Foreign investment in Argentina - Santandertrade.com (2024)

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.