Government launches new investment incentive program RIMI

The Argentine government on Monday published the regulations for the Incentive Program for Medium-Sized Investments (RIMI, for its Spanish initials) in the Official Gazette.  The programs goal is to encourage productive investments in micro, small, and medium-sized enterprises in goods, construction projects, and assets directly related to productive activities. RIMI aims to work as a small-scale version of the RIGI (Large Investment Incentive Regime, by its Spanish acronym), which according to Economy Minister Luis Caputo has already attracted investments exceeding US$200 million for more than 35 projects. To qualify for RIMI, investments must start at US$150,000 for micro-enterprises, US$600,000 for small businesses, US$3.5 million for tier-1 medium-sized businesses (defined according to parameters in total annual sales, number of employees, and total assets), and US$9 million for tier-2 medium-sized businesses. Companies will have up to two years to complete these investments and will then be eligible for a two-year accelerated amortization regime on program-covered assets for income tax purposes. To be eligible for the RIMI, companies must be registered as Micro, Small and Medium Enterprises (MIPyMES, in Spanish) before Argentina’s tax collection agency ARCA. Both domestic and foreign investors will be eligible for the program. The decree defines what constitutes a productive investment, including new depreciable movable assets excluding automobiles that are classified as Capital Assets or Information Technology and Telecommunications Assets. It also includes investments in agricultural irrigation systems, anti-hail nets, and depreciable livestock defined as breeding animals of superior genetics, purebred, or certified purebred.  For construction projects, eligible investments must be directly related to the beneficiarys activity and have a degree of completion of less than 30% of the total investment amount. Lastly, the program also includes high energy efficiency goods, such as investments intended to generate, store, and/or transmit electrical energy using renewable energy sources throughout the national territory or the optimization, recovery, or reduction of energy consumption in production facilities.