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Print articleDoing business. “Investing in Argentina” (chapter published in the guide Practical Law, Thomson Reuters, July 1, 2015).
September, 2015 - Javier L. Magnasco
This Q&A gives an overview of the key factors affecting inward investment, including information on the jurisdiction's legal system; key laws and regulatory authorities; investment restrictions; and details of international treaties, customs and monetary unions. The guide also provides information on investor individuals; visa permits; restrictions on foreign ownership; transfer pricing and thin capitalisation rules; imports and import duties; safety regulations and standards for commercial goods and services; structuring and tax incentives;investment guarantees; recent developments and proposals for reform.Contents:
- Legal system
- Investor individuals
- Investment restrictions
- Imports
- Structuring and tax
- Incentives
- Recent developments and proposals for reform
- Main investment organisations
- Online resources
- Contributor profile:Javier L Magnasco, Partner
Inward investment has declined in the past five years because of unfriendly economic policies rather than any economic fundamental issue. These policies relate to:
- Certain foreign exchange restrictions.
- A disregard by the Federal authorities of different tariff agreements with utility companies.
- A hostile approach towards the rural sector, which is the more relevant in the country.
De facto restrictions include royalties and dividend transfers.This unattractive scenario has prevented foreign investment in Argentina and has caused interest rates for the country to rise to unbearable levels.Argentina missed great economic opportunities in the past taking into account that it is acommodity-oriented country and those prices were at unusual high levels for a long period of time. Infrastructure is needed, as well as mining, oil and gas investments, since there are plenty of proved reserves in those fields. However, erratic government policies have frustrated companies in this sector as well as potential foreign investors.The country did not attract the same level of foreign investment as nearly all the other countries in the region, except for Venezuela. Even Bolivia had access to the international Capital Markets at less than half the interest rate that Argentina would have had to pay. (...)
