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Paraguay offers Incentives for Foreign Investments

Law 60/90 offers a fiscal incentives regime for national or foreign capital investment.

According to Law 60/90, national or foreign investment projects that are approved for this regime will be exempt from the following charges:

Fees and internal taxes on the imports of capital goods, raw material and inputs intended for local industry and foreseen in the investment project.

Value added tax when acquiring capital goods that will be used in industrial, agricultural or livestock production cycle.

Taxes on remittances abroad for the payment of interest and commissions and reimbursement of capital (levied on investments over US$ 5 million).

All taxes imposed on the establishment, incorporation and registration of companies or enterprises.
Taxes and other fees on remittances abroad for the payment of interest and commissions and reimbursement of capital when the investment is financed from abroad and is more than US$ 5 million.

Investment projects that want to benefit from this law need to receive approval by the Ministry of Industry and Commerce and the Ministry of Finance.

Eligible Investments

The exemptions established in Law 60/90 are applicable to investments in financing, capital goods, specialized technical assistance, mining, hotel, leasing of capital goods, provision of cargo and passengers air transport services, public transportation, health, radio, television, press, rural and urban fixed telephone services, mobile telephone services, scientific investigation, silos, storage and data transmission services, among others.

To access more information about the benefits of this Law along with guide to request the benefits, please go here.

Maquila Regime

Incentives for Foreign Investments

Maquila is a production regime in which companies located in Paraguay can produce goods and services for export. The production is done under the request of a foreign company (headquarters) through an international contract, and the production can be sent to any country in the world.

The main benefits this regime offers are:

Exemption of import duties on raw material, inputs, parts and components that enter the country temporarily for their transformation and later export.

Exemption of import duties on machinery and equipment related to the Maquila activity during the period established in the contract.

Possibility of national goods and services provision as a complement to the Maquila production system.
Single tax of 1 % to be levied on the value added in national territory.

Companies interested in carrying out Maquila activities must present a “Maquila Program” to the National Council for the Maquila Export Industries (CNIME).

Maquila companies with approved programs must provide sufficient guarantee to the General Customs Office for the amount of the taxes that may eventually be applicable, which shall be canceled and returned when the temporarily imported merchandise exit the country. Whichever type of guarantee presented – global or floating –, it will be exempt from all types of taxes and interests. This guarantee is also applicable when goods, products or services are under the Maquila temporal export regime.

For further information about the Maquila Regime, please click here .

Executive Secretariat of CNIME: [email protected]

Free Trade Zones Regime

Paraguay offers a free trade zones regime for the establishment of commercial, industrial and services enterprises. Companies established in a free trade zone whose activities are focused exclusively to exports pay a single tax of 0,5% of the total value of gross export income, known as “free trade zone tax”.

Companies which, besides their exports, also sell their products or services in the Paraguayan territory are subject to Corporate Income Tax of 10% of the proportion of products sold in national territory.

Under this regime, machinery, capital goods and raw material enter the Free Trade Zone with a 0% import tax. The commercial exchange of goods and services between Free Trade Zone users, as well the stocking of raw materials and goods, are tax exempt.

For further information on the Free Trade Zone Regime, please click here.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.

www.gatewaytosouthamerica.com

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