Opportunities for International Investors Essay -- Essays Papers

Opportunities for International Investors ATTITUDES TOWARDS FOREIGN INVESTMENT Because the Foreign Investments Law and supplementary rules establish the principle of equal treatment for domestic and foreign investors, foreign investors enjoy the same rights and duties as Argentine investors. However, the government no longer grants special incentives. Argentina welcomes foreign investments, and its laws governing foreign investment are among the most liberal in the world. In general, Argentina encourages investments through a free-market policy and low income tax rates rather than through subsidies. The basic attitude towards foreign capital is very positive; all previously existing requirements concerning prior government approval of foreign investments have been eliminated. Argentina has traditionally been very hospitable to foreigners. The Argentine government is making active efforts to attract foreign investments. Foreign investments obviously have also played a very important role in the privatization process, referred to below. Domestic capital resources are not sufficient for economic development; the government therefore encourages the inflow of foreign investment. Because Argentina formerly followed a protectionist economic policy to promote inward development, economic activity was excessively regulated. Under a new strategy to encourage foreign trade, rules that obstructed foreign trade have been modified or eliminated. Further, permission is no longer required to import goods, the import tariff structure has been simplified and tariffs have been reduced. Taxes on exports have been almost eliminated. All restrictions and procedures that in the past slowed down the entry of capital and technology from abroad have been abolished. Changes in foreign investment regulations have eliminated obstacles to the inflow of capital into Argentina. RESTRICTIONS ON INTERNATIONAL INVESTMENTS. All restrictions on foreign investments have been lifted and foreign investment does not require any prior approval from the Argentine authorities. Although some remain in sensitive areas such as defense, telecommunications, and oil and gas. Profits may be freely transferred. STATE ASSISTANCE AND GRANTS Special incentives for certain activities and tax reimbursements on exports, among others, are granted under identical conditions to nationa... ... and its eight hypermarkets. Royal Ahold also has a large operation; the Dutch retailer is joint owner of 235 Disco supermarkets. Any improvement for Wal-Mart in Argentina rests on its ability to increase its size substantially and on the economy improving; the outlook for the latter is still suspect. The economy performed worse than expected last year and the outlook for this year, according to the International Monetary Fund, is for 2.5% gross domestic product growth. Interest rates have fluctuated wildly, but the prime lending rate was still in the upper teens at press time.The government has attempted to institute reforms that will stimulate the economy and restore growth. Bibliography Howell, Llewellyn D. and Chad*censored*, Brad, "Models of Political Risk for Foreign Investment and Trade," Columbia Journal of World Business, Fall 1994a. Levy, John B. and Yoon, Eunsang, "Methods of Country Risk Assessment for International Market - Entry Decision," Institute for the Study of Business Markets (ISBM), Report 11-1996. CNN- News Net Work/ business & Finance McGraw-Hill; International Business. e7th; p.191 www. Businessmonitor.co.uk World Bank / Argentina Opportunities for International Investors Essay -- Essays Papers Opportunities for International Investors ATTITUDES TOWARDS FOREIGN INVESTMENT Because the Foreign Investments Law and supplementary rules establish the principle of equal treatment for domestic and foreign investors, foreign investors enjoy the same rights and duties as Argentine investors. However, the government no longer grants special incentives. Argentina welcomes foreign investments, and its laws governing foreign investment are among the most liberal in the world. In general, Argentina encourages investments through a free-market policy and low income tax rates rather than through subsidies. The basic attitude towards foreign capital is very positive; all previously existing requirements concerning prior government approval of foreign investments have been eliminated. Argentina has traditionally been very hospitable to foreigners. The Argentine government is making active efforts to attract foreign investments. Foreign investments obviously have also played a very important role in the privatization process, referred to below. Domestic capital resources are not sufficient for economic development; the government therefore encourages the inflow of foreign investment. Because Argentina formerly followed a protectionist economic policy to promote inward development, economic activity was excessively regulated. Under a new strategy to encourage foreign trade, rules that obstructed foreign trade have been modified or eliminated. Further, permission is no longer required to import goods, the import tariff structure has been simplified and tariffs have been reduced. Taxes on exports have been almost eliminated. All restrictions and procedures that in the past slowed down the entry of capital and technology from abroad have been abolished. Changes in foreign investment regulations have eliminated obstacles to the inflow of capital into Argentina. RESTRICTIONS ON INTERNATIONAL INVESTMENTS. All restrictions on foreign investments have been lifted and foreign investment does not require any prior approval from the Argentine authorities. Although some remain in sensitive areas such as defense, telecommunications, and oil and gas. Profits may be freely transferred. STATE ASSISTANCE AND GRANTS Special incentives for certain activities and tax reimbursements on exports, among others, are granted under identical conditions to nationa... ... and its eight hypermarkets. Royal Ahold also has a large operation; the Dutch retailer is joint owner of 235 Disco supermarkets. Any improvement for Wal-Mart in Argentina rests on its ability to increase its size substantially and on the economy improving; the outlook for the latter is still suspect. The economy performed worse than expected last year and the outlook for this year, according to the International Monetary Fund, is for 2.5% gross domestic product growth. Interest rates have fluctuated wildly, but the prime lending rate was still in the upper teens at press time.The government has attempted to institute reforms that will stimulate the economy and restore growth. Bibliography Howell, Llewellyn D. and Chad*censored*, Brad, "Models of Political Risk for Foreign Investment and Trade," Columbia Journal of World Business, Fall 1994a. Levy, John B. and Yoon, Eunsang, "Methods of Country Risk Assessment for International Market - Entry Decision," Institute for the Study of Business Markets (ISBM), Report 11-1996. CNN- News Net Work/ business & Finance McGraw-Hill; International Business. e7th; p.191 www. Businessmonitor.co.uk World Bank / Argentina