November 2016 Newsletter

Author:Navarro Castex Abogados
Profession:Navarro Castex Abogados
 
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What actually is a quote by U.S. Exim Bank Chairman Fred Hochberg, announcing the bank's resumption of operations in Argentina during the Business and Investment Forum, recently organized by the Argentine government in Buenos Aires (see www.argentinaforum2016.com), could just as well be the motto for the new direction Argentina has taken.

President Macri, elected in December 2015, promised to again make our country friendly towards business and foreign investment, and slowly but surely, this promise is starting to bear fruit. Protectionist regulations, in effect during the 12 year Kirchner reign, are being repealed and new policies aiming for liberalization and integration into global markets are put in place. Currency restrictions have been loosened, import restrictions almost fully abolished, export taxes either lowered or fully annulled. The currency exchange regime has been standardized and the Argentine Peso exchange rate now freely floats. Institutions like the Central Bank and statistics institutes have regained independence; in this respect, last Wednesday November 9, the IMF lifted the censure motion that weighed on the country since 2013, when the IMF had decided to sanction Argentina under consideration that country statistics under Néstor and Cristina Kirchner were being manipulated. Much before, in April 2016, the long-pending dispute with U.S. fund creditors - the so-called "holdouts" - was finally settled, allowing Argentina to again enter financial markets.

The general opinion - both internal and external - is that rule of law has been strengthened, and in spite of the great burden that a long period of Kirchner populism left Argentina with, the first 11 months of the new administration allow a positive outlook on the investment opportunities that Argentina has to offer. And these opportunities are numerous: The infrastructure sector, namely transport and energy, offer large investment projects in the coming years. Especially renewable energies have a lot to offer - already, Argentina is the world's leading producer of biofuels. But also the banking sector offers numerous opportunities, with a number of FinTech companies emerging.

High expectations are also put into the tourism sector. Antarctica cruises from the southern town of Ushuaia are at a record high. Late September, President Macri signed an executive order that allows foreign tourists to be refunded value-added tax paid on hotel services, which is estimated to...

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