Legal Requirements for investing in Paraguay
Post available in: English
When doing business in Paraguay investors should consider various aspects of Paraguayan legislation. This document has been prepared to present an overview of Paraguayan law, addressing the areas that most frequently interest foreign investors. It does not provide an in-depth analysis of any of the laws, decrees or regulations, and thus in itself is not a sufficient basis for decision-making on investments.
Information appearing here is current as of May 2011 and show be checked for updates.
2. COMMERCIAL ENTITIES
Most business entities operating in Paraguay are organized as: (i) Corporations;
(ii) Branches of companies incorporated abroad; or
(iii) Limited liability companies.
Foreign company branches
To establish a branch, the parent company must file the following documents that must be certified by a notary public and legalized by the pertinent Paraguayan Consulate:
1) Parent company’s bylaws or incorporation papers.
2) Certification that the parent company is legally registered in the country of origin, issued by a public official or by the Chamber of Commerce.
3) A resolution by the parent company’s board of directors deciding to:
a. Establish a branch in Paraguay;
b. Allocate nominal capital to invest in Paragua
c. Establish the domicile of the branch in Paraguay;
d. Appoint the person/s who will administer the branch’s business; e. Grant the pertinent powers of attorney to administrators.
4) The powers of attorney for administration granted by the parent company to the per- son/s who will administer the company.
The documents are transcribed in the Protocol of a Notary Public for filing with the Public Registry of Commerce and the Registry of Legal Entities and Associations. No government authorization is required.
Like Paraguayan companies, branches are subject to tax laws, Civil Code provisions on filing of corporate documents, bylaws and powers of attorney with the Public Registry of Commerce and the Registry of Legal Entities and Associations, and the other requirements on preparation of financial statements, annual balance sheet, and other corporate documentation.
Foreign company representatives are authorized to engage in all transactions, acts and things which the company can perform in its own country. Any limitation of this capacity will be considered void and without legal effect.
2.2 Corporations (Sociedad Anónima or S.A.)
Corporations must be organized in a public document prepared by a Notary Public. They may be incorporated in a single act by a group of founders, or through a public offering of shares. Corporations may be either closely held or open (SAECA).
Corporations must have at least two shareholders, who may be either individuals or legal entities. They acquire legal personality upon filing with the Public Registry of Commerce and the Registry of Legal Entities and Associations.
Corporate bylaws are submitted by the Notary Public to the Treasury Counsel Office of the Ministry of Finance, which will issue approval for filing the company with public registries. Following filing, an extract of the company’s incorporation papers is to be published in a major newspaper. Any amendment of the corporate bylaws must be carried out
New Laws: IRPF sobre rentas en el exterior y levantamiento del secret bank accounts in compliance with the same formalities as established for incorporation, after holding a special meeting of shareholders.
To avoid delays in the procedure it is possible to acquire dormant off-the-shelf corpora- tions. Foreign investors frequently use such companies. The cost depends on the type, the capital and the shares. These dormant companies usually have broad corporate purposes, and their articles of incorporation and capital structures may be subsequently modified.
2.2.2 Capital. Types of shares
The capital of corporations may be represented by bearer or registered shares. Share certi- ficates must be numbered and be signed by one or several directors, and are issued when paid in full. The bylaws may create different types of shares having different rights.
There is no minimum for capital.
2.2. Restrictions on foreign ownership and control
There are no restrictions on the citizenship or domicile of the shareholders of corporatio- ns, save the exception provided in law 2532/05 that stipulates that legal entities comprised mostly by foreigners from any of Paraguay’s bordering countries cannot be owners, co- owners or beneficial owners of rural property located at the border security zone.
Administration of companies will rest with one or more directors appointed by the an- nual Regular Shareholders Meeting. Their number and term of office are established in the bylaws. Directors can be shareholders or not. They can be reelected and their appointment can be revoked.
Directors must be Paraguayan or foreigners legally residing in Paraguay.
Directors are not liable for the corporation’s obligations except in the case of non performance or improper performance of their duties, or of violation of the law or of the bylaws and any other damage caused by abuse of authority or gross negligence.
Investing in Paraguay
2.2.5 Corporate control
The company must have one or more controllers, members and alternates, appointed by the annual Shareholders Meeting to control administration of the corporation.
They must be domiciled in Paraguay but may be Paraguayan or foreigners legally residing in Paraguay. Controllers may perform their duties for up to a maximum of three years and they can be reelected.
Shareholders meetings may be regular or special and must be held at the corporate hea- dquarters.
Regular shareholders meetings must be called each year by the directors or by the contro- ller to take up and decide on the following:
- a) Annual report by the directors, balance sheet and income statement, distribu- tion of dividends, controller’s report and all other measures regarding corpo- rate management on which it is competent to decide, pursuant to law and the bylaws, or submitted to its decision by the board and the controllers;
- b) Electionofdirectorsandcontrollersandsettingtheircompensation;
- c) Responsibilities of directors and controllers, and removal thereof; and
- d) Issuanceofshares.
The shareholders meeting must be called within the first four months following the end of the civil year to take up points a) and b). Closing of the social and fiscal year coincides with the calendar year, therefore it is on 31 December every year. For sugar engineers and cooperatives producing agricultural products, social and fiscal year must close on 30 April every year.
Special shareholders meetings may be called by the directors at any time, or by the con- troller when s/he considers it appropriate, or at the request of shareholders representing five percent (5%) of the capital stock (unless the bylaws provide otherwise) to take up the following:
a) Amendment of the bylaws;
b) Capital increase or reduction;
c) Redemption, reimbursement or amortization of shares;
- d) Merger,transformationordissolutionofthecompanyandallmattersrelated to liquidation and liquidators;
- e) Issuance of debentures or exchange thereof for shares;
- f) Issuance of participation bonds.
Special shareholders meeting on first notice require the presence of shareholders represen- ting sixty percent (60%) of shares entitled to vote.
On second notice the quorum is thirty percent (30%). The bylaws may establish different quorums.
Five percent (5%) of net earnings must be allocated each year to a reserve until reaching twenty percent (20%) of subscribed capital. Dividends can only be paid to shareholders from the company’s net earnings. Violation of this rule implies joint and several liability of the directors.
2. Limited Liability Companies (SRL)
Most of these companies are used for commercial operations of small companies. They can adopt any name, including that of one or more of the members. SRLs cannot include financial or insurance activities in their purpose.
An SRL can be organized by a minimum of two and a maximum of 25 persons. The operating agreement is formalized in a public instrument by a notary public. Upon com- pliance with the conditions established by law for organizing an SRL, the respective do- cumentation must be submitted to the Treasury Counsel Office of the Ministry of Finan- ce, which will issue approval for filing with public registries. Following filing, an extract of the company’s organization papers are to be published in a major newspaper.
2.3.2 Capital Stock
SRLs do not have shares. Membership capital is divided into registered units having a minimum value of Gs.1,000 (USD 0.25) each or multiples of that amount, as indicated in the operating agreement.
Money contributions must represent at least 50% at the moment of constitution and be completed within 2 years. In-kind contributions must represent 100% at the moment of constitution.
There is no minimum capital requirement but capital must be sufficient to fulfill the pur- pose proposed by the SRL. Companies engaged in export or import activities must meet certain additional requirements set by the Central Bank of Paraguay.
If an SRL has over five members, transfer of units to third parties must be approved by members representing three-fourths of the capital. If the number of members is lower than five, approval must be by unanimous decision. There is no limitation on transfer of units among members.
The management and representation of an SRL may be delegated to one or more mana- gers, who may be members or not, and who shall have the same rights and obligations as the directors of corporations. There are no limitations for their mandates.
2.3.4 Reserve Fund
Five percent of the net profits must be allocated to a reserve fund each fiscal year until reaching 20% of the SRL capital.
In July 2004 the Executive branch enacted Law 2421 for Administrative Reorganization and Tax Reform (the “Law”), introducing tax reforms regarding the following taxes: In- come Tax on Commercial, Industrial and Service Activities, Farm Income Tax, Small Taxpayers Income Tax, Value Added Tax, Selective Excise Tax and Real Estate Tax.
Said amendments are currently in force. Upon effectiveness of the abovementioned law, all general and special laws providing tax benefits were derogated.
Regarding Personal Income Tax (IRP), even though the same went into effect in 2005, its effectiveness was suspended several times. IRP’s effectiveness is currently suspended until January 2013. Initially this taxi s applicable to all those who have income exceeding 10 minimum monthly salaries or 120 minimum salaries a year, equivalent to approximately USD 39,000.
3.2. Income Tax on Commercial, Indus- trial and Service activities.
3.3. Personal Services Income Tax – Suspended
3.4. Farm Income Tax
3.5 Small Taxpayers Income Tax
3.6. Value-added tax (VAT)
3.7. Selective Excise Tax
TAX ON CAPITAL
3.8. Real Estate Tax
3.2 Income tax on commercial, industrial and services activities (IRACIS)
IRACIS is levied on Paraguayan-source income from commercial, industrial or service activities that are not of a personal nature.
Income from activities carried out in Paraguay, property located in Paraguay or any rights used economically in Paraguay regardless of nationality, domicile or residence of the par- ties involved or the place where the transactions are carried out is considered Paraguayan source income. Income from foreign sources earned or received by a local taxpayer is not subject to this tax.
2. Income tax payers include:
a) Companies with or without legal personality.
c) Government corporations, independent government entities, decentralized entities and mixed public-private ventures.
- d) Sole proprietorships(production units pertaining to anindividual).
- e) Persons domiciled or companies organized abroad and their branches, agen- cies or establishments when they perform taxable activities in Paraguay. The headquarters must pay tax on net income paid or credited by their branches or agencies.
Taxes are calculated by applying a 10% rate on the Taxable Net Income for the fiscal year, and distribution of earnings of local or foreign shareholders is taxed at a rate of 5% on net income credited or paid. The 15% tax imposed on the remittance of dividends abroad has not been changed.
Net income is computed as follows:
Total income – Total costs – Total expenses necessary to obtain taxed income and main- tain the source.
If at the end of the fiscal year, taxpayers obtained profits, the same must make four advan- ce tax payments in May, July, September and November of each fiscal year. Each advance payment is equivalent to 25% of the tax paid in the previous fiscal year.
Even if no profits are obtained in any fiscal year, taxpayers must submit their sworn Tax Return, attaching Financial Statements and Assets Adjustment and Depreciation Chart.
3.2.3 Deductible and non-deductible expenses for Income Tax purposes
The following items are deductible for Income Tax purposes:
• As a general rule, expenses required to obtain and preserve the originating source may be deducted for the purposes of determining taxable net income, provided they reflect a real expenditure, are duly documented and at market prices.
Beyond the general rule, the following deductions are expressly permitted:
• Taxes and social security contributions on the activities or the properties and rights used to produce income except for the Income Tax;
• General business expenses;
- Compensation and fees paid to Personal Services Income Tax payers.
- Compensation to personnel provided they make the corresponding contributions set forth in the Law. A deduction is allowed for compensation paid to managers, owners, and partners for which no contribution is required up to certain limits.
- Organization and incorporation expenses.
- Expenses for interest, rents or assignment of use of rights or properties provided theyconstitute taxable income for the creditor.
- Losses due to accidents not covered by any insurance or indemnity.
- Provisions or penalties on bad debts under certain conditions.
- Losses due to any crime by third parties insofar as not covered by any insurance or indemnity.
- Depreciation due to wear and tear, obsolescence and exhaustion.
- Amortization of intangible assets such as trademarks and patents.
- Expenses and expenditures abroad necessary to obtain taxed income from import and export operations, under certain conditions.
- Transfer expenses, per diems, etc., in money or in kind, subject to rendering of ac- counts, provided the same are duly backed up by legal documentation.
- Donations to the state, municipalities, religious denominations and social, educatio- nal and cultural assistance and charity institutions recognized by the Tax Authority up to certain limits.
- Percentage remunerations paid from liquid profits by personal services.
- Expenses and contributions for health care, school, cultural and training personnel provided that the institution rendering the service pays this tax or that such income is taxable upon computation of the employee’s Personal Income Tax.The following items are not deductible for Income Tax purposes:
• Interest on loans given by partners or shareholders paid to people who do not pay Income Tax on Commercial, Industrial and Service Activities exceeding the limits set by the Administration.
• Penalties due to any tax violation.
- Profits for the fiscal year allocated to capital increases or reserves, except for mathe- matic reserves and similar established by law and regulations for insurance com- panies, and reserves aimed to maintain the minimum capital from exchange rate differences.
- Amortization of goodwill paid.
- Personal expenses of owners, partners or shareholders and any amounts withdrawn on account of profits.
- Direct expenses to obtain untaxed income or income exempted of said tax.
- Value Added Tax (VAT), except when the same is directly or indirectly allocated by transactions not taxed by said tax, except for exports.3.2.4 Treatment of local source income produced by foreign companiesIncome from local sources produced by foreign companies is subject to Income Tax. The headquarters must pay tax on net income paid or credited by their branches or agencies.The following is considered as Paraguayan-source income of persons or entities from abroad with or without a branch, agency or establishment in Paraguay:
- Ten percent on the amount of premiums and other revenues covering risks in Para- guay either exclusively or not, or properties located or persons residing in Paraguay at the time of entering into the contract. Such percentage will also be applicable to gross amount from transportation fares, radiograms, phone calls, audio and video transmission services, sending and receiving of data via Internet, and other similar services rendered from to and from any country abroad, and international freight gross amounts.
- Fifteen percent on gross revenues from international news agencies, and on gross revenues from assignment of use of containers.
- Forty percent on gross revenues from companies distributing motion pictures for television, magnetic tapes and any other similar means of projection.
- Fifty percent of gross amounts paid, credited or remitted in any other category than the foregoing.Taxpayers residing in Paraguay may choose whether to determine income from certain activities mentioned above by applying the general tax system instead of the regimen indicated.
3.2.5 Treatment of interest on loans from abroad and royalty payments
Foreign persons or entities having a branch, agency or establishment in Paraguay ma- king loans or placements that accrue interest or remittances by same must pay Income Tax. One hundred percent of their revenues is considered net Paraguayan-source income (effective rate is 30%).
If they do not have branches, agencies or establishments in Paraguay the net income will be considered to be 50% of revenue (effective rate is 15%). The Paraguayan entity paying the interest and/or royalties will be the withholding agent for VAT at a rate of 5% for interest and 10% for royalties.
Financial or banking entities that are widely known both in the financial market and by multilateral loan agencies located abroad compute net Paraguayan-source income as 20% of interest and commissions remitted (effective rate is 6%). The Paraguayan entity paying the interest will be the withholding agent for VAT at a rate of 5%.
2. Technical assistance from abroad and temporary services rendered by employees of foreign companies with no branch, agency or establishment
Technical assistance or services provided by employees of foreign companies will be con- sidered rendered in Paraguay (and hence subject to Income Tax via withholding) when their use or benefit is in Paraguay. Such services are also subject to 10% VAT and the Paraguayan person/entity acts as withholding agent.
3.2.7 Real estate rentals
Income tax is levied on real estate rentals provided the lessor owns more than one piece of property. Any unit or apartment forming part of a building as a condominium will be considered independent properties.
3.2.8 Notional and presumed income
The Tax Authority is empowered to establish income on a notional basis for taxpayers with no accounting records or where due to their nature it is difficult to adjust the ac- counting to generally accepted standards.
At present there is a system for presumed income for sole proprietorships working in construction, fuel transport, construction companies, companies supervising public wor- ks, and real estate rentals.
3.2.9 Terms for depreciating fixed assets
The Tax Authority establishes useful life of the property by means of regulations as follows:
Personal property, assets and goods:
- Furniture and equipment: 10 years.
- Assets and goods such as crockery, bed clothes and similar: 4 years Machinery, Tools and Equipment:
- Machinery: 10 years.
- Tools and equipment: 5 years.
- Computer equipment: 4 years. Ground transportation:
- Cars, vans, trucks, trailers and similar: 5 years.
- Motorcycles, motorbikes, tricycles and bicycles: 5 years
- Other assets: 10 years Air transportation:
- Airplanes, light aircrafts and flying equipment: 5 years.
- Ground installations and other assets: 10 years. Sea and maritime transportation:
- Vessels in general: 20 years
- Canoes, boats and other assets: 5 years
- Train engine, wagons, dual carriageway, crafts and rolling stock of any kind: 20 years.
- Construction of railways and other assets: 10 years.Real state:
- Construction or improvement of urban real estate, excluding the land: 40 years.
- Construction or improvement of rural real estate, excluding the land: 25 years.
- Construction or improvement in own land made by third parties, when the invest- ment is included as part of the owner’s benefit with no indemnity: 10 years.Other assets: 5 years.Intangible assets:
• Paid intangible assets such as trademarks, patents and similar, except for good- will, shall be depreciated applying a percentage of 25% (twenty-five percent) a year.
3.2.10 Terms for offsetting losses
It is not possible to deduct previous years’ tax losses.
3.3 Personal Services Income Tax (IRP)
IRP’s effectiveness is currently suspended until January 2013.
Taxpayers include individuals and simple associations. Simple associations are those not having the features of any other entities regulated by the Paraguayan Civil Code or special laws, and whose purpose does not involve a commercial or agricultural activity.
3.3.2 Taxable Income:
- a) Income from personal services, rendered in a dependency relation or indepen- dently, provided that the activity takes place within the national territory.
- b) Incomefrompersonallaborsuchassalariesorotherremunerationspaidby the State, Decentralized entities, autonomous or independent entities, Muni- cipalities, Government, Binational entities and semi-public companies.
- c) 50% of dividends and profits from companies established or domiciled in the country, regardless of the place their activities are carried out.
- d) Income from occasional sale of real estate properties in general, when the same are located in Paraguay.
- e) Income coming from sale of securities, shares or equity shares, corresponding to companies organized or domiciled in the country, even though the sale is carried out abroad.
- f) All income generated by capital investment, granted or paid by companies or corporations organized or domiciled in the country, provided that the same is not taxed by the Tax on Commercial, Industrial and Service Activities, or by Farm Income Tax, or by Small Taxpayers Income Tax.
Tax rates are 8% or 10%, depending on income level.
3.3.4 Deductible expenses:
- a) Contributions to Social Security or to Pension and Retirement funds created or permitted by law.
- b) Donationstonationalgovernmentormunicipalities,religiousentitiesrecog- nized by competent authorities, as well as social assistance, educational, cul- tural, or charitable legal entities recognized by the Administration as an entity for the public good, with the limitations established by the Tax Administra- tion.
- c) Expenses abroad, insofar as directly related to generating taxable income, per the terms and conditions established by regulations. Indirect expenses are de- ductible proportionally, as established in regulations.
- d) Inthecaseofindividuals,allexpensesandinvestmentsdirectlyrelatedtothe taxed activity, provided they reflect a real expenditure, are duly documented and at market prices. Also deductible are all personal and family expenses and investments incurred by the taxpayer and geared to maintenance, education, health, clothing and entertainment of self and dependents, provided that the expenditure is supported by documentation legally issued per current tax pro- visions.
- e) For persons who are not mandatory social security contributors, up to 15% (fifteen percent) of gross income for each fiscal year placed either in savings deposits with Banking or Financial Entities regulated by Law No. 861/96; with Cooperatives engaged in Savings and Loan activities; in investments in registered shares of publicly traded Paraguayan companies; and in Paraguayan private retirement funds having at least 500 active contributors.
- f) In the case of simple associations, all expenses and investments related to ob- taining taxed income and maintaining its source, provided that same are real expenditures and are duly documented. Indirect expenses are deductible pro- portionally, as established in regulations.
- The following are not deductible:
- a) Current Income Tax.
- b) Penaltiesduetoanytaxviolation.
- c) Expenses directly related to activities not taxed, exempt or exonerated from this tax. Indirect expenses shall not be deductible in the same proportion re- garding non-taxed or exempted income.
- d) Giftsordonations.
Fiscal Loss Compensation
Loss generated by investments paid may be deducted from net income in the next 5 fiscal years after the year in which the loss was generated.
The Tax Administration may establish tax advance payments.
4 Farm Income Tax (IMAGRO)
Farm Income Tax is levied on agricultural and livestock activities carried out in Paraguay. Agricultural and livestock activities are those carried out in order to obtain raw plant or animal products, by using the land for cattle breeding or fattening, wool, leather or bristle production, fruit and vegetable production, milk production, etc.
This includes tenancy, possession, usufruct, leasing or ownership of rural real estate even if no activities are carried out in the same.
The tax is computed based on the area of land useful for farm activities, with certain differences for large and medium-sized properties.
Individuals operating properties not exceeding 20 hectares in area in the Eastern Region and 100 hectares in the Western Region are exempt from payment of this tax.
4. This Tax applies to the following:
- Companies with or without legal personality;
- Associations, corporations and any other private entities of any nature whatsoever;
- Government corporations, independent government entities, decentralized entities and mixed public-private ventures.
- Persons domiciles or entities domiciled or organized abroad and their branches, agencies and establishments in the country.4.2 Large properties:This includes rural real estate which individually or jointly exceed 300 hectares in area in the Eastern Region and 1,500 hectares in the Western Region.Net income equals gross income minus the expenses related to the activity, coming from expenses and investments connected to obtaining the taxed income and maintaining the producing source, provided the same are real and are duly documented. Beyond this general criterion, the law permits deduction of:
- a) 8% for depreciation of the value of female cattle used in stock rising.
- b) Losses from death of cattle up to a maximum of 3%.
- c) Depreciation of machinery, improvements and facilities according to the probable years of useful life of the asset.
- d) In the case of individuals, all expenses and investments directly related to the taxed activity, including capitalization in cooperative corporations and all personal and fa- mily expenses and investments, provided the taxpayer does not pay any other tax in which these expenses have been taken into account for deduction.
- e) Direct cost incurred in by the taxpayer supporting natural persons with medium- sized and small real estate, which they exploit as owners of adjacent or near lots up to 20% of the gross income, provided such costs are certified by the Ministry of Livestock and Agriculture or by the Secretariat of Agriculture of the corresponding Government.
- f) Personal remuneration for which no contributions are made to the Social Security Institute, in case the same are exempted or are not applicable, under the restrictions established by the Tax Administration.
- g) VAT on purchases, provided they meet the requirements established by the Tax Ad- ministration.
The tax rate is 10%.
.4. Medium-sized properties:
This includes real estate which individually or jointly exceed 300 hectares in area in the Eastern Region and 1,500 hectares in the Western Region, the taxable annual income shall be determined by applying in all cases and with no exceptions the production gross value of the usable surface of rural real estate owned by the taxpayer, which shall be de- termined based on the Soil Natural Production Coefficient (COPNAS) and the yield of products listed below, multiplied by the average price of said products in the previous agricultural year, according to the following zones:
Zone 1 or Grain Zone (COPNAS from 0,55 to 1,00): 1,500 kg of soybeans per hectare.
Zone 3 or high-yield Grain Zone (COPNAS from 0,20 to 0,30): 50 hg of liveweight earnings.
Zone 4 or Grain Zone (COPNAS from 0,01 to 0,19): 25 kg of liveweight earnings.
The tax rate is 2.5%.
VAT included on the purchase of goods and services that are inputs for production acti- vities (inputs, machinery, etc.) constitutes a tax credit for medium properties.
In order to determine the usable surface the following surfaces of the total hectares of the real estate shall be deducted:
- a) Surfaces with natural woodlands or grown woodlands, permanent or semi-perma- nent lagoons and wetlands.
- b) Areas which are not suitable to be used, such as rocky outcrops, tidelands, saltpans, etc.
- c) Wildlife areas protected in a private domain.
- d) Surfaceswithroutes,lanesand/orrightsofway.
- e) Areas used for environmental services, declared as such by the competent au- thority.
The corresponding notarial certificate on the total surface and the usable surface must be submitted before the Tax Administration office for its deduction.
IMAGRO taxpayers on a notional basis, may opt to pay income tax based on the regime established for large real estate or general balance and result chart, provided they report such decision at least two months before the new year begins. Once the latter choice has been made, tax cannot be computed on a notional basis for a period of three years.
This tax taxpayers will carry out their advance payments in due time and manner, as established by the Tax Administration Office.
Small Taxpayer Income (RPC)
It is levied on all revenues from commercial, industrial or services activities that are not of a personal nature.
Taxpayers include sole proprietors with gross income for the previous fiscal year (January to December) of up to USD 24,000 (approximate amount, updated annually per va- riation of the Consumer Price Index provided by Central Bank of Paraguay). This also includes forest farmers with areas not exceeding 30 hectares, in connection with jogging and sale of roundwood and firewood.
Imports and exports activities are excluded.
The tax rate is 10% on computed net income.
Net income shall be determined in all cases based on real or notional values and the lower value shall be considered. The actual net income is the positive difference between total revenues and expenses, duly documented, and the notional net income is 30% of gross annual billing.
Small taxpayers may opt to pay the tax in any year based on the general balance and result chart, provided they report said decision at least two months before the new year begins. Once this choice has been made, the taxpayer cannot return to the system established for small taxpayers.
3.6 Value-added tax (VAT)
VAT taxes the following items:
a) Sale of goods, including:
- – Allocation to personal consumption or use of the assets of the company by the owner, partners, directors and employees of the same.
- – Locations with option to purchase.
- – Companies transfers; assignment of quotas and company’s shares with or without legal personality if not reported to the Tax Administration Office, ad- judication to the owner, partners and shareholders carried out due to closing, total or partial dissolution and final liquidations.
- – Arbitration agreement with transfer of ownership.
Goods granted on consignment.
a dependency relation. This includes:
- – Loans and financing.
- – Work services with or without delivery of materials.
- – Insurance.
- – Intermediations in general.
- – Assignment of use of assets such as furniture, real estate or intangible assets.
- – Profession, arts or other services.
- – Goods and people transportation.
- – Personal utilization of the services provided by the company by the owner, partners and directors of the same.
c) Imports of goods to the country.
3.6.1 Value-Added Tax payers include:
- Individuals on university professional services, individuals on personal servi- ces.
- Sole proprietorships on commercial and industrial activities and service provi- sion.
- Companies, with or without legal personality, and private entities in general
- Social assistance entities, charity and beneficence institutions, entities of scientific, literary and artistic education, unions, sports centers, as well as mutual associations, federations, foundations, corporations and other ins- titutions with or without legal personality, regarding the activities carried out usually, permanently and in a commercial manner, in the production, industrial or services sector.
- Autonomous entities, government corporations that engage in commercial, industrial or service activities.
- Importers of goods to Paraguay.3.6.2 ComputationThis tax is calculated based on total VAT invoiced (fiscal debit VAT), deducting the VAT on any purchase of goods or services as well as the tax paid when importing goods (fiscal credit VAT). Fiscal credit VAT deduction is subject to the fact that the same comes from assets or services which are directly or indirectly allocated to operations levied by the tax.VAT rates:
- 5% on contracts for assignment of use of goods and sale of real property.
- 5% on sale of rice, noodles, yerba mate, edible oils, milk, eggs, uncooked meats, flour, and iodized salt.
- 5% on interest, commissions and surcharges on loans and financing
- 5% on the sale of pharmaceutical products
- 10% for other transactions.3.6.3 Exemptions:The following transactions are VAT-exempt:Sale of goods:
- Farm products in natural state.
- Hunting and fishing animals, live or dead, in natural state or unprocessed.
- Foreign currency and private and government securities.
- Estates in favor of universal or specific heirs, excluding assignees.
- Credit assignment.
- Magazines of academic, cultural and scientific interest, books and newspa- pers.
- Capital goods produced by domestic manufacturers, applied directly in the industrial or farm productive cycles by investors included under Law 60/90.Provision of services:
- Interest on government and private securities.
- Deposits with banking and financial institutions under Law No. 861/96, as well as with Cooperatives, Savings and Loans System for Housing, and state- owned financial entities.
- Services rendered by permanent or contract employees of embassies, consula- tes or international organizations accredited to the Government of Paraguay.Imports of:
- Items whose conveyance is tax exempt under the law.
- Travelers’ luggage.
- Goods entered to the country by members of the Diplomatic and Consular Corps, and International Organizations, credited before the national govern- ment according to in force laws.
- Capital goods applied directly in the industrial or farm productive cycles by investors included under Law 60/90.The following entities:
- Non-profit entities with legal personality.
- Religious entities recognized by the competent authorities by the acts exclusi- vely related to religious cult and service.
• Educational entities for profit recognized by the Ministry of Education and Culture or by the Paraguayan Legislation.
Exports include goods and international freight service for the transportation of such goods abroad.
The Tax Administration office will return fiscal credit VAT of the exporter and similar included on purchases of goods and services that are applied to the exported goods. Any credit for fiscal credit VAT in favor of exporters may be reimbursed by a credit certificate or offset against other taxes that exporters must pay.
Fiscal credit limit:
Taxpayers applying a rate lower than 10% may use 100% of the fiscal credit up to an amount using up the corresponding fiscal debit. The fiscal credit surplus, produced at the end of the fiscal year for income tax, may not be used in subsequent liquidations, and its reimbursement may not be requested, representing a cost for the taxpayer. Such surplus will not be returned either in case of closing or termination of the taxpayer activity.
3.7 Selective Excise Tax
The Excise Tax is levied on imports and the first conveyance of certain Paraguayan pro- ducts. Neither exports nor subsequent sales are subject to this tax. The rates vary depen- ding on the article and are established by the Executive within the ceilings set by the law.
Taxable goods and applicable rates are:
Manufacturers selling products in the national territory and importers of goods are tax- payers.
3.8 Real Estate Tax
This tax is applied on any real estate in Paraguay. Owners or usufructuaries – and any co- owners in case of shared properties – are taxpayers. This tax is managed and collected by the Municipalities.
3.8.1 Exempt Real Estate
- Government and municipal real properties.
- Properties owned by religious entities recognized by competent authorities, permanently used in service of the population.
- Properties declared to be national historical monuments, those owned by re- cognized public service associations, or establishments used to provide hospi- tal or social assistance services.
• Properties owned by foreign governments.
Natural pearls and precious stones in general
Watches with precious metal case or plating
Air conditioning equipment
Arms and munitions
Musical instruments, toys, games and entertainment articles
- Properties used as offices of political parties and other institutions engaged in education, culture, sports or union activities, either as owners or beneficial owners.
- Properties owned by Chaco War veterans, provided they are inhabited by same or by surviving spouse.
- Properties held by the Rural Welfare Institute and those under IBR settlement programs.
- National parks and ecological reserve areas.In the case of natural calamities, such as floods, a 50% reduction of the tax may be sought.3.8.2 Rate and ComputationTe taxable amount is the value of the real property established by the National Land Re- gistration Service. This value must be adjusted annually on a gradual basis until reaching the real market value within a period not exceeding five years. Once this value is reached, the tax basis will be adjusted annually by a percentage not exceeding 15%. On rural real properties improvements or constructions are not part of the tax basis.The tax rate is 1%, which is reduced to 0.5% for rural real properties with an area of less than 5 hectares devoted to farm operations.4. EXCHANGE REGULATIONS 4. Free Exchange MarketEstablishment and operation of Foreign Exchange Agencies and Exchange Brokers re- quires express authorization by Central Bank of Paraguay.
The entities operating in the foreign exchange system must be organized as registered- share corporations. They can also be organized as publicly traded corporations known as “Sociedades Anónimas Emisoras de Capital Abierto” (SAECA).
Foreign exchange system entities may provide services as correspondents for foreign com- panies for payments in foreign currency deriving from fund transfers from abroad.
The existing foreign exchange system is free. There are no restrictions as to the currency market. There is no withholding related to exchange rates. Imports and exports payment may be carried out in any currency maintained locally or abroad. Local deposits may be carried out in any currency depending on the deposit Bank. In practice, deposits are mostly carried out in Guaraníes and in American Dollars.
4.2 Liabilities in Foreign Currency
There are no legal obstacles to the execution of commercial or financial agreements in foreign currency. Legal performance of contracts can be carried out in local currency or in the foreign currency depending on the currency originally agreed to by the parties to the contract.
Paraguay has one of the broadest laws on foreign investment. The Investment Law pas- sed at the end of 1991 under No. 117/91 guarantees a free exchange regimen without restrictions on inflow and outflow of capital, as well as freedom for remittance abroad of dividends, interest, commissions, and royalties for technology transfer and other items, which, however, are subject to the taxes established by law. Paraguay allows free contrac- ting of investment insurance in the country or abroad, and the establishment of joint ventures.
The purpose of Law 60/90 is to promote investment and reinvestment of capital by granting special tax benefits. To obtain these advantages the foreign investor must submit its investment project to the Ministry of Industry and Commerce and the Ministry of Finance. The benefits granted are irrevocable provided investors comply with the obliga- tions established by the Law.
Investment projects under this regimen are exempt from certain taxes on the investment for a period of up to 5 years, under certain conditions.
There are no restricted sectors, discriminatory treatment or limitations. The foreign in- vestor does not require any government authorization different from local investors to make investments.
Profits and dividends are tax-free for 10 years if the investment falls under Law 60/90 and the project involves over USD 5,000,000.
Investments can be made in:
- money, supplier credits or financing;
- capital goods, machinery, industrial installations, office equipment, electrical and electronic equipment, transportation equipment, etc.;
- manufacturer’s trademarks and other forms of technology transfer;
- lease of capital goods, particularly of interest for the operation of river way and air transportation.The tax incentives granted are as follows:
- exemption from national and municipal taxes on organization, filing and re- gistration of companies;
- total exemption from customs duties on imports of capital goods;
- exemption from taxes on remittances of dividends and profits provided the amount of the investment is at least USD 5,000,000;
- Exemption from taxes on remittances and payments abroad on interests, commissions and capital, of loans for at least USD 5,000,000 coming from banking entities and other well-known credit entities abroad.. Maquila RegimenThe Maquila Regimen is implemented in law No. 1064/97 on the Export Maquila In- dustry and Decree No. 9585/00 on the Maquila Regimen in Paraguay.Using a “Maquila Contract” a company domiciled abroad hires the services of a com- pany domiciled in Paraguay to perform total or partial industrial processes or provision of services for the transformation, repair or assembly of merchandise of foreign origin.The target of export maquiladoras is the international market. Nevertheless they can allo- cate a small portion of their production to the local market without forfeiting their tax exemptions.
2 Tax Incentives
Maquila operations are exempt for all taxes and assessments on the process from impor- tation of raw materials and inputs, manufacturing of products, through exportation of same, including VAT. They pay instead a single tax at a 1% rate on the value added in national territory.
. Legal form of Maquiladora Companies
Maquiladoras companies can operate under any of the forms provided by national legis- lation and may be established by local or foreign individuals or legal entities domiciled in the country.
The most commonly used legal forms are:
- Corporation (Sociedad Anónima or SA);
- Limited liability company (Sociedad de Responsabilidad Limitada or SRL);
- Branches of foreign companies.There are no restrictions regarding capital share. The same may be 100% national, foreign or joint venture. FOREIGN TRADEGeneral RegimenThere are no restrictions on importation of goods to Paraguay.The importation of used capital goods is likewise not limited, except in the case of auto- mobiles, trucks and motorcycles, which are limited to vehicles up to 10 years old. Im- ported goods, with the exception of capital goods, information technology and telecom- munications, sugar sector and automotive sector products, and those appearing on a list of some 100 products subject to exceptional regimens, are taxed by the MERCOSUR Common External Tariff.
2 Temporary Admission of Inputs
To enjoy the benefits of temporary admission the interested party must have the appro- val of the National Customs Service for its production, exportation and reexportation program. The authorization remains in effect for one year as of the date of the resolution approving the said program, extendible for a like period, if necessary. Extensions must be requested ten (10) days prior to expiration.
In special cases Customs authorities have the power to authorize nationalization of mer- chandise deriving from the transformation, elaboration and processing of raw materials and inputs admitted on a temporary basis, in which case the applicable taxes shall be those in effect at the date of Customs clearance for temporary admission.
Temporary Admission of Capital Goods
Merchandise to be reexported in the same condition in which it was temporarily ad- mitted has a term of up to twelve (12) months to be reexported, extendible on a single occasion.
For the merchandise to be transformed, processed or repaired the term will be set accor- ding to the production or repair program.
Interested parties must provide sufficient guarantee to the satisfaction of the National Customs Service for the amount of any taxes that could be applicable, in order to ensure fulfillment of the obligations imposed by that regimen. The guarantee is cancelled once the merchandise that entered temporarily leaves the country.
Paraguay’s current Customs Code was enacted on July 5, 2004.
In general terms, the code provides for technical regulation of international customs regi- mes in connection with MERCOSUR, reflecting a trend toward adjustment of customs administration to international rules.
It likewise seeks to improve the rules for the legal relationship between the Government and foreign trade operators, stepping up oversight of customs obligations.
FREE TRADE ZONES
Free Trade Zones are regulated by Law No. 523 of 1995, by Decree No. 15.554 of 1996. They are duly enclosed and isolated areas within national territory that enjoy the tax exemptions and other benefits specified by the law, for the purpose of engaging in all types of industrial, commercial and services activities.
LABOR AND SOCIAL SECURITY ISSUES . Minimum wages
The minimum wage for the private sector is set by the Executive Branch. Nevertheless, in some business sectors (financial activity, construction, private health) wages are determi- ned by collective bargaining between unions and business associations. In other sectors wages are negotiated directly between the company and each of its employees.
Exceptions to application of the Labor Code
The current Labor Code is not applicable to Directors, Managers, Administrators and other executives of companies, provided that in such cases evidence exists of their re- presentation, amount of remuneration, nature of job, technical capacity, and especially independence in the job not implying subordination.
Regular work hours.
The normal working day has 8 (eight) hours, with a maximum of 48 hours a week for daytime work, and 7 (seven) hours a day and 42 (forty-two) hours a week for nighttime work. Mixed working days are those that include periods of time during daytime and nighttime hours. The maximum in such cases is 7.5 (seven and a half ) hours and 45 (for- ty-five) hours a week. Overtime is paid with a 50% surcharge on working days and a 100% surcharge on holidays and days off.
The maximum daytime workday for persons over 16 (sixteen) years of age and under 18 years of age is 6 (six) hours a day and 36 (thirty-six) hours a week.
All workers have the right to a period of paid vacation after each year of continuous work at the service of the same employer. Duration of vacation is as follows:
- a) For workers with up to 5 years of service: 12 consecutive business days;
- b) For workers with more than 5 and up to 10 years of service: 18 consecutive business days;
- c) For workers with more than 10 years of service: 30 consecutive business days.
In the event of contract termination without having made use of the vacation days gene- rated, compensation in money is to be provided for same based on current salary.
Vacation cannot be accumulated. Nevertheless, at the worker’s request it can be accumu- lated for two (2) years if it is not detrimental to the interests of the company.
Mandatory annual bonus.
The Labor Code requires a payment in the way of supplementary annual remu- neration (“aguinaldo”) equivalent to one-twelfth of the remuneration collected by the employee during the calendar year for all items (salary, overtime, commissio- ns, other income), which is to be paid before December 31, or upon termination of the employment relationship if earlier.
The Labor Code establishes that all workers are entitled to collect a supplement equiva- lent to 5% of the minimum wage (approximately US$ 20) for each marital, nonmarital or adopted child, up to 18 years of age. This legislation does not apply when the salary received by the workers exceeds 200% of the minimum legal wage.
Termination of Employment
Termination can be at the employee’s or the employer’s initiative, indifferently, both of whom may terminate the relationship with or without cause pursuant to the provisions of the Labor Code.
In the case of unjustified dismissal the employer must provide indemnity equal to fifteen days’ wages for each year of service or fraction of six months, in addition to an amount that varies according to the employee’s years of service from 30 to 90 days’ wages in lieu of advance notice, if such notice was not given prior to dismissal.
When the worker leaves voluntarily (resignation) the employer must pay the salary until the last day of work, the proportional amount of the obligatory bonus, and the time corresponding to vacation days generated and untaken.
Legislation establishes that the workers that reach ten (10) years of service with the same employer, acquire a degree of stability in the position, and their contract may only be terminated in the following scenarios: (i) dismissal for fair reasons demonstrated in a trial, (ii) retirement or (iii) termination agreement.
Foreign citizens may work in Paraguay upon obtaining a Residence Card. Said document is only granted after the foreign citizen has submitted, among other documents, health certificate, work promise (not required for Argentinean, Uru- guayan, Chilean and Bolivian workers) police record certificate by INTERPOL and by the authorities of the country where the solicitor has lived during the last five years.
Workers in both the public and private sectors have the right to strike as set forth in the National Constitution. Union activity is likewise protected, with workers having the right to organize as unions, and with protection of union leaders against dismissal due to the union activities.
Contribution to the Social Security Administration (I.P.S.) is mandatory in Paraguay, per the following percentages:
– Employee contribution: 9.00% of salary received – Employer contribution: 16.50% on paid salary
2 Social Security (I.P.S.) benefits
Social Security covers risks of non-occupational illness, maternity, on-the-job accidents and occupational illness, disability, old age, and death of salaried workers in Paraguay.
The employer has the obligation to inform I.P.S. upon hiring a new employee and upon termination of the employee’s contract.
Law 98/92 establishes the regime of retirement and pensions by IPS. Retirement is conditioned by requirements of biological age and the years of service recognized to specific weeks of contribution. There are two types of pensions; regular pension and disability pension, which have different requirements. Disability pension is in turn divided into common illness disability pension or work accident or pro- fessional illness.
INDUSTRIAL AND INTELLECTUAL PROPERTY
Paraguay has ratified the Berne and Rome Conventions, the WIPO and Paris Inter- net Treaties, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and the MERCOSUR Protocol on trademark protection.
Paraguay’s trademark system is governed by Law No. 1294/98 and its Regulatory Decree No. 22.365/98. In view of it, any sign which identifies a product or service is considered a trademark. Trademarks can include one or more words, mottos, monograms, seals, vignettes, embossed letters, names, fantasy names, letters and numbers with different shapes or combinations, as well as color combination, labels, packaging and wrapping. The foregoing list is only illustrative and does not represent a limitation regarding signs that may be considered trademarks.
Decree No. 16939/02 has adopted the 8th Edition of the International Classification of Niza Agreement. Therefore, as from June 2003, the new International Classification of Products and Services is applicable in Paraguay in connection to trademarks.
With regard to the categories protecting products, all products included in the requested category may be claimed, and it is not necessary to specify such information. However, in categories regarding services, it is compulsory to specify all information of the services to be protected.
To apply for trademark registration it is necessary to hire a lawyer registered in the Direc- tion of Intellectual Property as agent. In our experience, the procedure of concession of a trademark usually does not take longer than 14 months. Once the registration is granted, it is valid for 10 years as of the date of concession and it may be renews indefinitely for equal periods.
Patents and Utility Models
The patents regime in Paraguay is regulated by the law on patents and inventio- ns No. 1630/2000 which protects the rights of holders of inventions and utility models.
The law establishes the patentability of new inventions of products or procedures implying an inventive activity having a potential industrial application.
The law also provides for international extinguishment of patent rights once the product is legitimately brought into the market. Thus the law establishes that if a product is in- troduced into the market of any country by the legal holder of the patent, such holder cannot prevent subsequent sales based on rights to same, which ultimately authorizes what are commonly called “parallel imports.”
The patent gives the holder the exclusive right to use it for a maximum term of 20 years (no extension allowed) as of the date of submission of the registration application to the Intellec- tual Property Office, an agency of the Ministry of Industry and Commerce. As of the third year following the registration request annual fees must be paid to keep registration active.
Any natural or legal person, national or foreign, can obtain a patent by submitting an application to the Direction of Intellectual Property.
According to law, patents cannot be obtained on the following: simple findings; scientific theories and mathematic methodologies; purely esthetic creations; economic or business schemes, plans, principles or methods, advertising or publicity, and schemes related to purely mind or intellectual activities, or gaming activities; software applications conside- red in isolation; diagnosis, therapeutic, surgical methods for treating people or animals; and the different ways of reproducing information.
Also, law excludes inventions whose commercial sale should be prevented in order to pro- tect the public order or morality, protect the health or life of persons or animals, preserve plants, and avoid serious damage to the environment; and on plants and animals except for microorganisms, and essential biological procedures for the production of plants and animals that are not nonbiological or microbiological procedures. New patents cannot be obtained for products or procedures included in the state of the art.
In accordance with the TRIPS agreement ratified by Paraguay in 1994, patents on phar- maceuticals have been granted as of January 1, 2005.
2 FINANCIAL ACTIVITIES
The financial system consists of banks, financial institutions and other entities devoted to financial intermediation, as well as branches of such entities authorized by the Central Bank of Paraguay (BCP). BCP, through the Banks Superintendency is the controlling authority in terms of finances and banking. Banks, Financial Entities and other Credit Entities General Law No. 861 of 1996 is the main legislation in finance and banking matters.
Regarding cooperatives, the Law regulating the Establishment, Organization and Func- tioning of Cooperatives of the Cooperative Sector No. 438/94. The authority on this is the National Institution of Cooperatives (INCOOP).
2. Institutional forms
The different forms of financial institutions include entities such as banks (public or pri- vate), financial institutions and cooperatives.
Moreover, the Banks Superintendency of BCP may authorize the establishment of Re- presentation Offices of a foreign financial entity established abroad, for the promotion of financial and business services provided abroad
The main characteristics of the entities mentioned are the following:
- BANKS: Banks are full-license financial entities, authorized to: Receive sig- ht deposits and term deposits in national and foreign currency, and execute contracts of banking checking accounts, issue and place promissory notes and Bonds in national or foreign currency, and certificates of negotiable deposit certificates, discount, buy and sell term bills of exchange originated in com- mercial transactions, grant loans in different modalities, discount, buy and sell promissory notes and other instruments of credit and payment, and, carry out commercial and financial leasing transactions. Only banks can use the terms “bank” or “banking” in their trade names.
- FINANCIAL HOUSES: Financial houses are limited-license banks that can per- form all regular banking transactions except those reserved to full-license banks, such as execute checking account contracts.
- COOPERATIVES: Cooperatives are not-for-profit economic and social entities or- ganized by voluntary associations of persons, to meet their members’ individual and collective needs. They can accept deposits and grant loans. Some of their features are: (i) members may join and drop out voluntary; (ii) democratic, self-managing governance with equality of rights and obligations for members; (iii) limitation of interest to capital contributed by members; (iv) non-profit distribution of surplus, in direct proportion to use of services, or per members’ participation in works undertaken in common.
- REPRESENTATION OFFICES: Representation Offices are entities authorized by the Banks Superintendency of BCP to exclusively promote financial products and services provided by financial entities abroad.
- BRANCHES. Branches of foreign financial entities have the same rights and obliga- tions as similar local entities. They are authorized to conduct their business per their established practices provided they are in line with the provisions of the Banking Law, and do not violate other applicable local legislation.
2.2 Establishment of financial entities
Banks and financial entities must be established as corporations, and their capital must be represented by registered shares. This requirement is not applicable for government banks or for branches of foreign banks, agencies or representative offices established in the country that may adopt any legal form. Persons interested in establishing financial entities must request authorization to operate from the Central Bank.
Requests for authorization must necessarily contain the draft bylaws, a program of activities to be undertaken, internal control and audit systems to be implemented, and list of shareholders of the company with indication of their participation in the capital stock and sufficient information as to the moral and economic sound- ness of those who will sit on the Board of Directors of the entity and other bodies. The Central Bank denies applications failing to meet these requirements.
Branches of foreign banks must accredit that they have authorization from the regulatory authorities in their country to operate in Paraguay and submit a report by same indicating solvency, valuation of assets, sound management and transparency of the entity in question.
Paraguay’s capital market has been reactivated since 1993. To this end several rules have been implemented with a view to providing an appropriate legal framework for develop- ment and strengthening of such activity.
The Securities Market Law No. 1284/98 regulates public offerings of securities and their issuers, including the securities offered, securities exchanges, and the National Securities Commission (CNV) as regulatory agency.
Securities transactions or trading can be performed in primary or secondary markets. Primary market is understood to be the one in which the issuer itself or an agent of same directly attracts financial resources for the securities placed for the first time. The secon- dary market is where transactions subsequent to the first placement occur.
The competent authority on securities market issues is the National Securities Commis- sion (CNV), which has penalty and correctional powers.
2 Public Offerings of Securities
Public offerings of securities are those made to the general public or certain groups, either by any means of communication or through personal offerings, to perform any type of legal act with such securities. All public offerings of securities must be authorized by the CVN. Legal entities organized abroad that make public offerings of securities in Paraguay are subject to the provisions of the said law.
The securities and their issuer must be duly registered with the securities market in order to make a public offering.
Paraguay has no antitrust law in effect or regulator. Therefore, there are no special anti- trust rules that can affect investments, takeovers or mergers.
Commercial Law regulates the commercial competence allowing competence agree- ments provided that they limit to certain zones, do not exceed a period of five years and do not affect the rights of third parties. Additionally, said law sets forth a series of acts which configure unfair competition, mentioned also in the Trademark Law. Finally, we should mention that in July 1997 the Congress passed Law No. 1,143 approving the MERCOSUR Protocol for Protection of Competition. However, for this law to come into force Paraguay must set up a regulator, which has not been done to date.
Foreigners may reside and work in Paraguay. If the foreign citizen will be residing for business purposes for more than 90 days, a temporary or permanent residency, or MER- COSUR residence is required. The process requires filing of certain documents and takes between 90 to 150 days.
There are no restrictions as to property rights, save that referred to in the Border Security Act, which stipulates that foreigners from any of the bordering countries may not be owners, co-owners or beneficiaries of rural real estate comprised within an area of 50 kilometers adjacent to the international borders.
Foreigners can engage in commerce and industry with no limitation.
Foreigners may be naturalized as citizens and enjoy all the rights afforded to Paraguayan natives three years following obtaining Permanent Residence and provided they give evidence of their continued presence in the country.
Please only use as a general guide
FERRERE LEGAL SERVICES
Post available in: English