Paraguay: A Friendly Investment Environment
Paraguay’s small land mass borders Argentina, Bolivia, and Brazil. It covers 406,752 square kilometers and houses a population of approximately 7 million people. Despite being one of two landlocked Latin American countries (together with Bolivia), it nevertheless powers a significant economic and logistical hub. It’s a great strategic base for foreign businesses expanding into the region.
In the last few decades, Paraguay has started to fight against extreme poverty and adopted many business-friendly policies that have led to a local economic boom. Between 2004-2017, the local economy grew at an average rate of 4.5% per year. Furthermore, since 2003, extreme poverty has fallen by 49%. This has resulted in a flourishing middle class which has almost doubled since 2003, forming around 38% of the total population in 2015.
Paraguay’s Real Estate Sector
If you are thinking of expanding into Latin America one of Paraguay’s leading sectors that you should consider is real estate. The country has a spectacular range of unspoiled terrain that is perfect for nature lovers, anglers and bird-watchers. Paraguay’s different real estate opportunities range from rainforest, ranches and subtropical farms to marshland and savanna. The vast Chaco region, which is stark and sparsely populated, is great for residency and outdoor lifestyle activities such as trekking.
Paraguay real estate is broken into two separate, natural wards by the Paraguay River. The first part is the Chaco region. It lies on the west side of Paraguay and is an enormous piedmont reach of scrub and marsh. On the east is the Paraneña region. This ward is a powerful blend of fertile, grassy farmland, valleys, plateaus and rolling hills.
Furthermore, the eastern Paraneña region is home to almost 95% of the Paraguayan population. This is because it is easier to live in this part of the country because of climate and geography reasons. The large Parana River is the only link between land-locked Paraguay real estate and the sea.
Moreover, the capital of Paraguay real estate is located on the hills above the Rio Paraguay. Asuncion is a mix of colonial, beaux-arts buildings and glitzy modern attitude. Most of the popular Paraguay real estate scapes are very closely situated to the capital. There’s Itaguá, the weaving capital famous for its spider web or ñandutí lace and also the lakeside resorts of San Bernadino and Areguá, both on Lago Ypacaraí.
Lastly, foreign investors are very welcome within the Paraguayan real estate market. They are stimulated to engage in conducting business and won’t find restrictions on buying and owning goods in the country. However, foreign investors must follow certain legislation and rules set by local authorities regarding acquiring and owning properties.
How Easy is it to get a Paraguayan Visa?
Your citizenship will decide what type of visa you’ll need to enter Paraguay.The country has layered visa regulations that offer favourable treatment to 60 countries, provided they present a valid passport. These countries are however subject to various lengths of stay.
Citizens from the following countries can obtain a visa upon arrival: Australia, Canada, New Zealand, Oman, Qatar, United Arab Emirates, and the United States. Note that this entrance vis comes with a fee which is paid in US dollars.
You can obtain a Permanent Residence Permit in Paraguay within around 3 months, given you provide the required information in a timely manner. The process is relatively straightforward, though local legal assistance is recommended.
With permanent residency, you are eligible to obtain a Paraguayan identity card. The identity card is what individuals use to register for a tax identification number, known as a RUC. This taxpayer registration is an essential step. The Permanent Residence Permit comes with some advantageous tax benefits when you register as a taxpayer.
Application and SUACE process
You must pay a deposit to initiate the application process. The total deposit value equals 35 monthly minimum salaries in Paraguay. Once granted residency, you can withdraw this deposit. Currently, this sits at a total of PYG$24,554,600 or around US$5000. You can deposit the amount in full at the country’s Central Bank, or any commercial bank without interest.
SUACE stands for Sistema Unificado de Apertura y Cierre de Empresas, or in English: Unified System for the Opening and Closing of Companies. This system offers a slightly different application process for foreign investors. The SUACE procedure is beneficial in that it provides closer assistance with setting up a business and getting a residence permit.
You’ll need to submit some additional information if you want to go through SUACE to obtain your residence permit. You must submit a document that verifies your suitability to use SUACE to accompany your application. This document is issued by Paraguay’s Vice Ministry of Industry and Commerce. Take note that this document will distinguish between startups and a business expansion, so be clear about the nature of your business when requesting it.
Additionally, your new company must make an upfront primary capital investment to get the ball rolling.
Business Opportunities in Paraguay
Your company could have various purposes for expanding to Paraguay. One of the main reasons for most expansions is rural land. Rural land can be farmland, or raw land in the Chaco, where you can purchase property for US$50 to US$100 per hectare. For agriculture, Paraguay offers high-grade value land in the Southern Cone area.
This kind of agricultural property is attractive for semi-active investors who are looking for a high return on investment and location for future development while preserving capital. Upon expanding to Paraguay, you can choose to have your property to be managed for you. However, it is wise to call in local help when choosing your managing partner.
Another attractive sector is green energy. Hydropower forms almost all of the entire electricity generation in Paraguay. Two binational dams, the Itaipú and Yacyretá, generate the bulk of Paraguay’s energy. Itaipú is the largest power station in the country and is operated in cooperation with Brazil. This is because almost 90% of the energy generated in Paraguay is sent to Brazil.
Paraguay’s business environment offers many opportunities for businesses expanding to the region. These opportunities can differ from being active in the agricultural sector by acquiring property or investing in the well-performing energy sector. In the end, Paraguay offers a healthy and inviting foreign investment environment.
Source: Biz Latin Hub