Argentina flag Argentina: Investing in Argentina

Foreign direct investment (FDI) in Argentina

FDI in Figures

FDI inflows in Argentina have been unstable for several years. According to the 2022 World Investment Report published by UNCTAD, Argentina's FDI inflows returned to pre-pandemic levels in 2021, as they increased from USD 4 billion in 2020 to USD 6.5 billion, largely driven by mining projects. Moreover, FDI stocks amounted to USD 98 billion in 2021. That same year, the number of Greenfield Investments in the country nearly doubled, reaching 101 (compared to 63 in 2020). However, the value of those investments decreased from USD 4 billion in 2020 to 3.8 billion in 2021. Furthermore, Argentina has been seeing a significant growth in M&A in recent years, totalling USD 1.1 billion in 2021, mainly driven by investments in technology companies. On the other hand, major international investors (including Walmart (US), Schlumberger (US), MetLife (US) and Danone (France)) have sold their local businesses to domestic or regional investors. Still, there have been noteworthy investments made in the country recently. Among them, is the acquisition of Wolox, a leading Argentinean cloud native and agile development company, by U.S-based Accenture. With a USD 3 billion investment over the next three years, the group seeks to bring together an unmatched depth of cloud expertise to Argentina.
The US, Spain and the Netherlands represent more than the 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. On the other hand, restrictions have been placed on FDI in the agricultural sector, which is highly important for the country's food security. Moreover, more recently implemented measures (a restrictive property law and nationalisations in the energy sector, which have affected the Spanish oil giant Repsol) have discouraged potential investors. Nevertheless, in 2021, Chinese companies Zijin Mining Group and Contemporary Amperex Technology Ltd invested USD 1 billion on rights over three lithium mines in Argentina. On the other hand, Argentina has been implementing measures to attract investors, such as adopting a preferential tax regime for the automotive sector, which has promoted regional car production chains among Mercosur countries. However, the business climate in Argentina is still rather poor. According to the Economist Business Environment, Argentina ranks 69 out of the 82 countries reviewed for their investment climate.

Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 4,7236,78215,087
FDI Stock (million USD) 85,37199,890116,710
Number of Greenfield Investments* 6310472
Value of Greenfield Investments (million USD) 4,0776,4337,164

Source: UNCTAD, Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

Country Comparison For the Protection of Investors Argentina Latin America & Caribbean United States Germany
Index of Transaction Transparency* 7.0 4.1 7.0 5.0
Index of Manager’s Responsibility** 2.0 5.2 9.0 5.0
Index of Shareholders’ Power*** 6.0 6.7 9.0 5.0

Source: Doing Business, Latest available data

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

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What to consider if you invest in Argentina

Strong Points

Argentina's strong points for FDI include:

  • Richness of natural resources
  • A developed industrial base
  • Deep and broad middle class
  • Highly educated population
  • National infrastructure is in deep need of renewal, which creates new opportunities for sales to or contracting with government in areas such as rail, telecommunications, electricity, etc.
  • Government is oriented towards pro-market reforms, which already has led to a better business climate
Weak Points

Argentina's main weak points for FDI include:

  • A fragile and undercapitalised banking sector
  • Investments in electricity have proven insufficient
  • High inflation
  • High vulnerability toward commodity prices, especially those of agrarian products
  • Macro-economic imbalance
  • Fragile institutional framework
Government Measures to Motivate or Restrict FDI
The previous Argentinian Government led by President Macri had made significant economic changes, including an end to currency controls, new tax cuts and the collaboration with the IMF to improve the integrity of the country's economic data. The government led by Fernandez is also actively working to improve the transparency of administrative and regulatory processes.

Through legislative measures, Argentina tries to attract foreign investors in the gas, energy, technology, aeronautics and telecommunication sectors. Also, regional development plans for infrastructure have been launched. The development of access to internet, notably through the development of the fibre optic network, constitutes a promising investment opportunity promoted by the government. Argentina regularly organises events with foreign trade delegations. Programs to promote existing investments also exist, ranging from reimbursement of the VAT to sectoral incentives.

The local investment agency Invest in Argentina has been put under the direction of the Ministry of Foreign Affairs and a National Directorate for Investment Promotion has been recently established under the Under Secretary for Trade and Investment Promotion.

Bilateral investment conventions signed by Argentina
Argentina has signed bilateral agreements on investments with more than 60 countries.

To see the list of countries, click here.

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Latest Update: November 2023

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