Knowledge Economy Promotion Regime (Ley 27.506)

What it is: Ley 27.506 ("Régimen de Promoción de la Economía del Conocimiento") was passed in May 2019 and, after amendment by Ley 27.570, took effect with registration backdated to 1 January 2020. It is administered nationally by Argentina's Ministerio de Economía (via the Secretaría de Industria y Desarrollo Productivo) with AFIP handling registration, and covers software/SaaS, biotechnology, nanotechnology, aerospace, nuclear engineering, Industry 4.0, audiovisual production, export-oriented professional services and R&D. Registered firms get a corporate-income-tax cut (down to 60-80% of the standard rate depending on firm size) and a transferable tax credit worth 70% of employer social-security contributions (80% for firms hiring women, people with disabilities, postgraduates, or workers in disadvantaged regions), usable against other national taxes for 24 months, plus VAT and export-duty relief.

Results: registered companies grew from 582 (November 2022) to roughly 800-957 by 2024-25, over 90% of them SMEs. The Ministerio de Economía counted about 494,000 jobs in the broader knowledge-economy sector in Q4 2023 (about 7.3% of registered employment); sector exports reached US$8.9 billion in 2024 and US$9.685 billion in the year to mid-2025 (Argencon), Argentina's third-largest export complex. The narrower software subsector (CESSI) saw exports fall to US$2.445 billion in 2023 (down 6.8% year-on-year), with the sector's layoff rate doubling from 3% to 6% that year.

Why it's notable: it is a deliberate, industry-co-designed policy instrument — built on an earlier 2004 software-promotion law — explicitly aimed at preventing the country's tech talent from leaving Argentina's formal economy, using targeted, transferable payroll credits rather than blanket subsidies, with built-in extra incentives for hiring under-represented groups.

Caution: no causal or quasi-experimental evaluation isolates the law's effect from confounders such as peso devaluation, global remote-work trends or macroeconomic cycles — all published figures are descriptive statistics from government, CESSI and Argencon. Bloomberg documented an ongoing "exodus" of Argentine developers into informal, dollar-paid remote freelancing (estimated at US$1.8 billion) that undermines the very formal payrolls the law tries to protect — one firm reportedly lost 80 of 600 employees this way — and software exports fell even as the regime remained in force. Under the Milei government, public science and technology employment fell about 3.6% (Dec 2023-Sept 2024), and 2025 reporting describes continued outbound talent migration despite official "AI hub" ambitions, underlining that brain drain persists alongside the incentive regime.

Read the full analysis: https://www.argentina.gob.ar/normativa/nacional/ley-27506-324101/actualizacion