In a regional context where countries compete to attract technology-based investments, Argentina continues to position itself as a strategic hub in Latin America. It does through the Knowledge-Based Economy Promotion Regime (Law 27.506).  

Context 

This public policy aims to encourage companies engaged in innovation-intensive activities by offering significant tax and labor incentives. The regime is particularly appealing for multinational corporations looking to establish operations in Argentina focused on service exports. 

Tax incentives applied 

Among its main advantages are a corporate income tax reduction of up to 60%.  Partial reimbursement of employer social security contributions in the form of tax credit is considered, as well as the ability to export services without VAT withholdings. Additionally, the regime guarantees 10 years of fiscal stability, ensuring that the overall tax burden will not increase during that decade, a highly valued condition for international investors. 

Which sectors are involved? 

The regime covers sectors such as software development, exportable professional services (engineering, architecture, accounting, legal), biotechnology, R&D, artificial intelligence, nanotechnology, and audiovisual production. Companies engaged in these activities may apply to the national registry. Therefore, once approved, they will begin enjoying the incentives immediately. 

Conclusions

For subsidiaries of multinational groups, the regime offers a concrete opportunity to reduce operating costs in USD. It leverages access to Argentina's highly skilled talent in IT, life sciences, and professional services. With a more predictable tax structure and strong export orientation, many global firms are already consolidating their service operations in Argentina to serve Latin America, North America, and Europe. 

In summary, the Knowledge-Based Economy Regime is currently one of Argentina's most robust tools for fostering productive investment. In a certain way, this country attracts foreign capital, and promotes sustainable economic development based on innovation and human capital. 

Argentina aims to re-establish itself as a key player in Latin America by promoting both domestic and foreign investment. If you are interested in efficient and secure management of your tax obligations there, or in any of the over 50 jurisdictions where we operate, do not hesitate to contact us. 

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At Auxadi, we offer comprehensive services in accounting, tax, payroll, transfer pricing and corporate legal services to multinationals and funds. With experience since 1979 and a presence in over 50 countries, including 22 proprietary subsidiaries, our advanced technological platform and proven methodology enable us to guarantee efficient management in compliance with local regulations.