Updates on the Private Participation Regime for the Financing of Scientific, Technological, and Innovation Projects | Law 6780
Administrative Law Department and Intellectual Property Law Report | Updates on the Private Participation Regime for the Financing of Scientific, Technological, and Innovation Projects – Law 6780
On January 15, 2025, the Legislature of the Autonomous City of Buenos Aires enacted Law 6780 (the “Law“), which establishes a Private Participation Regime for the Financing of Scientific, Technological, and Innovation Projects. This regulation aims to promote private investment in research and development, complementing the state budget in these areas.
1. Key Aspects of Law 6780
1.1. Creation of the Private Participation Regime
The Law establishes a regime to incentivize individuals and legal entities to finance research and development projects in the City of Buenos Aires. These projects must be related to science, technology, and innovation (as established in the regulations) and must be approved by the enforcement authority designated by the City’s Executive Power.
1.2. Promoted Activities
The Law establishes that the activities set forth in Article 3 of Law 6394 on the Promotion of the Knowledge Economy in the Autonomous City of Buenos Aires will be promoted. These include, among others: software and digital IT services; biotechnology; bioeconomy; biology; biochemistry; microbiology; bioinformatics; molecular biology; neurotechnology and genetic engineering; geoengineering and its testing and analysis; nanotechnology and nanoscience; the aerospace and satellite industry; space technologies; engineering for the nuclear industry; manufacturing, fine-tuning, maintenance, and introduction of goods and services aimed at automation solutions in production, which include feedback cycles from physical to digital processes and vice versa. These must, at all times, be exclusively characterized by the use of Industry 4.0 technologies, such as artificial intelligence, robotics, industrial internet, the Internet of Things, sensors, additive manufacturing, and augmented and virtual reality.
1.3. Beneficiaries
Individuals and legal entities, with or without profit motives, domiciled or that carry out economic activities under the Multilateral Agreement in the Autonomous City of Buenos Aires may access this regime. However, those with ties to the regime’s evaluators or who have been sanctioned for regulatory violations in the past five years are excluded.
1.4. Sponsors and Tax Benefits
Taxpayers subject to the Gross Income Tax who finance approved projects may apply their contributions as a credit against said tax, up to 50% of the project’s cost. Additional limits apply to large taxpayers. To access the benefit, the Sponsor must be up to date with their tax obligations to the Government of the Autonomous City of Buenos Aires.
1.5. Relationship Between Beneficiaries and Sponsors
The Law specifically establishes that sponsors may not claim ownership of the results obtained from research, developments, and innovations, which will remain the property of the participating beneficiaries.
Additionally, the sponsor and the beneficiary must sign a contract that clearly defines the obligations of both parties, including, but not limited to, how the sponsor’s image and/or the goods and/or services they produce will be associated with the sponsored projects.
1.6. Researcher and Project Registry
A Public Registry of Researchers and/or Research Teams is created to promote collaboration between the academic sector and the City Government. Additionally, approved projects will be published along with the identification of beneficiaries and sponsors who agree to be mentioned.
1.7. Project Prioritization
Priority will be given to projects that meet at least two of the following criteria:
-Job creation, particularly for women and vulnerable groups.
-Export of goods and/or services related to the project.
-Investment in research and development with an innovative focus.
-Improvements in the quality of services or products through recognized quality standards.
-Direct benefits to populations in vulnerable situations.
-Location in economic districts or the Innovation Park.
1.8. Allocated Budget and Updates
The regime has an annual budget of $2 billion, updated according to wage increases agreed upon in public sector collective bargaining agreements. The Executive Power may authorize an increase. Up to fifty percent (50%) of the approved project costs may be financed through this benefit.
1.9. Compatibility with Other Benefits
The benefits granted under this Law will be compatible with other existing benefits at the time of its enactment or those created in the future.
1.10. Penalties for Violations
Failure to comply with the obligations established in the Law may result in penalties such as the repayment of funds, fines equivalent to twice the amount received, and disqualification from accessing future benefits under the regime.
2.Implications for the Sector
Law 6780 provides an innovative tool to strengthen research and technology financing in the City of Buenos Aires. Its main benefits include:
-Increased private investment in R&D: Encourages project development with private sector support.
-Tax benefits for businesses: Allows the deduction of contributions in the Gross Income Tax.
-Promotion of innovation and development: Facilitates the creation of new knowledge and technologies.
-Support for vulnerable sectors: Prioritizes projects with a positive social impact.
We remain available to provide advice on the application of this new regulation and its impact on your economic activities. Please do not hesitate to contact us with any inquiries.
Best regards,