The Argentine government has implemented modifications to the Large Investment Incentive Regime (RIGI, by its Spanish initials) that was approved in 2024, extending its duration and expanding benefits for the oil and gas sector. The RIGI provides tax, customs, legal, and foreign exchange advantages for investments that surpass US$200 million. It is accessible to both Argentine and international companies; however, they must invest in foreign currency. Through a decree, the administration has prolonged the program for an additional year, extending it until July 8, 2027. This was made possible by a provision included in the legislation that permitted the executive branch to extend the duration of the scheme once beyond its originally stipulated two-year duration. One of the most significant changes enacted by the decree was the inclusion of projects aimed at exploring new onshore liquid and gaseous hydrocarbon developments. Initiatives looking to enter must possess a minimum of US$600 million in computable assets, adhering to the same criteria set for gas export projects.
Furthermore, the norm defines “new developments” as those situated in areas that were underdeveloped at the time the 2024 Bases Law was approved. It also states that interested parties cannot hold other investments in exploration or production at the time of applying for inclusion. The decree established that for offshore activities, the minimum investment required for exploration and production is set at US$200 million, taking into account the risk profile and capital intensity. Included among the other items were criteria aimed at preventing the artificial fragmentation of large projects, along with a traceability requirement designed to clarify which activities are encompassed by the regime and which are not when such activities exist within the same geographic area. The decree redefines the criteria for evaluating the expansion of existing projects, particularly within the technology sector, encompassing areas such as biotechnology, nanotechnology, electric mobility, aerospace, software, robotics, artificial intelligence, and the nuclear industry, among others.
Expansion will be viewed not merely as an increase in production capacity but also as the introduction of a new product featuring significant technological advancements, contingent upon meeting certain criteria, including a minimum investment of US$250 million and a market life cycle of ten years or fewer. The decree defined the parameters of the special accelerated depreciation regime outlined in the original law regarding taxation. The enforcement authority, meanwhile, was granted the power to authorize its use for infrastructure works, processing plants, and facilities associated with the project. Similarly, adjustments were made to provisions regarding dividend distribution, imports of capital goods, and access to the foreign exchange market. This includes the calculation of foreign currency received by shareholders or related companies, on the condition that it is utilized solely for the Single Project Vehicle (VPU, in Spanish), the legal entity established to execute one or more projects.
Economy Minister Luis Caputo confirmed the extension and regulatory changes. “We are extending the RIGI for one year and improving it to make it clearer and more efficient. We are adding new developments in oil and gas with a minimum investment of US$600 million and streamlining regulations to facilitate implementation and provide greater predictability,” he said. He specified that 10 projects totaling US$25.5 billion have already been approved, with a few others currently under evaluation. Included are initiatives in energy, mining, and infrastructure, spread throughout provinces like Neuquén, Río Negro, San Juan, Mendoza, Salta, Buenos Aires, Catamarca, and Santa Fe. Among other benefits, the RIGI reduced the income tax rate from 35% to 25%, while also granting an exemption from export duties and dispute resolution mechanisms, with the aim of attracting large-scale, long-term investments.