Foreign Exchange Laws & Regulations
Customs & Foreign Trade
On April 7, 2021, the Executive Branch published Decree N° 234/2021 establishing a new investment promotion regime for exports (the “Promotion Regime”), aiming to, among others, increase exports of goods and promote sustainable economic development. The Ministry of Economy and the Ministry of Productive Development will be the regulators of this Promotion Regime.
The Promotion Regime includes investments for new productive projects in, among others, forestry, mining, hydrocarbon, manufacturing and agro-industrial activities, as well as the expansion of existing business units, that require investment for the purposes of increasing their production.
The regulators may include and/or exclude activities from this Promotion Regime, but the Decree states that acquired rights will not be affected.
- Who can apply: Both legal entities and individuals, either residents or non-residents.
- Minimum direct investment: US Dollars one hundred million (U$S 100,000,000), calculated at the time of the project presentation.
- New project or expansion of existing business units in connection with the Included Activities. Financial and/or portfolio investments, and the mere merge/acquisition of companies shall not be considered.
- Exclusions:: (i) individuals and legal entities whose representatives/directors had been convicted for certain offenses with imprisonment and/or disbarment penalties for a certain period of time, (ii) individuals and legal entities that have due and unpaid tax or social security debts, or where imposed the payment of taxes, duties, fines or surcharges by a final judicial or administrative decision in connection with customs, foreign exchange, tax or social security matters, and (iii) persons that had defaulted, without justification, their obligations in connection with other promotion regimes. The regulators can decide to suspend the administrative procedures under this Promotion Regime if there is an on-going proceeding in connection with the crimes or infringements described above, and until there is a final decision on the matter.
- Commodities Exclusion. The export of certain commodities (including, among others, corn, wheat, wheat flour, biodiesel, soy, soy oil and corn oil) are excluded for the purposes of calculating the benefits of this Promotion Regime. The regulators will be able to include and/or exclude new exports, but the Decree states that acquired rights will not be affected.
- Compliance with investment and development plans. Beneficiaries must comply with the terms and conditions of the projects approved by regulators.
- “Free” application of 20% of export proceeds. The beneficiaries of this Promotion Regime will be able to apply up to 20% of the foreign currency proceeds obtained from the exports related to the project to (i) payment of principal and interest of foreign financial or commercial debts, (ii) payment of dividends and (iii) repatriation of direct investments of non-residents.
- Maximum amount. This benefit shall not exceed an annual maximum equivalent to 25% of the gross amount of foreign currency settled by such beneficiary through the FX market to finance the development of the project. Exports proceeds will not be considered for this calculation.
- Minimum period. Application can only be carried out after a year has elapsed since the settlement of the proceeds through the FX market.
- Termination.Benefits will cease (i) upon the expiration of the term of use, (ii) in certain cases, when the beneficiary does no longer have the capacity to carry out the activity that is the reason of the investment project, as set forth in the applicable regime, or (iii) if the beneficiary defaults its obligations under this Promotion Regime without justification.
- Term.The term to take advantage of the benefits of this Promotion Regime will be three (3) years. The regulators may extend this period for an equivalent period.
- Regulatory stability in foreign exchange matters. The Decree states that these Benefits cannot be affected by new FX regulations or restrictions for a period of 15 years since the issuance of the relevant Export Investment Certificate (as defined below).
Export Investment Certificate
Upon verification of the relevant requirements, the regulators will approve the project and issue an “Export Investment Certificate” for the purposes of accessing the benefits established by the Promotion Regime.
To access Decree 234/2021 (in Spanish), please click here .