Global Connections Paraguay

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Paraguay’s natural resources represent a great benefit thus making it an ideal business platform for agriculture, stockbreeding, real estate, and to maintain a good standard of living.

Currently, Paraguay is the country with the most open economy in Latin America, has the best demographic window of the region, ranked first in the South American Economic Climate Index scoring 7.2 according to Getúlio Vargas Foundation and the Institute of Economical Studies from the University of Munich, Germany. All of these factors and many others make of this country a magnificent business platform.

Abundance of natural resources

Abundant clean a renewable electrical energy

Mainly young population

Stable macroeconomy

Advantages and benefits for investment

Quick return on investment

Abcense of natural disasters

Is the world's top exporters of soybeans and beef

Free navigation of the rivers

Strategic location in South America

Good levels of quality of life and safety

Competitive advantages for export

Laws that benefit investments:

Law 60/90 of investments

“Incentive regime to import capital assets and tax exemptions for industries”

Benefits and tax exemptions
Benefits and tax exemptions

• Value-added tax in the acquisition of imported capital assets (as well as capital assets produced in Paraguay) to be used for the establishment of industrial or agricultural production.
• All taxes levied to the constitution, inscription or registry of societies and companies.
• Internal duties or taxes on imports of capital assets, raw materials, and supplies to be used on investment projects for the production of capital assets.
• Fees and other internal taxes to shipments and foreign payments in concept of interests, commissions, and capitals of the same when the investment has been financed from abroad and it is at least of US$ 5.000.000 (five million dollars), in a time frame of 10 years.

Scope of applicability of benefits
The exemptions established in the Law are applied, amongst other things, to investments in: financing, capital assets, specialized technical assistance, mining, hotel industry, leasing of capital assets, provision of air cargo and passenger transportation services, waterway transportation, general freight transport, passengers public transport, health, radio, television, press, rural and urban land line, mobile telecommunication, scientific investigation, silos, and storage and transmission of data services.

Law 1064/97 of Maquila

“Outsourcing regime for productive processing and export”

By means of Maquila, investors can introduce to the country; goods, products or services in order to be assembled, repaired, improved, or processed for their subsequent exportation, once the value added or “Paraguayan element” is incorporated.
Paraguayan legislation does not impose restrictions regarding the types of products or services included in the maquila industry. The national policy of maquila activity in Paraguay is regulated and monitored by the National Council of the Maquila Export Industry (CNIME for its acronym in Spanish). Those who can benefit from this law are individuals or corporations, domestic or foreign, domiciled in the country.www.maquila.gov.py)

The most important benefits are:

• 1% Maquila Unique Tax (over national value added or turnover, whichever is greater)

• Cancellation of fees and taxes to importation of raw materials and consumables, and capital assets.

• Up to 10% of the import can be destined to the internal market, since the second year, prior nationalization of consumables which were imported with suspension.

• Recuperation of the value-added tax through Tax Credit.

• The possibility to develop Mixed Maquila

Types of Maquila

Paraguayan legislation allows the following categories of maquila:

• Idle Capacity Maquila: this category is oriented to those companies with the possibility to implement productive processes of maquila with remains, excess or idle factors than the ones used normally.

• Sub-Maquila: maquila companies authorized to make contracts of sub-maquila, when they involve a complement to the productive process of the activity object of the program, to be subsequently integrated to the maquila company who originally hired the service and that will finish the product for the subsequent exportation. Companies exclusively dedicated to sub-maquila may be established.

• Maquila of Intangible Service: category aimed at giving an intellectual added value or another sort similar to intangible goods imported temporarily by any other electronic mean. It includes the import of intangible goods or intangibles for its transformation with national added value and subsequent exportation by electronic means (for tangible and intangible goods) or tangibles (only for intangible goods).

• Maquila with Shelter Program: category consisting of approval in favor of a company, of a program that will serve to make export projects from companies that will facilitate technology and production materials, without running them directly. For the fulfillment of this program, foreign companies must build a branch in Paraguay (“Twin Plant”) or set up a consortium with a Paraguayan company, in this last case, it is not necessary for it to be domiciled in Paraguay.