Latin America Aims for Tax Stability to Promote Growth, Business

Pro-business tax policies being introduced in Latin American countries such as Argentina, Bolivia, Chile, Paraguay, and Perú indicate that the idea of offering attractive tax incentives is slowly but surely gaining traction among policy makers craving higher growth and improved tax collections.

At the core of current LATAM tax incentives, it’s evident that governments are aware that the unpredictability of the region is damaging its capacity to attract investment, regardless of how big or developed the respective economies are within the region. To that end, tax stability regimes provide a safeguard to investors wary of zigzagging tax policies.

Incentives are no longer simply about lowering tax rates. They also must consider an attractive regulatory framework, with Perú leading with the example of giving private entities a larger self-regulating role on certain matters.

Unfortunately, the region seems to have a hard time escaping continuous tax amnesty programs, which by their sheer frequency are evidence that acting outside the legal system can reasonably be expected to be forgiven.

Regional Incentives

In Argentina, the Milei administration has tried to replicate its tax stability regime aimed at investments more than $200 million, RIGI, with a similar initiative now targeting medium businesses up to $9 million, RIMI—characterized by a super amortization and the option to obtain value-added tax refunds on the acquisition of fixed assets and infrastructure work.

But the Milei administration didn’t stop there. This year it has pushed for a hybrid regime akin to a tax amnesty, offering a window for eligible Argentine individuals to come clean with undeclared savings in foreign currency, typically hidden to escape the exchange controls imposed by the former administration or to avoid taxes on assets deemed by some as confiscatory.

With a similar take, the Bolivian government has attempted to propose a 15-year tax stability regime, covering corporate income tax rates and trade tariffs, which for 2026 have been brought down to 0% if the imports are related to strategic economic sectors. Like Argentina, Bolivia has also shown interest in an amnesty regime for foreign undeclared assets, with no tax penalties provided they remain invested in Bolivia for at least 24 months.

Chile and its new administration are set to reconsider establishing a tax stability regime similar to the one that has boosted mining investments since the 1970s. Under the new program, Chile would grant tax stability to investments of at least $50 million for up to 10 years. It will be interesting to see how such an offer is received by investors, who saw how, 11 years ago, the government bent over backwards trying to convince foreign investors to abandon it.

Paraguay, a jurisdiction known for setting favorable conditions for investors in the interest of promoting growth, has come up with a tax package offering exemptions favoring foreign debt, with interest and commissions exempt from income taxation, while also exempting dividends paid to foreign investors from income taxation provided that:

• The investment is at least $13 million
• The investor isn’t using a zero-tax jurisdiction holding structure
• If income taxation were to be applied, the investor isn’t allowed a tax credit in its country of residence

None of the above seems as bold as what Perú has put in place via its private special economic zones created at the end of 2025. These are run by investors rather than a public entity, and benefit from special tax treatment for 25 years with an income tax exemption for the first five years, increasing gradually to 15%, complete exemption from VAT, municipal taxes and excise taxes, and a tax stability regime.

Going Forward

Considering tax incentives at a time of extremely volatile regional conflicts, wide use of trade tariffs as a way of exercising the economic muscle of the world’s most powerful economies, and chaotic and faltering implementation of the global minimum tax, is a matter that requires the utmost level of care.

Yet even though taxation is just one issue in the current global geopolitical landscape, it must be considered that LATAM sits away from the center of warfare, that its most visible geopolitical risk, Venezuela, is under US control for now, and that contrary to other regions, it hasn’t agreed to a global tax policy that would cripple its competitiveness. For LATAM, global chaos may well be an opportunity.

However, it seems clear that a lack of consistency, either in the form of tax policy or appropriate legal enforcement of tax law, is a challenge the region needs to address—particularly as its policies seem to suggest awareness that in 2026 natural resources alone aren’t enough to convince investors to bet on its future versus other developing regions of the global south.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Ignacio Gepp is a partner with Puente Sur in Chile.

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