be certified with the IGJ.
Profits and dividends have to be declared in closed and audited financial statements.
Competent Organisation For the Declaration: Inspeccion General de Justicia
Requests For Specific Authorisations: There is no declaration, in principle, except for large projects which require the agreement of the competent ministry. For example: the TGV (high speed train) must receive authorisation from the Ministry of Infrastructure.
In certain sectors, like aviation and media, foreign ownership is restricted.

Office Real Estate and Land Ownership

Possible Temporary Solutions: There are several possible temporary solutions: domiciliation of the company at the private address of the director, and domiciliation in a business center.
The Possibility of Buying Land and Industrial and Commercial Buildings: Yes. It is possible to buy freehold, to build industrial and commercial premises or to buy through a real estate company.
However, foreigners cannot own more than 1,000 hectares (2,470 acres) in the most productive farming areas, and foreign ownership is rescricted to a maximum of 30% of national land and 15% of productive land.
Risk of Expropriation: Foreign investors are entitled to compensation if they are victims of expropriation (section 17 of the Constitution).

Investment Aid

Forms of Aid: The industrial promotion program is determined by Decree n° 2054/92, in force since 1 February 1992. It is the Under-Secretary for Investment's office, a division of the Secretariat for Commerce and Investment, which is in charge of deciding which sectors and regions to promote and the advantages foreign investors may lay claim to. The mechanism of aid to investment has been revised.

In principle, aid no longer takes the form of tax exemptions or reductions, but tax credits, covering the theoretical fiscal cost of the project, which is calculated according to the level of development of the area of activity being encouraged. Other forms of aid to investment have been developed: tax exemptions, special import regimes, accelerated depreciation for machines, equipment and infrastructure work.
Several tax incentives are available in the mining, forestry, biotechnology and energy sectors, as well as for investments in specific regions (like the Tierra del Fuego).
Privileged Domains: Public infrastructures, biofuels, hydrocarbons, software industry, mining sector, export of IT services, knowledge-based companies, forestry, biotechnology, etc.
Privileged Geographical Zones: Province of San Luis, Ushuaïa, Catamarca, La Rioja, San Juan, Tierra del Fuego, the Antarctic and the islands of the South Atlantic.
Free-trade zones: Map of all the free zones by the World Free Zones Organization
Public aid and funding organisations: Invierta en Argentina

Investment Opportunities

The Key Sectors of the National Economy: Agriculture, automobile, food processing, raw materials, agrarian and food processing machines, health.
High Potential Sectors: Call centres, information and communication technologies, natural resources management, hydrocarbons.
Privatization Programmes: During the 1990's, numerous economic sectors were opened to private interests, before being renationalised at the beginning of the 2000's.
The current administration led by Fernandez has not developed a privatization program yet.
Tenders, Projects and Public Procurement: GlobalTenders: Argentina , Tenders and projects in Argentina
Tenders Info: Argentina , Tenders in Argentina
DgMarket: Tenders Worldwide , Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors: Steel, concrete (hidden monopolies). For example, for concrete, two families control the market. For steel, there is one producer who controls competition. When a customer is no longer of interest to him, he leaves him to the others.
There are no longer any public monopolies. Nevertheless, FDI is limited in the aviation, media, rural property and aquifer reserves sectors.

Finding Assistance For Further Information

Investment Aid Agency: Argentine Agency of Investments and International Trade
Ministry of Foreign Affairs, International Trade and Worship
Other Useful Resources: Ministry of Economy
Doing Business Guides: Doing Business in Argentina (PwC)
Doing Business Guide on Argentina (Lexmundi)
Doing Business in Argentina Guide (Deloitte)

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