Argentina’s Shock Therapy: Business and Investment Opportunities

This report is co-authored by JunHe LLP and Martinez de Hoz & Rueda (MHR) in Argentina, combining JunHe's leading capabilities in cross‑border investment and infrastructure with MHR's specialized knowledge of Argentina's RIGI framework, mining and energy regulations, and the latest policy reforms shaping the business environment for Chinese investors.

Since Javier Milei took office as the President of Argentina in late 2023, radical economic reform, known as 'shock therapy' has been rolled out. This has been guided by a strong market-oriented liberal agenda. A suite of policies including stringent fiscal austerity, deregulation, labor market liberalization, foreign exchange liberalization and the Large-Scale Investment Incentive Regime (RIGI) have been implemented. Argentina has also moved to broaden its investment incentive framework through the recently regulated Incentive Regime for Medium-Sized Investments (RIMI) and the recently announced Super RIGI proposal (Super RIGI), aimed at attracting transformative investments in new strategic industries. These measures have overhauled Argentina’s long-standing state-dominated economic model, transformed the local business landscape and presented international investors with a new balance of opportunities and risks.

From a broader comparative perspective, Argentina’s new investment regimes may also be understood as an attempt to create special regulatory environments for selected investment projects and productive activities. Although they do not replicate China’s Special Economic Zones, the RIGI, RIMI and the proposed Super RIGI share a similar underlying rationale: they offer more stable, predictable and investor-friendly frameworks in some sectors and project categories in order to attract private capital, generate exports and usher in technology and test reforms that may later influence the broader economy. This is particularly familiar to Chinese investors, as China’s own reform process relied heavily on gradual experimentation through special regulatory spaces, before successful policies were expanded nationwide.

I. Core Reform Framework

Centered on the Bases Act (Ley Bases) and a series of emergency decrees, the Milei administration has carried out structural overhauls of Argentina’s legal and 

economic framework, with a clear reform direction. They have shifted from heavy state intervention to a more market-oriented model with greater private sector participation and stronger incentives for productive investment.

In the fiscal sphere, the government has a zero-tolerance stance on fiscal deficits and has imposed rigorous austerity measures, slashed public spending and scrapped long-running subsidies for energy and transport. Thanks to fiscal consolidation, in 2024 Argentina posted its first monthly fiscal surplus in years, laying a foundation for macroeconomic stability. Sweeping deregulation abolished hundreds of regulatory rules governing market pricing, residential leasing and foreign trade. This has streamlined administrative procedures for enterprises and systematically reduced compliance costs and institutional transaction expenses. Parallel labor market reforms have cut dismissal costs for employers, extended probation periods for employees and weakened trade unions’ dominant role in collective bargaining. These changes have boosted labor market mobility and employment flexibility, addressing the longstanding problem of rigid labor practices for businesses.

Monetary and foreign exchange practices are also moving toward normalization. Although full dollarization has not yet been finalized, the government has relaxed certain foreign exchange controls (commonly known as the Cepo) that have been in place for over a decade. They have gradually lifted import quotas and narrowed the gap between the official and parallel market exchange rates, removing major barriers for cross-border trade and capital flows. However, given that foreign exchange rules in Argentina have changed frequently in the past, investors should continue to assess currency access, dividend remittance and debt repayment mechanisms on a transaction-by-transaction basis.

II. Positive Changes in the Business Environment

These ongoing reforms have delivered tangible improvements to Argentina’s business climate, with the return of investment predictability standing out as the most notable breakthrough. The era of frequent policy swings and inadequate protection for foreign investment has been partially reversed, enabling enterprises to pursue long-term operations and investment planning within a more stable and predictable institutional environment. This improvement is particularly relevant for sectors requiring large upfront capital expenditures, long construction periods and extended payback horizons.

At the operational level, deregulation has eased administrative burdens on businesses. The repeal of outdated rental laws and comprehensive price controls has revitalized market supply, enhanced flexibility in commercial leasing and industrial supply chains, and steadily improved corporate operational efficiency. Macroeconomic conditions have also taken a turn for the better. Despite a temporary spike in inflation in the early stage of reforms, tightening fiscal policies and the halt to excessive money supply have brought inflation down markedly from 2025 to 2026, easing the risk of hyperinflation and creating favorable conditions for enterprises to formulate long-term financial plans and stabilize investment expectations.

Impacts vary across industries. The energy and mining sectors have fully benefited from the RIGI incentives, foreign exchange liberalization and tax relief, witnessing substantial improvements in their operating environment. The agricultural sector has gained stronger international competitiveness thanks to exchange rate adjustments and supporting export policies. The technology and export service industries have maintained a steady performance with a generally positive outlook. The RIMI may broaden the scope of Argentina’s investment incentive framework beyond mega-projects, offering a more accessible tax incentive tool for medium-sized productive investments, particularly where the investor’s Argentine vehicle qualifies as an eligible micro, small or medium-sized enterprise. In contrast, the manufacturing and construction sectors face headwinds in the short term due to sluggish domestic consumption, although targeted investment incentives and potential infrastructure-related projects may gradually improve their medium-term outlook.

III. Core Institutional Safeguards

As a cornerstone policy of the Milei administration’s reform agenda, the Large-Scale Investment Incentive Regime (Régimen de Incentivo a las Grandes Inversiones, RIGI) is pivotal to understanding the current investment opportunities in Argentina. Designed to attract long-term capital with minimum investment thresholds, the RIGI offers 30 years of legal stability and prioritizes strategic sectors including energy, mining and large-scale infrastructure. Together with the RIMI and the proposed Super RIGI, the regime reflects a broader policy trend, using statutory stability, tax relief and foreign exchange flexibility to attract investments across different scales and strategic sectors.

The RIGI is not a universal preferential policy and sets clear requirements for large-scale and long-term investment. The minimum investment threshold stands at USD 200 million for general industries. For onshore oil and gas exploration and production projects, the requirement rises to USD 600 million, while oil and gas transportation and storage projects require USD 300 million. Long-term strategic export projects that help Argentina expand into new international markets face even higher investment requirements, ranging from USD 1 billion to 2 billion.

Projects approved under the RIGI are required to complete 40% of their total planned investment within the first two years after approval. All projects must be operated via a dedicated Special Purpose Vehicle (SPV), which segregates the RIGI-qualified assets from a company’s other businesses to ensure targeted policy implementation and effective risk isolation.

In terms of preferential terms, the RIGI establishes a three-dimensional incentive framework covering taxation, tariffs and foreign exchange, breaking the cycle of frequent policy changes over the past decade.

• Taxation. A fixed corporate income tax rate of 25% applies, replacing the previous progressive rate ranging from 25% to 35%. Movable assets are eligible for accelerated depreciation over two years, and the depreciation period for infrastructure is lessened to 60% of its estimated service life, greatly improving early-stage cash flow. Corporate losses can be carried forward indefinitely to offset taxable income, and unclaimed losses after five years may be transferred to third parties. The dividend tax rate is set at 7% for the first seven years of profitability and drops to 3.5% thereafter. Bank debit taxes paid by enterprises are 100% deductible against income tax, compared with a 33% deduction cap for ordinary businesses.

• Tariffs. Import duties and related statistical taxes are exempted for capital goods, machinery, equipment, spare parts and raw materials. For exports, general projects enjoy full export tax exemption three years after joining the RIGI, while strategic export projects qualify for the exemption after just two years, significantly cutting cross-border operational costs for resource-focused projects.

• Foreign exchange and capital mobility. The RIGI resolves the long-standing challenge for foreign investors of 'easy capital inflow but difficult outflow'. Enterprises may retain export earnings overseas: general projects can retain 20% of foreign exchange earnings starting from the second year, 40% from the third year and 100% from the fourth year onwards. Strategic export projects are entitled to 100% retention of export foreign exchange starting from the third year. Project capital and loan funds are exempt from mandatory conversion at official foreign exchange markets. Enterprises are legally guaranteed the right to purchase foreign exchange and repatriate profits, dividends and interest, substantially mitigating capital repatriation risks.

Most importantly, the RIGI legally locks in 30 years of policy stability. Once a project is approved, all preferential policies and relevant administrative regulations will remain unchanged for three decades. Even if future governments revise laws, raise taxes or tighten foreign exchange controls, approved projects will continue to operate under the original preferential terms. Investors have the right to initiate international arbitration if the Argentine government violates the RIGI rules and this builds a solid legal safeguard for capital-intensive, long-cycle energy and mining projects.

The RIGI has delivered a strong boost to strategic industries such as mining, oil and gas, and is particularly well-suited for capital-heavy, long-cycle resource projects. Lithium and copper are Argentina’s core mineral exports. Backed by 30 years of stable policies, the RIGI eliminates concerns over policy fluctuations during the 8–10 year construction cycle of mines. Coupled with accelerated depreciation rules, the regime eases pressure on large upfront capital expenditures and optimizes project cash flow.

Chinese enterprises have deepened their engagement in Argentina’s resource sector. Two projects led by Chinese firms have recently obtained RIGI approval: the expansion of Ganfeng Lithium’s Cauchari Olaroz Salt Lake project and Shandong Gold’s Veladero Gold Mine expansion project. By contrast, Ganfeng Lithium’s Mariana Salt Lake project was rejected. The project had already made substantial progress prior to the launch of RIGI, but failed to meet the core criteria regarding minimum investment commitments for the first two years and the requirements for new strategic investment. This outcome aligns with the RIGI’s fundamental positioning of exchanging long-term policy certainty for substantial incremental investment. It reflects the Argentine government’s approach of actively attracting foreign investment while strictly reviewing a project's eligibility, ensuring policy benefits are targeted at new, high-quality and large-scale strategic investments.

It should be noted that pursuant to Law No. 27.742, the RIGI can only be extended once. Decree No. 105/2026 has extended the application window to July 8, 2027, making this the final statutory deadline. Enterprises are advised to seize this critical investment window.

In addition to the RIGI, Argentina has also regulated the RIMI, a promotional regime created under Law No. 27,802 and aimed mainly at encouraging productive investments by micro, small and medium-sized enterprises. Unlike the RIGI, which is focused on large-scale strategic projects, the RIMI targets smaller but still significant productive investments made within two years following the regime’s application.

The RIMI may become relevant for Argentine subsidiaries, local suppliers, industrial companies and agribusiness operators that do not meet the RIGI’s investment thresholds but are willing to undertake productive investments in Argentina. Eligible investments include new depreciable movable assets (such as capital goods and information and telecommunications equipment), productive works directly connected to the beneficiary’s activities in Argentina, agricultural irrigation systems, high energy-efficiency assets, hail-protection meshes and certain depreciable livestock assets.

The minimum investment amounts vary depending on the size of the company: (i) USD 150,000 for microenterprises; (ii) USD 600,000 for small enterprises; (iii) USD 3.5 million for medium-sized enterprises Segment 1; (iv) and USD 9 million for medium-sized enterprises Segment 2. However, certain investments —including agricultural irrigation systems, high energy-efficiency assets, hail-protection meshes and depreciable livestock assets— may qualify regardless of the amount invested.

From a tax perspective, the RIMI mainly grants two benefits. First, beneficiaries may opt for accelerated income tax depreciation, allowing them to deduct the depreciation of eligible assets over shorter periods than those generally applicable. Second, it allows beneficiaries to request the refund of VAT credits generated by eligible productive investments after three monthly tax periods, improving cash flow and reducing the financial cost of investment.

The government has also announced a Super RIGI initiative, conceived as a more favorable framework for new strategic industries and transformative projects, including in areas such as the lithium value chain, battery manufacturing, green or low-emission hydrogen, onshore LNG, small and medium modular nuclear reactors, solar panels, wind turbines, fully electric vehicles, petrochemicals, aerospace-related products, uranium value chain projects and other advanced industrial activities. As announced, the proposed Super RIGI would contemplate a 15% corporate income tax rate, accelerated depreciation of 60% in the first year and 20% in each of the following two years, export duty exemptions and broader import tariff exemptions for the assets required for project implementation.

However, since the Super RIGI is still subject to legislative and regulatory implementation, it should be analyzed as an emerging opportunity rather than an immediately available one. Investors considering projects potentially covered by the Super RIGI should monitor congressional approval and the provincial and municipal requirements, as well as the final scope of eligible activities, local tax limitations and foreign exchange benefits.

IV. Observations and Recommendations

Argentina’s current business environment is characterized by high risk alongside its substantial potential return. The country is aligning its policies with international standards, with notable improvements in the rule of law, transparency and investment certainty, and major policy dividends emerging for the energy and mining sectors. Nevertheless, risks persist including social strain, political uncertainty and macroeconomic volatility. Investors should also consider Argentina’s federal structure, as provincial and municipal implementation may be decisive for matters such as mining, energy, infrastructure, environmental permits, local taxes and land access.

Overall, for multinational enterprises with strong risk resilience and long-term layouts in global resource sectors, Argentina’s sweeping market-oriented reforms have opened up a rare long-term strategic investment window. Leveraging policy dividends and industrial strengths, enterprises may prioritize sectors such as lithium, copper, shale oil and gas, and modern agriculture to capitalize on opportunities brought by the RIGI incentives and foreign exchange liberalization. Investors with exposure to industrial technology, battery materials, renewable energy components, digital infrastructure, nuclear technology or advanced manufacturing should closely monitor the evolution of the proposed Super RIGI. Medium-sized productive projects and local supplier structures should also be reviewed under the RIMI.

For large-scale resource investment projects, applying for RIGI inclusion is recommended. The 30-year statutory policy stability can effectively hedge against policy fluctuations over the project's lifecycle. Enterprises also need to conduct comprehensive due diligence and compliance reviews in advance, focusing on the local provinces’ implementation progress of the RIGI. It is essential to strictly adhere to local laws on labor, environmental protection and cross-border foreign exchange management. It is also advisable to stipulate international arbitration as the dispute resolution option in cooperation agreements to strengthen investment security.

For medium-sized productive projects, the RIMI should be assessed at an early structuring stage, particularly where the investment involves local manufacturing, agribusiness, productive infrastructure, energy-efficiency improvements, irrigation systems, technology assets or supplier development linked to larger projects. Before committing capital expenditure, investors should verify whether the local entity qualifies as a micro, small or medium-sized enterprise, whether the investment meets the applicable minimum threshold or falls within one of the categories exempt from such a threshold, and whether the project may be affected by the incompatibility between the RIMI, the RIGI and the other incentive regimes.

Given that Argentina is still undergoing institutional reforms and political adjustments, enterprises are advised to track public opinion, social stability and political developments ahead of the 2027 presidential election and monitor potential adjustments to the Milei administration’s reform policies. This is to advance long-term investment layouts in a steady manner, amid ongoing industrial transformation, and strike a balance between investment safety and returns. In particular, investors should monitor the final legislative treatment of the Super RIGI, the practical implementation of the RIMI by the tax authorities and the provinces’ adherence to and application of the RIGI-related rules.

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