Countries › Paraguay › Guide › 3. Investing › Restricted sectors and limits on foreign investment in Paraguay: no screening, the border zone, ANDE's power monopoly, hydrocarbons and telecom

Restricted sectors and limits on foreign investment in Paraguay: no screening, the border zone, ANDE's power monopoly, hydrocarbons and telecom

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

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

Paraguay has no foreign investment screening, no general foreign ownership caps and no prior registration: Ley 117/91 gives foreigners national treatment. The real limits are sectoral and territorial: neighbouring country nationals cannot own rural land within 50 km of the borders without a decree, public electricity supply is reserved to the State utility ANDE, hydrocarbon concessions need a law passed by Congress, and telecom concessions, licences and share changes need State approval. Foreign investors can enter each of these sectors through the routes the law provides.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026, retrieved on the verification date. Conversions are for orientation only.

Key facts

General prior approval or screening of foreign investment	None; national treatment and no prior authorization textLey 117/91 art. 2 and 4, as of 2026-10-28 · in force
General foreign ownership caps	None in the investment law; limits only where a specific law sets them textLey 117/91 art. 2, as of 2026-10-28 · in force
Border security zone where neighbouring country nationals cannot own rural land	50 kmLey 2532/2005 art. 1 and 2, as of 2026-10-28 · in force
Fine for a transaction breaching the border zone rule	2x transaction valueLey 2532/2005 art. 8, as of 2026-10-28 · in force
Public electricity supply	Exclusive to ANDE; delegation by contract approved by Congress textLey 966/1964 art. 64 and 66, as of 2026-10-28 · in force
Approval of hydrocarbon exploration and exploitation concessions	By law of Congress, after contract approved by decree textLey 779/1995 art. 13, as of 2026-10-28 · in force
Hydrocarbon exploitation concession term	20 + up to 10 yearsLey 779/1995 art. 31, as of 2026-10-28 · in force
Change of share ownership of a telecom provider	Prior CONATEL authorisation textLey 642/1995 art. 69, as of 2026-10-28 · in force
BCP reference rate	5868.31 PYG per USDBCP reference quotation, as of 2026-10-28 · in force

The rule

1. General rule: national treatment, no screening. The investment law aims to stimulate and guarantee national and foreign investment on a basis of total equality. Foreign investors and the companies in which they participate have the same guarantees, rights and obligations as national investors, with no limitations other than those set by law. Guarantees agreed with other States or international bodies apply also to equivalent national investment. Private investment needs no prior authorization or registration beyond those the law requires, the tax regime is the same for national and foreign investment, and no production, trade, export, import or financial intermediation activity may obtain protectionist privileges from the State. Foreign parties to joint ventures must set up a domicile in Paraguay.
Cost to do it: No admission or screening filing: PYG 0 (US$0).Ley Nº 117/91 De Inversiones, Art. 1, 2, 3, 4, 10, 12 and 16, 1992-01-07 official text · verified 2026-10-28

2. Border security zone. A 50 kilometre strip adjacent to the land and river borders is a border security zone. Unless authorised by Executive decree on public interest grounds, such as activities that create jobs in the zone, nationals of any neighbouring country (Argentina, Brazil and Bolivia) and legal entities mostly made up of them may not own, co own or hold usufruct over rural real estate there. Shares of companies and cooperative certificates of those seeking to own rural land in the zone must be registered and non endorsable. Notaries may not execute deeds for transactions not authorised under the law, and acts that breach it are null and carry a fine equal to twice the value of the transaction.
Example: A breaching purchase of rural land for PYG 5,868,310,000 is null and triggers a fine of PYG 11,736,620,000. / US$1,000,000 purchase: null, with a US$2,000,000 fine.Ley Nº 2532/2005 que establece la zona de seguridad fronteriza de la República del Paraguay, Art. 1, 2, 4, 5 and 8, 2005-02-17 official text · verified 2026-10-28

3. Electricity: public supply reserved to ANDE. The Administración Nacional de Electricidad (ANDE) has exclusive rights to public electricity supply and public lighting throughout the country, with a preferential right to use the hydraulic resources needed. ANDE may delegate its exclusive rights to other companies to serve towns ANDE does not serve, by contract approved with at least four board votes and subject to approval by Congress (ad referendum). Private generation for sale outside public supply follows the independent power and renewables laws covered on the sectors page.Ley Nº 966/1964 que crea la ANDE y establece su Carta Orgánica, Art. 64, 65 and 66, 1964-08-12 official text · verified 2026-10-28

4. Hydrocarbons: State domain, concessions by law. Solid, liquid and gaseous hydrocarbon deposits in their natural state are State property and inalienable. The State may grant prospecting, exploration and exploitation for a limited time, directly or to national or foreign, private or public persons. Applicants must set up a domicile in Paraguay with a resident legal representative, prove financial and technical solvency, post a performance guarantee and present a minimum activity and investment plan. An exploration and exploitation concession over a given area is granted by law, after a contract approved by Executive decree; the prospecting and concession contracts are submitted together for authorisation by Congress. Exploitation concessions last 20 years from the Congressional authorisation (or from entry into that phase), extendable by up to 10 years.Ley Nº 779/1995 que modifica la Ley Nº 675 de Hidrocarburos, Art. 1, 3, 4, 13 and 31, 1995-11-20 official text · verified 2026-10-28

5. Telecommunications: concessions, licences and State reserved services. A concession, the act by which the State grants a person the right to provide a public service for a fixed term, is perfected by a written contract approved by Congress; licences (for services not needing a concession) and authorisations are granted by CONATEL. These rights cannot be transferred without CONATEL's prior authorisation, and any change in ownership of the registered shares of a telecom service provider also needs prior authorisation. Certain services are reserved to the State (radio aids to meteorology and to air, river and maritime navigation, aerospace navigation, radio astronomy, distress and safety services, road assistance and services affecting human safety or declared by the Executive), though they may be concessioned temporarily. Alternative community broadcasting may only be provided by non profit organisations formed in Paraguay that are not subsidiaries or affiliates of national or foreign companies.
Cost to do it: Concessions, licences and authorisations are subject to a fee (derecho) payable within 60 days of grant or renewal under art. 70 as amended by Ley 4179/2011; amounts are set by CONATEL.Ley Nº 642/1995 De Telecomunicaciones, Art. 59, 60, 62, 63, 65, 66 and 69, 1995-12-29 official text · verified 2026-10-28

6. Public infrastructure through PPPs. Sectors traditionally run by the State, such as roads, airports, waterways, railways, water and sanitation, electricity, pipelines, cement, hydrocarbon refining and telecom, are open to private investment through public private partnership contracts. Private partners must be private legal entities, national or foreign; public companies and companies with State shareholding cannot act as private partners.Ley Nº 7452/2025, Art. 16 and 51, 2025-01-27 official text · verified 2026-10-28

Area	Limit	Route in for a foreign investor	Law
Any sector	None by default; national treatment	No filing	Ley 117/91
Rural land within 50 km of a border	Neighbouring country nationals and companies mostly owned by them barred	Executive decree on public interest grounds; other foreigners unaffected	Ley 2532/2005
Public electricity supply	Exclusive to ANDE	Delegation contract approved by Congress; independent generation laws; PPPs	Ley 966/1964; Ley 7452/2025
Oil and gas	State domain	Prospecting permit and concession approved by Congress	Ley 779/1995
Telecom	Concessions by Congress, licences by CONATEL, State reserved services	CONATEL licence; prior approval for share changes	Ley 642/1995
Public infrastructure	State owned	PPP contract through a Paraguayan S.A.	Ley 7452/2025

Where the limits are (verified 28 October 2026)

Worked example

An Argentine agribusiness group wants to buy 2,000 hectares of farmland 30 km from the Paraná river border. Because its owners are Argentine, a Paraguayan company it controls cannot take title without an Executive decree based on public interest, such as local job creation.
A US or Spanish investor buying the same land faces no such bar, and neither does a company not mostly owned by neighbouring country nationals.
If the Argentine group went ahead without a decree at a price of PYG 23,473,240,000 (US$4,000,000), the deed would be null and the fine would be PYG 46,946,480,000 (US$8,000,000).

Step by step

Map the project against the sector regimes: land location (border zone), electricity, hydrocarbons, mining, telecom and any licensed activity.
Where neighbouring country nationals hold most of the buyer, obtain a Servicio Nacional de Catastro certificate showing whether the land lies in the border zone and, if so, apply for the Executive decree before signing.
For telecom, apply to CONATEL for the licence and for prior approval of any share change; for concessions, plan for Congressional approval in the timetable.
For electricity and infrastructure, use the independent generation laws or the PPP law rather than trying to supply the public grid directly.

Common traps

The border zone rule targets nationality of the owners, not residence: an Argentine, Brazilian or Bolivian national living in Paraguay is still covered.
Notaries must refuse deeds that breach the border zone rule, and Catastro certificates must state whether the land lies in the zone; a nullity also brings a fine of twice the price.
Holding companies do not avoid the rule: legal entities made up mostly of neighbouring country nationals are covered and their shares must be registered.
Congressional approval for hydrocarbon and telecom concessions adds political timing risk that a pure administrative process would not.
Changing the owners of a telecom licensee without CONATEL's prior approval risks automatic loss of the licence.
For the Argentine side of cross border land, energy or FX questions, see The Argentine Thread guide.

Sources

← Acquiring a Paraguayan company: merger control, share transfer reporting, the 15 percent INR on share sales, employees and licencesChoosing a legal entity in Paraguay: EAS, S.A. or S.R.L., with registry, capital, beneficial ownership and transparency rules →

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.