Government broadens RIGI benefits for oil and gas, extends regime to 2027

The Argentine government enacted changes to the Large Investment Incentive Regime (RIGI, by its Spanish initials) approved in 2024, extending its duration and broadening benefits for the oil and gas sector.  The RIGI offers tax, customs, legal, and foreign exchange benefits for investments exceeding US$200 million. It is open to Argentine and international companies alike, but they have to invest in foreign currency. Via a decree, the administration extended the program for another year, until July 8, 2027. This was made possible by a provision included in the legislation that allowed the executive branch to extend the duration of the scheme once beyond its originally stipulated two-year duration. More benefits for oil and gas  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 interested in entering are required to have at least US$600 million in computable assets, in line with the same requirements for gas export projects. Furthermore, the norm defines new developments as those located in areas that were underdeveloped at the time the 2024 Bases Law was approved. It also states that interested parties cannot have other investments in exploration or production at the time of applying for inclusion. For offshore activities, meanwhile, the decree set the minimum investment amount for exploration and production at US$200 million, based on the risk profile and capital intensity. Other items included were criteria to avoid the artificial fragmentation of large projects, as well as a traceability requirement to distinguish what activities are covered and not covered by the regime when said activities coexist in the same geographic location. Changes to technology and amortization The decree redefines how the expansion of pre-existing projects will be judged, especially in the technology sector, which includes biotechnology, nanotechnology, electric mobility, aerospace, software, robotics, artificial intelligence, and the nuclear industry, among others. Expansion will be considered not only as an increase in production capacity but also as the incorporation of a new product with substantial technological changes, provided that it meets specific conditions, such as a minimum investment of US$250 million and a market life cycle of ten years or less. In terms of taxation, the decree established the scope of the special accelerated depreciation regime provided for in the original law. The enforcement authority, meanwhile, was empowered to authorize its use for infrastructure works, processing plants, and facilities related to the project. Likewise, provisions on dividend distribution, imports of capital goods, and access to the foreign exchange market were adjusted, including the calculation of foreign currency received by shareholders or related companies, provided that they are used exclusively for the Single Project Vehicle (VPU, in Spanish), the legal entity created to carry out one or more projects. The state of RIGI 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 under evaluation. Among them are projects in energy, mining, and infrastructure, distributed across provinces such as Neuqun, Ro 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. Originally published in mbito