Foreign Direct Investment

FDI inflows in Argentina have been unstable for several years. According to the World Investment Report 2023 published by UNCTAD, after returning to their pre-pandemic levels in 2021, Argentina's FDI inflows totalled USD 15 billion in 2022, up by 122.5% year-on-year. At the end of the same year, the total stock of inward FDI stood at USD 116.7 billion, around 18.8% of the country’s GDP. In 2022, Argentina accounted for 6.9% of the total FDI inflows into Latin America and the Caribbean, ranking as the fifth most significant country in terms of attracting funds from these types of investments. Furthermore, Argentina's share of FDI inflows relative to the total for the region increased for the third consecutive year (data Comisión Económica para América Latina y el Caribe). The U.S., Spain and the Netherlands represent more than half of FDI inflows. Other main investing countries are Brazil, Chile, Switzerland, Uruguay, France, Germany, and Canada. These investments have been mainly oriented towards manufacturing, mine and oil extraction, retail, banking and other financial entities, information and communication, and agriculture.

The Argentine government actively seeks foreign direct investment, but economic insecurity and recurring crises hamper the task. The overall openness to foreign investment is below average. Still, Argentina has definite assets: its natural resources are considerable (copper, gas and oil) and its workforce is highly skilled and competitive. Both foreign and local investors typically operate under equitable conditions in Argentina. Nevertheless, foreign participation is barred in certain sectors like aviation and media. Additionally, there are limitations on foreign ownership of rural lands, water bodies, and border areas. Moreover, both domestic and international firms often cite a burdensome and unpredictable tax load along with inflexible labour regulations as hindrances to additional investment in Argentina. The Ministry of Foreign Affairs, International Trade, and Worship is the lead governmental entity for investment promotion, and there is currently no investment screening mechanism in place for inbound foreign investment. Argentina recently introduced tax incentives for investors in the automotive sector, which encompass accelerated depreciation and prompt reimbursement of VAT on purchases of new capital equipment, along with complete exemption (a zero percent rate) from export tariffs on manufactured goods generated by investment initiatives. Argentina ranks 73rd among the 132 economies on the Global Innovation Index 2023 and 145th out of 184 countries on the 2023 Index of Economic Freedom. Lastly, the country scored 37/100 in the latest Corruption Perception Index, ranking 98th out of 180 countries.