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Biná Shefa · Corporate Finance and Strategic Growth

Why Paraguay

Paraguay does not offer one regime. It offers five paths.

The first legal decision is not whether maquila pays, but which path fits your operation. They cannot be freely combined, and each one gives and requires different things.

01

Maquila

Law 7547/2025 and Decree 5714/2026

What it gives
A single 1% tax instead of income and dividend taxes. Inputs and equipment with duties suspended.
What it requires
A contract with a foreign parent, an approved programme and exporting.
Sales in Paraguay
Up to 10% of last year’s exports, fully taxed.
Term
20 years, renewable.
02

Investment incentives

Law 7548/2025 and Decree 5432/2026

What it gives
No duty or VAT on the project’s capital goods. From USD 13 million per project, ten years without dividend tax and without withholding on interest on foreign loans, depending on the case. It does not exempt corporate income tax.
What it requires
An approved project and keeping the goods for five years. It does not apply to goods with compatible and sufficient local production.
Sales in Paraguay
No restriction.
Term
A 20-year window.
03

Assembly

Law 7546/2025

What it gives
For electrical, electronic, electromechanical and digital equipment. No duty on materials, and VAT equivalent to 1.5% on inputs and 4.5% on sales.
What it requires
At least 20% national value added and formal employment.
Sales in Paraguay
No restriction.
Term
20 years, renewable.
04

Free zones

Law 523/1995

What it gives
A single 0.5% tax on the invoice for exports to third countries.
What it requires
Operating inside an authorised free zone. What is produced there has no tariff preference when entering Brazil or Argentina.
Sales in Paraguay
Up to 10% of revenue under the single tax.
Term
30-year concessions, extendable.
05

General regime

Law 6380/2019

What it gives
No special benefit: 10% on net income and 15% on dividends to foreign shareholders. It is the baseline against which the others are measured.
What it requires
Nothing additional.
Sales in Paraguay
No restriction.
Term
No term.

Combinations

What can be combined?

Some choices rule out others. Those selling mainly to Mercosur look at maquila; those who need the Paraguayan market, at assembly or the general regime.

  • Assembly with investment incentivesYes. The law expressly allows it.
  • Assembly with maquilaNo. Assembly is incompatible with other special regimes, except incentives.
  • Maquila with other activitiesYes, but kept apart. Income outside the programme pays the general regime.
  • Maquila with investment incentivesGrey area. No law expressly bans or allows it, so it is treated as an assumption to confirm with the authority.

Maquila

Maquila in two exhibits.

What it is and how inputs come in. The tax is 1% on the larger of two amounts: national value added or the export invoice. It is a variable of the applicable regime, not proof of profitability.

1/2

What is maquila?

Production or services under contract for foreign markets.

  1. 1

    Foreign parent

    The company that contracts the production or services.

  2. 2

    Production in Paraguay

    Goods are processed or assembled, or the service delivered, with local resources.

  3. 3

    Export

    Products or services go out to international markets.

2/2

Temporary import under maquila

Authorised inputs and equipment enter with customs duties suspended, are processed in Paraguay and leave as finished goods.

  1. 1

    Inputs and equipment come in

    Raw materials, parts, components and inputs for production.

  2. 2

    They are processed in Paraguay

    Manufacturing, assembly or processing that adds value in the country.

  3. 3

    They are re-exported

    Finished goods ship to destination markets under the programme.

What we check for each product

  • Operating under maquila does not by itself guarantee preferential origin or zero duty in Mercosur. Origin rules are checked product by product.
  • US surcharges depend on each product’s tariff classification, origin and date, and have exceptions.
  • Profitability cases are published only with documented cash flow, assumptions and sensitivities.

Source and review

Maquila Law 7547/2025 and its regulations, published by Paraguay’s Ministry of Industry and Trade. Page last reviewed: October 2026.

See the map of maquila companies

01–56–3090+

Guarantees

The rules for those who invest.

Beyond the chosen regime, these rules apply to the company and its shareholders.

Investment Law 117/91

Foreign investors have the same guarantees, rights and obligations as local ones, under the same tax regime. It guarantees free exchange and sending dividends abroad, subject to the taxes set by law.

Arbitration Law 7561/2025

It governs private arbitration, domestic and international, seated in Paraguay.

EAS Law 6480/2020

The Simplified Stock Company can be set up by one or more persons and simplifies incorporation.

Investment and double-tax treaties

Paraguay has investment protection agreements and double-tax treaties with several countries. Whether they apply to your case is confirmed in the analysis, based on the investor’s country.

Complementary regimes

  • Raw materials. 0% duty on raw materials and inputs with no local production, for those selling in the local market.
  • Automotive policy. Benefits for making or assembling vehicles and auto parts, aimed at the local market.
  • Industrial parks. Plots and plants with infrastructure authorised by the Ministry of Industry and Trade (Law 4903/2013). Benefits are confirmed case by case.

Markets

In force, for whom and since when?

An agreement existing does not mean your product has a preference. The questions are the same for each market: whether it applies to Paraguay today, whether your tariff line is included, what origin rule it requires and whether the landed cost stays competitive.

  • MercosurIn force

    Zero duty entering Brazil and Argentina if the product meets the origin rule, checked tariff line by tariff line. Goods made in a free zone are excluded.

  • Automotive agreement with Brazil (ACE 74)In force, by quota

    Zero duty by annual quota and regional content. From 2027, maquila auto parts have their own USD 750 million quota with 50% regional content.

  • European UnionProvisional application

    Since 1 May 2026 for all four countries, Brazil included. Producing in Paraguay gives no more access than producing in Brazil, except for Paraguay’s own quotas and 17 auto-part subheadings.

  • SingaporeIn force

    Free trade in force for Paraguay since 1 February 2026.

  • EFTANot yet in force

    Signed in September 2025. As of October 2026 it was not yet in force for Paraguay.

  • TaiwanBy list

    Zero duty for a list of Paraguayan products. Brazil does not have this preference.

  • United StatesNo treaty

    Paraguay is not on the Section 301 surcharge lists. Against a Brazilian product the gap reaches 37.5 points, with exceptions. It depends on real origin and nothing guarantees it will last: it can improve a project, but should not be the reason it works.

  • ALADI and other Mercosur agreementsBy product

    Chile, Bolivia, Peru, Colombia and Ecuador, each with its own origin regime. Israel, Egypt, India, Southern Africa and Mexico, by limited lists.

General information, as of 21 October 2026. It is not legal or tax advice. Rules are validated with a lawyer licensed in Paraguay before each investment decision.

Which path is yours?

Start with a free first signal. If the numbers justify it, your Project Profile assesses the regime with your data.

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