Invest In Paraguay

The agency responsible for foreign investment promotion (REDIEX) at the Ministry of Finance in Asuncion.

Foreign Investment Law 117/91 reiterates that foreigners have the same guarantees, rights, and obligations enjoyed by any Paraguayan investor. There are no restricted areas, no discrimination, and no limitations.

Paraguay has signed a number of bilateral and international investment protection treaties and specifically recognizes international arbitration, meaning that in cases of disputes, foreigners can seek redress in an international forum.

The most important foreign investment incentive is Law 60/90. This law grants tax incentives for investments. Investments may be in the form of capital (including loans, etc.), equipment, trademarks, technology transfers, and the like. In other words, the definition of investments is quite broad. In return for the investment, the following exemptions are granted:

• All government fees for registering companies are waived
• Total exemption from customs duties
• Total exemption from withholding tax on repayment of loans exceeding US$5 million
• Total exemption from taxes on profits and dividends for 10 years for investments exceeding US$5 million
• Incentives under Law 60/90 are generally approved within 45 days of the application.

Paraguay’s Maquila program, based on a similar program in Mexico, allows a local entity to sign a contract with a foreign entity to produce goods or provide services for export only.

The system allows for duty-free import of raw materials and a complete tax exemption with the exception of a 1% fixed tax on turnover.