There is also uncertainty about the fate of the knowledge economy initiative, because legislative times would not be enough for approval
The national government exhibits as one of those achievements during the administration of President Mauricio Macri to emerging companies, better known by their word in English: “startups”.
The head of state already appeared in public on several occasions with representatives of the Argentine “unicorns” (Mercado Libre, Globant, Olx and Despegar) and in the middle of 2019 marked by inflation and recession, Macri bets on entrepreneurs to express the optimism to all test that proclaims the Pro from its management in the city of Buenos Aires.
In this context, on March 12 the president presented a bill on the economy of knowledge that he sent to Congress only on April 4.
About the initiative
The initiative seeks to promote all activities related to the knowledge industry (software, biotechnology, robotics, audiovisual services, export consulting services, artificial intelligence, and videogames), in replacement of the software law that is in force until the end of the year. of year.
The promotion of the activity will be through the granting of tax incentives, which aim to double the exports of the activity in the next 10 years and generate more than 200,000 jobs.
The initiative also foresees the reduction of the labor cost plus a reduction of the income tax.
To access tax benefits, companies must prove that 70% of their turnover comes from these activities promoted within the knowledge economy, in addition to allocating a percentage of the profits to research or training, and exporting at least 13 % of the generated.
The project aims to facilitate the recruitment and training of talent, promote exports and encourage innovation (R & D) and the creation of new ventures.
Scarce co-investment
Incutex is a Cordovan accelerator that, since 2012, accompanies technological start-ups in the growth stage with mentoring, support and investment, to develop them as profitable and sustainable companies with a long-term impact.
Its model of “company building” adapts the formula applied by countries with developed economies to Latin America to invest in entrepreneurial capital, guiding the projects to develop and to grow in a sustained and scalable manner.
In addition, since 2017 he has been leading open innovation programs together with companies such as Grido, Telecom, Bancor, Cadena 3, Promedón and Universidad Siglo 21.
Walter Abrigo, CEO of Incutex, explained to iProfesional that this project extends the benefits that the software industry had to other industries.
“The additional activities (software) contemplated are linked to the audiovisual industry, biotechnology, research and experimental development, the aerospace and satellite industry, artificial intelligence, nanotechnology, robotics and industrial Internet, Internet of Things, sensors, additive manufacturing , augmented and virtual reality, etc. “, he said.
Abrigo repaired a legal issue pending for the “startups”: “Currently the law of entrepreneurs contemplates co-investment programs 1 $ to 1 $, this is something that could be improved and analyzed by stages, since in developed countries the co-investment programs are more aggressive in projects in early stages “.
“For example 4 to 1 in Chile and 6 to 1 in Israel, this would increase the risk capital, necessary for the development of innovation in different industries,” he said.
Labor costs
From the Association of Entrepreneurs of Argentina (Asea) have a more critical vision. Manuel Tanoira, member of the Executive Board of the entity and its public policy spokesperson, acknowledged to iProfesional that “the incorporation of the concepts announced by the President are key for the development of the country,” and that one of the main strengths is the low tax”.
“However, they were short with those who finance these companies in the country, there is no investment culture in this type of companies, if we do not encourage and enhance it, even if the chicks are born we will not have to feed them”, he warned.
For Tanoira, “we need a more aggressive promotion of entrepreneurial capital and fundamentally that of this industry, without investment there is no growth”.
Consulted on the diagnosis of the current situation of entrepreneurship and its forecast for this year, the spokesman of Asea said that “tax pressure and labor costs are a brake on the sector.”
This law is a balm, but not enough. Our neighbors are investing more than twice as much as we do in this “, in addition to” the great difference that exists with other countries “such as the United States, Israel, Singapore, South Korea and the United Kingdom.
Uncertainty
While the initiative announced by Macri just arrived on April 4 at the Congress, the Communications and Information Commission of the Chamber of Deputies began to discuss on March 26 projects to extend the software promotion law that expires in December of this year. .
This rule should cease to apply since the tax benefits for the sector would be included in the new law.
This decoupling between the Ministry of Production and legislators generates uncertainty and fear.
The regulation of the new norm (as long as it is sanctioned in Congress in the middle of an election year) can be prolonged by the number of intervening agencies, including the AFIP.
What the Government says
In a dialogue with iProUP, the Secretary of Entrepreneurs and SMEs of the Nation, Mariano Mayer, stressed that the Executive promoted several of the laws that promote the development of startups and SMEs. And he responded to the criticisms made from the entrepreneurial arc.
With respect to the co-investment, Mayer pointed out that “there are different systems in the world” and that from the Government they were based on the experience of Israel and the United States. “Different models were evaluated and we came to the plan of the Entrepreneurs Act and the tax incentive, the truth is that we believe that a very important plan remained,” he remarked.
In addition, he stressed that the country was very bad in some variables, such as the entrepreneurial capital, globally and that Argentina was climbing steps.
He also highlighted the progress in the regulatory framework and the implementation of the seed fund, which “had more than 1,000 projects that were supported, the accelerators are making their first co-investments and there is growth in several areas, such as agtech and fintech”.
“In the co-investment funds plus the tax incentive there are already several companies registered, we have very good companies working and there are many more in the portfolio,” said Mayer, who also highlighted the state’s effort in a complicated macroeconomic context.
Finally, he stressed that the Law of Knowledge Economy is a standard for “the next 10 years of the country” and was developed after having “studied the different models of the world, taking into account other sectors of the knowledge industry”.
“Clearly, this project is superior to the Software Law, with fewer requirements to meet and some other issues” he added.
Also published on Medium.