Foreign Markets Opportunities

July 14, 2021
Private: Adriana Jassan


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Software Industry in Argentina

Software is the most fast-paced growing industry in Argentina in recent years and continues growing steadily. It´s an industry that puts forward a highly competitive offer in the global market and is ranked in 3rd place in the country’s export goods.

After the enactment of both National Law N° 25.856 that declares software production as an industry and National Law N° 25.922 of ‘Promotion of the software industry’ a stable legal frame as well as tax advantages made profitable the industry and became the most dynamic area of business in the country.

Furthermore, with the enactment of the Knowledge Economy Law in 2020, that aims to promote new technologies, generate added value, promote quality employment, facilitate the development of small and medium-sized companies increasing the exports of companies providing knowledge-based services, a direct impact on investment in research and development is expected; in addition to the creation of highly qualified jobs, the income of foreign exchange and reduction of the tax burden on companies in the sector. This creates better conditions and opportunities for the development of technological innovations, considering a safe regulatory framework for the software industry.

Are qualified to adhere to this regime companies formed in Argentina or authorised to act in the country having as their main business activity the creation, design, development, production, and implementation of software and fulfill at least one of the following conditions:

  1. Accreditation of expenses in software research and development activities.
  2. Accreditation of a recognized quality standard applicable to software products or processes, or the development of activities with these objectives.
  3. Execution of software exports

Regarding tax benefits, the issuance of a non-transferable tax credit bond is foreseen for an equivalent amount up to 70% or 80% of the employer contributions – depending on the case- which may be used to pay the Value Added Tax (VAT) and other national taxes during 24 months after their issuance, extendable for a further 12 months.

Besides the forementioned advantages and regarding international data transfer, Argentina is considered a third country that guarantees an adequate level of protection, and therefore personal data can be transferred from EU States without the need of any additional guarantee in accordance with Decision 2003/490 / EC of the Commission of the European Communities. Likewise, the ‘New version of the draft of Data Protection Law’ is being debated in commissions of the Chamber of Deputies of the National Congress that, once approved, will modify the current National Law 25.326, modernizing its text respecting rights and guarantees established by the National Constitution, adapting them to new technologies and regulatory changes that took place in comparative law.

In sum, current regulations promoting the software industry as well as the knowledge industry, a country that guarantees adequate levels of protection for international data transfer, plus the high qualification of the sector to respond the demands of the global market make Argentina an attractive destination both to establish technology-based companies or to hire software developments in the country.