Paraguay Investment Incentives 2026

Law 60/90 - Promotion of Investments

Law 60/90 is Paraguay's primary investment incentive law. The Investment Council evaluates projects and, if approved, grants irrevocable tax incentives by bi-ministerial resolution of the Ministries of Industry and Commerce and Finance. Projects are typically approved within 45 days of filing.

Total exemptions available:

• All taxes on incorporation of companies
• Customs duties and similar taxes on imports of capital goods
• Taxes and charges on foreign exchange transactions from capital contributions or project operations
• Taxes on remittance of interest and fees related to foreign loans (for loans of $5M+ from recognized financial institutions)
• Taxes on dividends and profits generated by the investment project (up to 10 years for investments over $5M)

Eligible investments include cash, supplier credit, capital goods (transport, industrial equipment, electronics), trademarks and technology transfer, and leasing of capital goods (especially for river and air transport). An environmental license is required. Applications are submitted through mic.gov.py/ley-60-90/.

Law 5542/2015 - Guarantee for Investments (Tax Rate Invariability)

This law protects capital investments and guarantees that the income tax rate applicable to the investment cannot be increased for a defined period, based on investment size:

• 10 years: Standard invariability for qualifying investments
• 15 years: For investments between USD 50,000,000 and USD 100,000,000
• 20 years: For investments of USD 100,000,000 or more

Additional protections under Law 5542/2015:

• Capital remittance abroad (after 2 years from company startup)
• Profit remittance (no waiting period)
• Special export regime - maintain percentage of foreign currency abroad for authorized obligations
• Tax invariability survives company acquisition or share transfer (remaining term continues)
• Investments cannot be subject to appropriation or confiscation

Industries with high social content receive additional benefits: exoneration of the additional 5% profit distribution tax, and reduction of remittance tax rate by 1% per 100 direct employees (up to 50% of the applicable rate).

Law 5542/2015 can be accessed in combination with Law 60/90 benefits in certain cases.

Free Trade Zones (Law 523/95)

Free trade zones are delimited geographic areas where companies operate under a special customs and tax regime. Concessions are granted by the Executive Branch for 30-year periods, extendable by legislation at the time of extension.

Tax treatment:

• 0.5% single tax on gross income from sales to third countries
• 0% income tax (IRE)
• 0% IVA (value-added tax)
• 0% dividend and profit distribution tax
• 0% import duties on raw materials, merchandise, and capital goods
• 0% departmental and municipal taxes
• No time limit on merchandise storage

Activities permitted: Commercial (intermediation without transformation), industrial (manufacturing for export), and services (logistics, transportation, repair, calibration, telecommunications, data processing, construction, tourism). DNIT maintains an on-site customs office. MERCOSUR origin certificates are available for qualifying goods.

Maquila Regime (Law 1064/97)

The Maquila regime allows a Paraguayan company to produce goods or provide services for export under contract with a foreign entity, with a 1% single tax on value added in Paraguay (or on invoice value from headquarters, whichever is higher).

Key benefits include suspension of all taxes and duties on raw materials and inputs, exemption from income tax, VAT, customs duties, port/airport taxes, and departmental/municipal taxes. Three modalities are available: Pure Maquila (export only), Idle Capacity Maquila (export + local market with domestic taxes on local sales), and Shelter Maquila (intermediation services).

The Maquila regime can be combined with Law 60/90 capital goods. Any person or company with Paraguay domicile can qualify - no ownership restrictions or minimum capital. See the full Maquila program guide for comprehensive details.

Raw Materials Tariff Exemption

Companies selling into the Paraguayan local market can import raw materials and inputs at 0% tariff when those materials are not produced nationally. This benefit is separate from Law 60/90 and is administered directly through MIC.

This regime is particularly relevant for manufacturing and processing companies that source inputs from abroad and sell finished products domestically. The application is made through MIC, which verifies that equivalent materials are not available from national producers.

National Automotive Policy (Law 4838/12)

Paraguay's automotive policy provides sector-specific incentives that are compatible with Law 60/90 and Maquila:

• 0% import duties on capital goods
• 2% IVA on imports and domestic sales (vs standard 10%)
• 20% preference margin in government procurement for qualifying vehicles and parts

Applications are submitted through mic.gov.py/politica-automotriz-nacional/. The regime covers vehicle assembly, parts manufacturing, and related automotive industry activities.

Industrial Parks (Law 4903/2013)

Industrial parks provide physical infrastructure with energy, water, telecommunications, and waste treatment facilities. Companies operating within these parks can access combined benefits from Law 60/90, Maquila, and the automotive policy in a single location.

Parks are located in multiple departments: Alto Paraná, Central, Itapúa, and Presidente Hayes, with additional parks under development. The industrial park model reduces setup time for physical infrastructure and provides a ready-made operating environment.

International Investment Protections

Beyond domestic incentive programs, Paraguay provides strong international legal protections for foreign investors:

Paraguay is also party to the New York Convention (enforcement of foreign arbitral awards), the Inter-American Convention on International Commercial Arbitration, and has a national arbitration center (CAMP).

How to Apply for Investment Incentives

Applications are processed through different institutions depending on the incentive program:

REDIEX can provide orientation on which programs fit a specific investment and help channel applications to the appropriate institutions. All applications require a detailed investment project, financial statements, and economic impact data.