Argentina’s Free Zones Were Built for Containers. Can They Handle Code?

FTZ News: For more than thirty years, Argentina’s free-trade zones have worked according to a simple logic. Goods arrive, duties are suspended, companies store or lightly process them, and then the products leave the country again. Law 24.331 was written for warehouses, assembly lines and truck routes. It was never meant for software, algorithms or remote servers.

That is why the idea now circulating in Mendoza feels slightly awkward. A local entrepreneur named Simón Puebla wants to create what he calls a digital free zone by combining the old free-zone statute with the newer Knowledge Economy Law. On paper the two regimes look complementary. One suspends import taxes and offers customs flexibility. The other already gives preferential treatment to software firms and research activities. Stack them, Puebla argues, and you get a legal space where companies can export artificial-intelligence tools or blockchain services under lighter tax conditions.

The problem is that the older law still thinks in terms of physical merchandise. Customs officers are trained to inspect containers, not lines of code. No one has clearly defined how a digital product “enters” or “leaves” a free zone when the work happens on servers that may not even sit inside the designated perimeter. Until tax authorities and the customs agency issue precise rules, the proposal sits in a gray area. Investors who like legal certainty tend to dislike gray areas.

This tension is not unique to Mendoza. Argentina has expanded the number of free zones over the years, yet the core legislation remains largely untouched. The statute still prioritizes export of tangible goods and treats domestic sales of processed items with suspicion. Meanwhile the country’s technology sector has grown into a significant exporter of services. The mismatch is becoming harder to ignore.

Puebla’s project is still only a proposal. It needs provincial support and some form of national blessing. Whether officials decide to stretch an old industrial tool to cover digital exports, or whether they prefer to leave the law alone, will say a lot about how Argentina intends to treat its knowledge economy. For now the free-zone regime remains what it has always been: a system designed for cargo, not for code./.