Annual publication on the evolution of foreign direct investment liabilities in companies in the country, in force from 2004 to 2016.

These statistics were based on the information obtained in the Survey of Direct Investments in resident companies provided by Communication A4237 and complementary ones, which was replaced by the Survey of External Assets and Liabilities established by Communication A6401 based on the information for 2017.

Executive Summary

External financing flows in the form of direct investment in resident enterprises (FDI)1 totaled US$ 73,130 million at the end of 20072. Of this total, US$ 56,014 (77%) corresponded to equity participations in companies in the non-financial private sector (NFPS) and financial sector (NFPS), and US$ 17,117 million (23%) to indebtedness with their parent companies and/or foreign subsidiaries of NFPS companies receiving direct investments.

The top 10 companies receiving FDI, measured in terms of the book value of the shares of non-residents in the net worth of these companies plus NFPS indebtedness with their parent companies, represent 24% of direct investments in companies in the country, while the first 200 companies concentrated three quarters of it.

The share of FDI companies in total private external liabilities and in the value of exported goods is also noteworthy. NFPS FDI companies accounted for 65 per cent of the total NFPS external debt at the end of December 2007 and accounted for 76 per cent of Argentina’s exports of goods in 2007. This share remained relatively constant in the context of continued export growth.

The distribution of direct investment in enterprises was balanced among the three major clusters of activity. As of December 31, 2007, the manufacturing industry concentrated investments of US$ 26,256 million (36%), while the exploitation of natural resources and other primary activities had US$ 24,954 million (34%) and services US$ 21,919 million (30%) – corresponding to US$ 3,085 million in the financial sector. Within these large groups, there is a strong concentration in some particular sectors. Among the activities related to natural resources, the oil sector accounted for 75% of the sector (US$ 16,565 million) and was the main recipient of direct investment with 28% of the total.

Considering the first level of holding by external investors, almost 60% of the gross passive FDI position as of 31.12.07 corresponded to investors residing in Europe, followed by North America (20%), South America (12%) and Central America (7%). At the country of origin level, Spain (US$ 22,260 million) and the United States (US$ 12,643 million) accounted for 30% and 17%, respectively, of foreign direct investment in the country at the end of 2007.

In the three-year period 2005-2007, net capital flows from foreign direct investments in the country’s companies implied a positive balance of about US$ 20,178 million, being an important component of the country’s external financing.

Net FDI capital flows were mainly in the form of reinvestment of profits (US$ 11,837 million) and capital contributions (US$ 7,071 million). Half of them have come from three countries: Spain (28%), Brazil (12%) and the United States (11%) and the main recipient sectors were oil (US$ 4,363 million), the automotive industry (US$ 2,357 million) and base metals (US$ 2,083 million).

Direct investment firms reinvested more than half (53 per cent) of FDI capital income in the period 2005-2007. The reinvestment rate reached 58% during 2007.