Countries › Paraguay › Guide › 15. Exiting › Mergers, transformations and group reorganizations

Mergers, transformations and group reorganizations

Last verified: 2026-10-28 · Status: Stable

Paraguayan companies can merge or change type without liquidating: the Civil Code lets creditors oppose a merger until paid or secured and gives dissenting shareholders a withdrawal right. Ley 6380 exempts reorganization transfers from IVA and carries IVA credits to the successor, but contains no express IRE rollover, so the income tax side depends on regulations. Larger deals may need a competition filing within ten business days, and the beneficial owner registry must be updated within 15 business days.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026 (bcp.gov.py cotización referencial). Minimum wage figures use Resolución MTESS 670/2026: monthly PYG 3,044,000, daily for monthly paid workers PYG 101,467 and daily minimum wage (jornal) PYG 117,077, from 1 July 2026. Conversions are for orientation only.

Key facts

IVA on reorganisation transfers (mergers, spin offs, transformations)	Exempt Ley 6380/2019 art. 100 num. 1 j, as of 2026-10-28 · in force
Special balance available to creditors before transformation	30 daysCódigo Civil art. 1189 b, as of 2026-10-28 · in force
S.R.L. vote for transformation or merger imposing greater liability	Unanimity Código Civil art. 1177, as of 2026-10-28 · in force
Merger control review period before tacit approval	90 business daysLey 4956/2013 art. 14 and 38, as of 2026-10-28 · in force

The rule

1. Merger. In a merger two or more companies dissolve without liquidation to form a new one, or one absorbs others that dissolve without liquidation. The new or absorbing company takes over their rights and obligations once the merger agreement is formalised, but it is effective against third parties only from registration. Each company approves a merger commitment under its rules for early dissolution and prepares a balance sheet at the agreement date available to partners and creditors; the publicity referred to in art. 1193 b) is made; creditors may oppose and the merger cannot proceed until they are paid or adequately secured. The final merger agreement lists dissenters exercising the withdrawal right and opposing creditors and is registered like a transformation. Withdrawal and preference rules for transformations apply.
Cost to do it: Notary, publication and registry costs, market priced; cash for dissenters and opposing creditors.
Example: Two sister S.A.s merge: each extraordinary meeting approves by majority of voting shares, balances are made available and creditors who oppose are paid or secured before the final deed. / Not quantified.Ley Nº 1183/1985 Código Civil, Art. 1192, 1193, 1194 and 1195, 1985-12-18 official text · verified 2026-10-28

2. Transformation. Any company can adopt another type without dissolving; the rules on transfers of commercial establishments do not apply. Transformation needs unanimous partner agreement unless otherwise agreed or provided, a special balance sheet available to creditors for thirty days, five days of publication, a deed and registration. Partners with unlimited liability stay liable for earlier debts unless creditors consent (presumed if they do not object within thirty days of an authentic communication). Where unanimity is not required, dissenters have a withdrawal right. In an S.A. it is decided by the majority of voting shares; in an S.R.L. a change of object, transformation, merger or other change imposing greater liability on partners needs unanimity.
Cost to do it: Notary, publication and registry costs, market priced.
Example: Converting an S.R.L. with three partners into an S.A. needs all three to agree. / Not quantified.Ley Nº 1183/1985 Código Civil, Art. 1091, 1177, 1186, 1187, 1189 and 1190, 1985-12-18 official text · verified 2026-10-28

3. EAS reorganizations. The general transformation and merger rules apply to an EAS; members of absorbed companies may receive cash, shares, quotas or other assets as sole consideration in a merger or spin off. Any company may become an EAS before dissolution by its usual decision rules, but an EAS can become another type only by unanimous decision of all voting shareholders. Transformations, mergers and spin offs must meet the share company reporting rules, and members have a five business day inspection right before the meeting.
Cost to do it: No fee stated in the law.
Example: A minority holder of 1 percent can block an EAS from converting into an S.A. / Not quantified.Ley Nº 6480/2020 Que crea la Empresa por Acciones Simplificadas (EAS), Art. 22, 33 and 34, 2020-01-08 official text · verified 2026-10-28

4. Tax: IVA neutral, IRE unclear in the law. Transfers resulting from a business reorganisation, including mergers, absorptions, spin offs or divisions and transformations, are exempt from IVA, and the predecessor's IVA credit passes to the successors in proportion to the net equity transferred. Reorganisation expenses for acquisitions, mergers and spin offs may be amortised over up to five years. Ley 6380 has no express IRE deferral for reorganisations; the result of transferring a business or shares is IRE income under the procedure set by regulation.
Cost to do it: No IVA on the reorganisation transfer; IRE depends on regulations and facts.
Example: An absorbed company with PYG 400,000,000 of IVA credit transferring all of its equity carries the full PYG 400,000,000 to the absorbing company. / About US$68,163 of IVA credit preserved.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 8 num. 7, 15 num. 9, 88 and 100 num. 1 j), 2019-09-25 official text · verified 2026-10-28

5. Competition filing and registries. Mergers and acquisitions of control are concentrations to be notified within ten business days of the written agreement when the 45 percent share or 100,000 monthly minimum wage turnover thresholds are met, with a 90 business day review and tacit approval. Changes in the registry and beneficial owner data must be reported within 15 business days.
Cost to do it: Review fee 0.005 to 0.1 percent of the transaction value in Paraguay.
Example: Turnover threshold PYG 304,400,000,000. / About US$51,871,834.Ley Nº 4956/2013 De Defensa de la Competencia; Ley Nº 6446/2019 Que crea el registro administrativo de personas y estructuras jurídicas y el registro de beneficiarios finales, Ley 4956 art. 14, 27 and 38; Ley 6446 art. 7, 2013-05-29 official text · verified 2026-10-28

Worked example

Group simplification: a Paraguayan S.R.L. is absorbed by its sister S.A. Partners of the S.R.L. must agree unanimously, creditors of both may oppose, IVA does not apply to the transfer and IVA credit moves to the S.A.; check the IRE regulations before assuming no gain.

Step by step

Map approvals: S.A. majority of voting shares; S.R.L. unanimity; EAS bylaws and art. 34.
Prepare balance sheets and make them available to partners and creditors.
Publish, handle creditor oppositions and dissenters.
Sign and register the final deed; check merger control and file within ten business days if needed.
Update RUC, beneficial owner registry and employee records.

Common traps

A merger is not effective against third parties until registered.
Creditors can stall a merger until paid or secured.
Do not assume income tax neutrality; Ley 6380 is express only for IVA.
A single S.R.L. partner can veto a transformation or merger.

Sources

← Asset sale and transfer of a going businessDirector, liquidator and shareholder liability on exit →

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