Countries › Paraguay › Guide › 10. Capital markets and finance › Secured lending and collateral in Paraguay: registered pledges, open pledges, mortgages for banks, foreign currency security and pledges over book entry securities

Secured lending and collateral in Paraguay: registered pledges, open pledges, mortgages for banks, foreign currency security and pledges over book entry securities

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

Paraguay's Civil Code, as reworded in 2006, lets lenders take a registered pledge over movables without taking possession, either for a fixed debt or as an open pledge up to a maximum amount that can secure future or conditional obligations, and enforce it in executive proceedings. Mortgages and pledges in favour of financial entities last 20 years from registration before they must be renewed, and their judicial sale needs no expert valuation, with a second auction at a 25 percent discount or award to the creditor at two thirds. Security can be granted and registered in foreign currency, pledges over book entry securities are perfected by entry in the depository account, and exchange collateral is sold by auction without a court case.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026. Fines tied to the minimum wage use PYG 3,044,000 per month and PYG 117,077 per daily jornal, in force from 1 July 2026 under Resolución MTESS Nº 670/2026. Conversions are for orientation only.

Key facts

Non possessory registered pledge available	Yes, by registration in the Registro Prendario or the asset registry Civil Code art. 2327 as reworded by Ley 3120/2006, as of 2026-10-28 · in force
Open pledge for future or conditional debts up to a maximum amount	Yes Civil Code art. 2294 and 2335, as of 2026-10-28 · in force
Duration of registered security in favour of financial entities before re registration	20 yearsLey 861/96 art. 93, as of 2026-10-28 · in force
Discount at second auction in bank enforcement	25 %Ley 861/96 art. 94, as of 2026-10-28 · in force
Security registrable in foreign currency	Yes Ley 434/94 art. 2, as of 2026-10-28 · in force
Unified movable collateral law in force	No, pledge rules remain in the Civil Code Civil Code art. 2294 onwards, as of 2026-10-28 · in force

The rule

1. Pledge and open pledge. By a pledge a movable or credit instrument is delivered to the creditor to secure a certain or conditional, present or future obligation; it may be granted by the debtor or a third party, and may secure a certain debt or be an open pledge (prenda abierta). To be enforceable against third parties it must be in a public or private instrument of certain date stating the amount of the debt or, for an open pledge, the maximum amount secured, with a detailed description of the assets. The pledge secures principal, agreed, default and penalty interest, penalties, damages and enforcement costs; for an open pledge preference reaches only the maximum amount, and any excess is unsecured.
Cost to do it: Notarial or certified instrument plus registry fees; amounts depend on the registry tariff and are not reproduced here.
Example: A distributor can grant an open pledge over its inventory with a maximum of PYG 3,000,000,000 that secures all future supplies on credit. / An open pledge capped at about US$511,000 secures that amount only; any balance above it ranks as unsecured.Ley Nº 1183/85 Código Civil, art. 2294, 2296 and 2299 as reworded by Ley Nº 3120/2006, Civil Code art. 2294, 2296 and 2299, 2006-12-20 official text · verified 2026-10-28 · changed: Ley 3120/2006, promulgated 20 December 2006, reworded Civil Code art. 2294, 2296, 2299, 2306, 2327, 2330, 2335, 2339, 2346 and 2353 to introduce the open pledge and modernize the registered pledge.

2. Registered pledge without dispossession. A registered pledge (prenda con registro) needs no delivery: registration in the Registro Prendario creates it and the debtor keeps the goods as depositary; for vehicles and other registrable goods, registration in their own registry is enough. It can secure certain and present or conditional and future obligations. Goods attached to mortgaged land cannot be pledged unless the mortgagee knowingly accepts it in writing, but a mortgage registered after the pledge does not affect the pledge. The registered pledge gives a special privilege for principal, interest and costs and the same executive action and seizure as a mortgagee. A certain pledged debt may be split into endorsable promissory notes registered with their endorsements, and the registered contract (with any notes) gives the creditor executive action over the goods or the insurance indemnity, before the court of the debtor's domicile or where the goods are. From the sale proceeds, court, administration and conservation costs come first, then taxes on the goods, then the pledgee's principal and interest.
Cost to do it: Registry fees of the Registro Prendario or the vehicle registry; not reproduced here.
Example: A bank financing a harvester registers the pledge in the Registro Prendario and the farmer keeps using the machine. / Pledgee's recovery on a US$150,000 pledged truck comes after court costs and taxes on the truck.Ley Nº 1183/85 Código Civil, art. 2327, 2330, 2335, 2339, 2346 and 2353 as reworded by Ley Nº 3120/2006, Civil Code art. 2327, 2330, 2335, 2339, 2346 and 2353, 2006-12-20 official text · verified 2026-10-28

3. Mortgages and pledges for financial entities. Mortgages and pledges in favour of financial entities, duly registered, and non possessory pledges last with full effect until the debt is repaid, for 20 years from registration, and must be re registered before the term expires; the lender may release secured properties once more than 50 percent of the debt is repaid. In enforcement for financial entities the assets may be sold judicially as a whole or in lots, with the debt plus interest and costs as base price if none was set in the deed and no expert valuation; if the first auction has no bidder, a second one is held with a 25 percent reduction, or the asset is awarded to the creditor for two thirds. Financial entities need not post bonds in executive proceedings in the cases set by law.
Cost to do it: No expert valuation cost in bank enforcement; re registration fee before 20 years.
Example: A bank's mortgage registered in 2010 must be re registered before 2030 if the loan is still outstanding. / A property securing a US$400,000 loan that finds no bidder can be re auctioned with a 25 percent cut or awarded to the bank for two thirds of the base.Ley Nº 861/96 General de Bancos, Financieras y otras Entidades de Crédito, Art. 93, 94 and 96, 1996-06-24 official text · verified 2026-10-28

4. Security in foreign currency and over securities. Foreign currency obligations may be secured by registered pledges, mortgages, warrants or other guarantees for the amount in that currency, registered showing the obligation and guarantee amounts, and attachments are recorded in that currency. For securities represented by book entries, liens and pledges must be entered in the corresponding depository account; for a pledge, the entry is equivalent to delivery of possession and is enforceable against third parties from registration. Bonds may be secured by any guarantee allowed by law, registered before placement starts. Exchange collateral between brokers, exchanges and clients is created by a private instrument of certain date and enforced by auction on the exchange no later than the next business day after delivery, without a pledge enforcement case.
Cost to do it: Depository entry fees under the depository's approved tariff.
Example: A lender takes a pledge over listed bonds simply by having the pledge entered in the borrower's account at the caja de valores. / A US$2 million dollar loan secured by a mortgage is registered for US$2 million, not a guaraní equivalent.Ley Nº 434/94 Obligaciones en Moneda Extranjera; Ley Nº 7503/2025 Sistema Nacional de Pagos; Ley Nº 7572/2025 Mercado de Valores y Productos, Ley 434/94 art. 2 and 4; Ley 7503/2025 art. 21 and 22; Ley 7572/2025 art. 83 and 226 to 228, 2025-06-27 official text · verified 2026-10-28

Asset	Security	Perfection	Norm
Movables, inventory, machinery	Registered pledge, fixed or open	Registro Prendario	Civil Code art. 2327
Vehicles and registrable goods	Registered pledge	Asset's own registry	Civil Code art. 2327
Real estate (bank lender)	Mortgage	Property registry, renew within 20 years	Ley 861/96 art. 93
Book entry securities	Pledge	Entry in the depository account	Ley 7503/2025 art. 21
Exchange collateral	Pledge by private instrument of certain date	Auction on the exchange	Ley 7572/2025 art. 226 to 228
Leased equipment	Lessor keeps title	Registration of the leasing contract	Ley 1295/98 art. 14

Collateral options

Worked example

A foreign lender financing a Paraguayan agro processor with US$3 million (about PYG 17,604,930,000): it takes a dollar mortgage over the plant, registered for US$3 million (Ley 434/94 art. 2), an open pledge over inventory with a stated maximum (Civil Code art. 2294 and 2335) and a pledge over the shares if held in book entry form (Ley 7503/2025 art. 21). The special enforcement and 20 year term rules of Ley 861/96 art. 93 and 94 apply only if the lender is a Paraguayan financial entity, so foreign lenders often lend through or alongside a local bank.

Step by step

1. Identify each asset class and its registry (property, vehicles, Registro Prendario, depository).
2. Draft the pledge in a public or private instrument of certain date, stating the amount or the maximum amount and describing the goods in detail.
3. Register before funding; for bond issues, show registration to the Superintendencia before placement.
4. Keep a diary for re registration of bank security within 20 years.
5. On default, use executive proceedings and, for exchange collateral, the exchange auction.

Common traps

No unified movable collateral law has been enacted; registration and priority still follow the Civil Code pledge articles as reworded in 2006.
An open pledge secures only up to its stated maximum; set the cap with interest and costs in mind (Civil Code art. 2299).
Goods attached to mortgaged land cannot be pledged without the mortgagee's express written acceptance (Civil Code art. 2330).
The faster enforcement rules of Ley 861/96 art. 94 are for financial entities only.

Sources

← Interest rates, usury and credit cards in Paraguay: freely agreed rates, the 30 percent usury margin, default and penalty interest, card caps and foreign currency loansLeasing and trusts in Paraguay: financial and operating leasing, leasing companies, negocios fiduciarios and their special tax treatment →

Get rule changes weekly

Free. One email a week from The LatAm Thread.

One more step after you press the button: we take you to Substack, where your email is already filled in. Confirm there to start. No spam, unsubscribe anytime, we never share your address. By subscribing you agree to the privacy policy.