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Investing in Paraguay: the foreign investment regime and the main incentive laws

Argentina. For full detail on Argentina, go to The Argentine Thread.

Last verified: 2026-10-27 · Status: Changing

Paraguay has no foreign investment screening: Ley 117/91 gives foreign investors national treatment, needs no prior authorization and guarantees free movement of capital, dividends, interest and royalties. On top of that sit opt in regimes: the new capital goods incentive law (Ley 7548/2025, regulated in January 2026) that replaced Ley 60/90, income tax rate stability contracts of up to 10, 15 or 20 years under Ley 5542/2015, maquila at a 1 percent single tax and free zones at 0.5 percent of export revenue. The biggest new prize is a 10 year exemption from the 15 percent dividend tax for projects of at least US$13 million, with strict conditions on asset use, reporting and non resident eligibility.

USD figures use PYG 5,847.90 per US dollar, the Banco Central del Paraguay reference quotation for 27 October 2026, retrieved on the verification date. Conversions are for orientation only.

Key facts

Prior authorization or registration for foreign investment	Not required beyond general legal registrations Ley 117/91 art. 4, as of 2026-10-27 · in force
Remittance of dividends abroad	Free, no FX restrictions; taxes apply Ley 117/91 art. 6, as of 2026-10-27 · in force
Minimum project investment for the 10 year dividend tax exemption	13000000 USDLey 7548/2025 art. 4 e, as of 2026-10-27 · in force
Length of the dividend tax (IDU) exemption	10 yearsLey 7548/2025 art. 4 e, as of 2026-10-27 · in force
Minimum investment for INR exemption on foreign loan interest	13000000 USDLey 7548/2025 art. 4 d, as of 2026-10-27 · in force
Minimum investment for duty and IVA exemption on large tourism and entertainment projects	20000000 USDLey 7548/2025 art. 4 f, as of 2026-10-27 · in force
Maximum time for the Investment Council opinion	60 calendar daysLey 7548/2025 art. 13, as of 2026-10-27 · in force
Minimum holding period for incentivised capital goods	5 yearsLey 7548/2025 art. 16, as of 2026-10-27 · in force
Executed investment below which benefits are revoked	50 %Ley 7548/2025 art. 25, as of 2026-10-27 · in force
Maximum income tax rate stability term (industrial projects of US$100 million or more)	20 yearsLey 5542/2015 art. 12, as of 2026-10-27 · in force
Standard income tax rate stability term	10 yearsLey 5542/2015 art. 5, as of 2026-10-27 · in force
Maquila single tax	1 %Ley 7547/2025 art. 37, as of 2026-10-27 · in force
Free zone single tax on export revenue	0.5 %Ley 523/95 art. 14, as of 2026-10-27 · in force
Border security zone where neighbouring country nationals cannot own rural land	50 kmLey 2532/2005 art. 1 and 2, as of 2026-10-27 · in force
Corporate income tax (IRE)	10 %Ley 6380/2019 art. 21, as of 2026-10-27 · in force
Dividend tax (IDU) for non resident recipients	15 %Ley 6380/2019 art. 43, as of 2026-10-27 · in force
IVA general rate	10 %Ley 6380/2019 art. 90, as of 2026-10-27 · in force
BCP reference rate	5847.90 PYG per USDBCP reference quotation, as of 2026-10-27 · in force

The rule

1. National treatment and no screening. The foreign investor and the companies it holds have the same guarantees, rights and obligations that laws and regulations give national investors, with no limits other than those set by law. Private investment needs no prior authorization and no registration beyond those the law already requires. Property rights are guaranteed, investors may buy investment insurance in Paraguay or abroad, prices are free except where a law regulates them, and the State does not guarantee private credit contracts. Domestic and foreign investors are subject to the same tax regime and must comply with labor and social security law. Investors and State entities contracting with foreign investors may agree to submit disputes to national or international arbitral tribunals. Joint ventures (riesgo compartido) are recognised but have no legal personality, and a foreign party must set up a domicile in Paraguay.
Cost to do it: No admission filing, approval or fee for foreign investment: PYG 0 (US$0). Normal company formation and tax registration costs still apply.Ley Nº 117/91 De Inversiones, Art. 1, 2, 4, 5, 7, 8, 9, 10, 11, 13, 14 to 17, 1992-01-07 official text · verified 2026-10-27

2. Free exchange and repatriation. A free exchange regime is guaranteed with no restrictions on the entry and exit of capital or on remitting dividends, interest, commissions, technology royalties and other items abroad. All exchange operations, remittances and transfers remain subject to the taxes set by law, so the guarantee covers access to foreign currency, not tax relief.
Example: A subsidiary with PYG 5,263,110,000 of after tax profit can remit it abroad without any FX permit; the 15 percent dividend tax for non residents (PYG 789,466,500) is withheld, leaving PYG 4,473,643,500. / US$900,000 of after tax profit becomes US$765,000 net abroad after the 15 percent IDU.Ley Nº 117/91 De Inversiones, Art. 6, 1992-01-07 official text · verified 2026-10-27

3. New capital goods incentive regime. Domestic and foreign legal entities and sole proprietorships legally set up in Paraguay may apply. Approved projects can receive: (a) exemption from import customs duty on capital goods, or on raw materials and inputs to manufacture capital goods, for direct use in the industrial, agricultural or services production cycle (service fees still apply); (b) IVA exemption on imports of capital goods and local purchases from national manufacturers, on the terms of Ley 6380 art. 100; (c) IVA exemption on the first sale of those capital goods between beneficiaries; (d) exemption from non resident income tax (INR) on interest, commissions and charges paid to established foreign banks and lenders financing the project, for the life of the loan, if the investment is at least US$13,000,000; (e) exemption from the dividend tax (IDU) for ten years from the first dividends, profits or returns of the project, if the investment is at least US$13,000,000, applied only to profits from the approved investment (pro rata where it expands an existing production chain); and (f) exemption from customs duty and IVA on imported capital goods for large tourism and entertainment projects of at least US$20,000,000. Amounts from different projects cannot be added together to reach US$13,000,000. For non resident investors the IDU exemption applies only if the investment does not come from a low or no tax territory, or if the dividend tax is not creditable for the investor in its home country. The Executive may update the dollar thresholds each year by decree in line with the Central Bank CPI.
Cost to do it: Neither Ley 7548/2025 nor Decreto 5432/2026 sets an application fee. Projects above US$13,000,000 (PYG 76,022,700,000) must be prepared by national technicians or consulting firms registered in the REPSE, a professional cost the rules do not fix.
Example: Project of US$15,000,000 with annual pre tax profit of PYG 5,847,900,000: IRE at 10 percent is PYG 584,790,000; without the incentive, IDU at 15 percent on the PYG 5,263,110,000 paid out to a non resident parent is PYG 789,466,500; with the ten year IDU exemption the parent receives PYG 5,263,110,000. A capital good bought from a registered national manufacturer for PYG 5,847,900,000 saves PYG 584,790,000 of IVA at the 10 percent general rate. / Per US$1,000,000 of pre tax profit: US$765,000 net to the foreign parent without the IDU exemption and US$900,000 with it, a saving of US$135,000 a year for up to ten years. On a US$1,000,000 locally made machine the IVA saving is US$100,000.Ley Nº 7548/2025 Que establece el nuevo régimen de incentivos fiscales para la inversión nacional y extranjera, Art. 3, 4 and 32, 2025-09-08 official text · verified 2026-10-27 · changed: Ley 7548/2025, promulgated and published on 8 September 2025 and in force from that date, repealed Decreto Ley 27/1990 and Ley 60/90 (art. 34 and 37) and added the US$13,000,000 thresholds for the INR and IDU exemptions, tourism and entertainment projects, transfers of assets and pre operating benefits between beneficiaries, and a 20 year renewal window. Decreto 5432/2026 of 29 January 2026 regulates it.

4. Approval process and deadlines. The Consejo de Inversiones (chaired by the Ministry of Industry and Commerce, with the Ministry of Economy and Finance, Agriculture, Labor, the Central Bank, DNIT and two private sector seats) reviews each project and must issue its opinion within 60 calendar days of filing; the Ministers of Industry and Commerce and of Economy and Finance then grant or deny the benefits by joint (biministerial) resolution within 15 days of the opinion, stating the date from which benefits apply. The project must include a technical sheet, location, an environmental impact declaration issued by the competent authority (a mandatory prior condition), investment amounts and financing sources split between national and foreign funds, and an investment and execution schedule. Capital goods imported or bought more than six months before the application are not admitted, and goods older than five years from manufacture or refurbished need a certificate from a recognised certification body. Imports and local purchases must happen within the approved schedule, extendable once by up to one year. Renewals for new activities, expansions or modernisation can be requested within 20 years of the first grant.
Cost to do it: Statutory decision time: up to 60 calendar days plus 15 days, about 75 days in total, with the clock suspended while requirements are missing.Ley Nº 7548/2025, Art. 5, 8, 9, 11, 12, 13, 14 and 28, 2025-09-08 official text · verified 2026-10-27

5. Regulation of the incentive regime. Applicants must be registered in the MIC Registro Industrial (Decreto 6258/2011) or the Registro de Empresas Prestadoras de Servicios Especializados, REPSE (Decreto 6866/2011), before operating, and projects above US$13,000,000 must be prepared by consultants registered in the REPSE. Documents must be in Spanish or come with a translation by a registered public translator, and money amounts must be stated in guaraníes or their equivalent with the exchange rate used. Direct permanent jobs are a main criterion for new activities: the reference is the average number of jobs per US$50,000 of investment approved in the previous fiscal year, published yearly by the Council's Executive Secretariat; projects below it must show a significant, quantified contribution to the law's other goals. Land and civil works bought up to 24 months before the application, intangibles up to 36 months before and technology goods up to 6 months before may count as investment. Imports may vary up to 20 percent from the approved values; above that, taxes are due on the excess. Projects are denied if they do not fit State development policy, lack a reasonable investment to job ratio, use public or energy resources disproportionately, or carry incompatible social, environmental or health risks. If the authority does not answer within the deadlines, the application is deemed tacitly denied under art. 52 of Ley 6715/21. Beneficiaries report investments and jobs online within 10 days of each period: every six months for schedules longer than one year, quarterly otherwise.
Cost to do it: Registered translator and consultant fees are market priced and not fixed by the decree.Decreto Nº 5432/2026 por el cual se reglamenta la Ley Nº 7548/2025, Art. 3, 5, 13, 14, 15 and 23, 2026-01-29 official text · verified 2026-10-27

6. Keeping the benefits. Capital goods acquired with benefits must stay owned by the beneficiary for at least five years from the import clearance or local purchase; an earlier transfer requires paying all exempted taxes, and a later one a proportional share based on remaining useful life, except approved transfers between beneficiaries. Goods may be used only for the approved project. Benefits are revoked in whole or in part (unless there is proven force majeure) if goods are sold in breach of these rules, if less than 50 percent of the projected investment has been made when the schedule ends, if goods are used for other purposes, if corrective measures are ignored, or if the investment is made at an undeclared location and the papers are not filed within 30 days. Revocation means repaying the exempted taxes with interest, surcharges and fines, and the debt is a specially privileged credit. Beneficiaries may pledge the incentivised capital goods into a guarantee trust with the State as a co beneficiary creditor. Projects approved under Ley 60/90 keep the rules of their original resolution, but renewals, complements and transfers follow the new law.
Example: A beneficiary that projected PYG 87,718,500,000 of investment but has executed only PYG 40,000,000,000 when the schedule ends (under 50 percent) faces revocation and repayment of the duties and IVA it saved, plus interest, surcharges and fines. / Projected US$15,000,000, executed about US$6,840,000 (45.6 percent): below the 50 percent floor.Ley Nº 7548/2025, Art. 16, 17, 19, 25, 26, 29 and 35, 2025-09-08 official text · verified 2026-10-27

7. Investment guarantee and tax stability contracts. Domestic and foreign individuals and companies investing in industries or other productive activities that create jobs and add value may sign an investment contract with the State by public deed, after forming a sociedad anónima (S.A.) for the project. Capital must be fully paid in within the contract term: up to five years for investments above US$5,000,000 and two years below that. The company may transfer capital abroad two years after start up and profits at any time, at the best exchange rate it can obtain from any entity authorised by the Central Bank, subject to anti money laundering rules. Its income tax rate is frozen at the rate in force when the contract is signed for up to ten years from start up, extendable up to fifteen years for investments from US$50,000,000 to under US$100,000,000 and up to twenty years for industrial projects of US$100,000,000 or more. Covered investments cannot be subject to any form of appropriation or confiscation, discriminatory rules can be challenged within one year (the authority must answer within 60 days, then the courts), benefits pass to a buyer of the company for the remaining term, annual financial statements must be externally audited, and disputes go to national courts unless the contract provides for arbitration.
Cost to do it: Requires a dedicated S.A., a contract by public deed and a yearly external audit; the law sets no fee.
Example: A company signing in 2026 locks the current 10 percent IRE rate (Ley 6380 art. 21): on PYG 5,847,900,000 of yearly profit the tax stays PYG 584,790,000 even if the general rate later rises. / US$100,000 of IRE per US$1,000,000 of profit, fixed for up to 10 years (15 or 20 years for US$50 million or US$100 million projects).Ley Nº 5542/2015 De garantías para las inversiones y fomento a la generación de empleo y el desarrollo económico y social, Art. 2, 4, 5, 10 to 12, 14, 15, 23 and 24, 2015-12-11 official text · verified 2026-10-27

8. Maquila. Companies processing, assembling or repairing temporarily imported goods, or providing services used abroad, under a contract with a company domiciled abroad pay a single maquila tax of 1 percent on the value added in Paraguay or the export invoice value, whichever is higher (also 1 percent for submaquila), and their maquila income is subject exclusively to that tax. Maquilas of goods and services can recover export IVA credits, capped for service maquilas at 0.5 percent of the value added or invoice. Pure maquilas may sell up to 10 percent of the prior year's exported volume in the local market after paying import and internal taxes.
Cost to do it: 1 percent of the higher of national value added or export invoice value.
Example: Export invoice PYG 11,695,800,000 and national value added PYG 3,508,740,000: single tax PYG 116,958,000. / US$2,000,000 invoice and US$600,000 value added: tax US$20,000.Ley Nº 7547/2025 Del régimen de maquila, Art. 1, 18, 37, 38 and 39, 2025-09-08 official text · verified 2026-10-27

9. Free zones. Users in authorised free zones that export only to third countries pay a single Impuesto de Zona Franca of 0.5 percent of gross revenue from those exports, settled at each export clearance, and are otherwise exempt from national, departmental and municipal taxes, including on formation, dividends remitted to third countries and royalties, interest and service fees paid abroad. Later tax law changes do not apply to users unless they opt in. Sales into the Paraguayan customs territory of up to 10 percent of gross sales keep the free zone tax; above that, income tax applies on the domestic share (with a 70 percent rate reduction for industrial and service users).
Cost to do it: 0.5 percent of gross export revenue to third countries.
Example: Exports of PYG 29,239,500,000: free zone tax PYG 146,197,500. / US$5,000,000 of exports: US$25,000.Ley Nº 523/95 que autoriza y establece el régimen de zonas francas, Art. 13, 14, 15, 16 and 17, 1995-01-16 official text · verified 2026-10-27

10. Border security zone. A 50 kilometre strip along land and river borders is a border security zone. Unless authorised by Executive decree on public interest grounds (such as job creation in the zone), nationals of neighbouring countries, Argentines and Brazilians included, and legal entities mostly owned by them may not own, co own or hold usufruct over rural land in that strip. Rights acquired before the law are preserved.
Cost to do it: A presidential decree is the only route for a covered buyer; no fee is set in the law.Ley Nº 2532/2005 que establece la zona de seguridad fronteriza, Art. 1, 2 and 3, 2005-02-17 official text · verified 2026-10-27

11. Tax baseline and treaties. Absent incentives, the corporate income tax (IRE) is 10 percent of net income, the dividend tax (IDU) is 15 percent when the recipient is a non resident, including profits of a foreign head office (8 percent for residents), and the general IVA rate is 10 percent. The DNIT list of conventions shows comprehensive income tax treaties with Chile, the Republic of China (Taiwan), the United Arab Emirates, Uruguay and Qatar; Argentina is not among the comprehensive income tax treaty partners, so investment routed from or to Argentina relies on domestic rules (see The Argentine Thread guide for the Argentine side).
Example: PYG 5,847,900,000 pre tax profit: IRE PYG 584,790,000, IDU PYG 789,466,500, net PYG 4,473,643,500 (combined 23.5 percent). / US$1,000,000 pre tax profit: US$765,000 net to a foreign parent.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional; DNIT list of international conventions, Ley 6380 art. 21, 43 and 90, 2019-09-25 official text · verified 2026-10-27

Regime	Law	Who it suits	Main tax effect	Key condition
General regime	Ley 117/91	Any investor	National treatment, free FX, IRE 10 percent, IDU 15 percent to non residents	No approval needed
Capital goods incentives	Ley 7548/2025, Decreto 5432/2026	Industrial, agricultural and service projects buying capital goods	Duty and IVA exemption on capital goods; 10 year IDU and loan interest INR exemption from US$13 million	Biministerial resolution, 5 year asset holding, 50 percent execution floor
Investment guarantee contract	Ley 5542/2015	Large job creating, value adding projects	IRE rate frozen 10 years, up to 15 or 20 years for US$50 million or US$100 million	Dedicated S.A., public deed contract, external audit
Maquila	Ley 7547/2025	Export processing and remote services for a foreign principal	1 percent single tax on the higher of value added or invoice	Contract with a company abroad; local sales capped at 10 percent
Free zone	Ley 523/95	Exporters to third countries	0.5 percent of export revenue, otherwise exempt	Domestic sales above 10 percent trigger income tax on that share

Paraguay investment regimes at a glance (verified 27 October 2026)

Worked example

Foreign parent building a US$15,000,000 plant (PYG 87,718,500,000) that earns US$1,000,000 (PYG 5,847,900,000) a year before tax.
General regime: IRE 10 percent PYG 584,790,000; dividend of PYG 5,263,110,000 pays IDU 15 percent PYG 789,466,500; net to parent PYG 4,473,643,500 (US$765,000).
With Ley 7548 approval: same IRE, but the IDU on profits from the approved investment is exempt for ten years, so the parent receives PYG 5,263,110,000 (US$900,000), provided the money does not come from a low or no tax territory or the IDU would not be creditable at home.
Ten year value of the IDU exemption at a constant profit: about PYG 7,894,665,000 (US$1,350,000), before any home country tax.
If the parent's home country would credit the Paraguayan IDU and the investment comes from a low tax territory, the exemption does not apply to it; model both cases.

Step by step

Pick the vehicle and regime: general regime (no filing), Ley 7548 incentives, a Ley 5542 contract (requires an S.A.), maquila or a free zone user contract. Check land location against the 50 km border zone if neighbouring country owners are involved.
Register the company with tax authority DNIT and, for incentives, in the MIC Registro Industrial or the REPSE before operations start.
Obtain the environmental impact declaration from the competent authority; it is a prior condition for Ley 7548 benefits.
Prepare the investment project (technical sheet, schedule, investment table with goods not older than six months since import or purchase, jobs, financing by origin); above US$13,000,000 it must be prepared by REPSE registered consultants. Translate foreign documents with a registered public translator.
File with the MIC; the Investment Council has 60 calendar days and the two ministers 15 more days to issue the biministerial resolution. Silence past the deadlines counts as tacit denial.
Import or buy the listed capital goods within the approved schedule (one extension of up to a year) and record them in the annual fixed asset depreciation table.
Report investment and jobs online within 10 days of each half year (or quarter for schedules of up to a year), keep the goods for five years and use them only for the project.

Common traps

Ley 60/90 no longer exists for new projects: since 8 September 2025 new applications go under Ley 7548/2025, and old Ley 60/90 projects keep their original resolution terms only.
The US$13,000,000 test applies per project; several smaller projects cannot be added together to reach it, and the IDU exemption covers only profits from the new investment (pro rata on expansions).
Non resident investors from low or no tax territories lose the IDU exemption unless the Paraguayan IDU would not be creditable at home.
Selling incentivised capital goods within five years triggers payment of all exempted taxes; afterwards a proportional amount is still due unless the buyer is another approved beneficiary.
Executing less than 50 percent of the projected investment by the end of the schedule, or moving the project to an undeclared site, leads to revocation with interest, surcharges and fines.
IVA and duty exemptions are not available where a functionally compatible national capital good is being supplied in the required quantity and quality; MIC decides on a non binding industry report.
Ley 5542/2015 still refers to the Investment Council of Ley 60/90, which Ley 7548/2025 repealed and replaced; confirm with the MIC which body processes a stability contract before relying on timelines.
Ley 117/91 guarantees free FX but not tax relief: every remittance pays the tax that applies to it, and Argentina has no comprehensive income tax treaty with Paraguay in the DNIT list.
Argentine and Brazilian individuals, and companies mostly owned by them, cannot buy rural land within 50 km of the border without a presidential decree.

Sources

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