Perhaps you've heard whispers, or maybe Paraguay wasn't even on your investment radar. For years, this nation in the heart of South America has quietly advanced, building a robust economy and an investment-friendly environment that many have overlooked. But well-kept secrets don't last forever, and Paraguay is rapidly emerging as a destination of significant opportunities for you, the astute investor looking to go beyond traditional hotspots. As your guide in this discovery, I will reveal why this country is not just a hidden gem, but a budding powerhouse ready to boost your portfolio. The time to pay attention is now, before the secret is fully out and the unique advantages of being an early mover begin to transform. Paraguay's narrative is changing; from being "historically ignored" , it is now capturing international attention with "$10 billion in foreign investment in 2024 alone" and a "130% increase" in new company entries in early 2024. The recent achievement of investment grade rating by Moody's is a clear signal: the window to be a true pioneer is closing.
Unveiling Paraguay's Economic Strength and Pro-Investment Climate
The first layer of this "secret" we must uncover is Paraguay's surprising and solid economic foundation. We are not talking about a fleeting boom, but sustained growth and macroeconomic stability that set it apart in the region. Over the last decade, Paraguay has averaged an annual GDP growth of nearly 4% , a consistent figure recognized by institutions like the Getulio Vargas Foundation, the Inter-American Development Bank (IDB), and the Development Bank of Latin America (CAF). For the years 2025-2027, the World Bank projects continued healthy growth, around 3.6%. This trajectory is complemented by a remarkably stable currency, especially when compared to the volatility sometimes experienced by its larger neighbors , and inflation that has been kept under control. These are not just numbers; they are a testament to prudent economic management and solid fundamentals that offer you firm ground for your investments.
What truly anchors this economic strength is a legacy of pro-investment policies that demonstrate admirable continuity. Imagine an environment where, regardless of political changes, support for foreign investment remains unwavering. This predictability is pure gold for long-term planning and risk mitigation. This commitment materializes in robust legal tools designed to incentivize industrial development and attract capital. Law 60/90, enacted in 1990, and the Maquila Law, operational since 2000, are fundamental pillars of this framework. These laws are not mere documents; they are the legal basis supporting promising investment opportunities, especially in manufacturing and export-oriented sectors. The consistency in the pro-investment stance, beyond political cycles, is perhaps Paraguay's most potent and often underestimated competitive advantage. In a region where economic and political turmoil can be the norm, this predictability translates directly into lower risk and a greater ability for you, as an investor, to chart long-term strategies with confidence.
This favorable climate has not gone unnoticed by the international community. The BB+ rating otorgada by Fitch Ratings , positive assessments from the International Monetary Fund (IMF) and the World Bank are important. But the most significant milestone came with obtaining, for the first time in its history, an investment grade rating from Moody's. This progression, from recognition by development banks to an investment grade rating from a world-renowned agency, is not a series of isolated events. It is a narrative of growing international confidence that can unlock access to cheaper capital and attract a broader and more institutional class of investors. For you, considering an investment, this could mean future asset appreciation as more global capital sets its sights on Paraguay. Furthermore, the country has worked to facilitate business operations, offering a welcoming environment for foreign investors, with equal treatment and simplified processes for company registration.
Tangible Advantages: Deciphering Paraguay's Unbeatable Tax Incentives
Now, let's delve into one of the most direct and compelling attractions for you: the Paraguayan tax system. This is where the "secret" becomes particularly lucrative. Paraguay has implemented a tax model popularly known as "10-10-10," which refers to its 10% corporate tax, a 10% personal income tax, and a 10% value-added tax (VAT). This structure is not only notable for its low rates – in fact, it positions Paraguay as the country with the lowest tax rates in South America – but also for its simplicity. For you, as an investor, this simplicity translates into lower compliance costs, less bureaucracy, and a clearer understanding of your tax obligations. This frees up resources and mental energy that you can dedicate to growing your business, a welcome contrast to the often complex and opaque tax systems of other jurisdictions. Added to this is a crucial benefit: Paraguay applies a territorial taxation system, which means a 0% rate on income generated outside the country. This is a massive advantage for international entrepreneurs and those with income from global sources.
For export-oriented companies, the Maquila Regime is your passport to global competitiveness. This program allows companies to import raw materials and machinery tax-free for processing in Paraguay, provided that the finished products are re-exported. In return, a single tax of just 1% is applied to the value added in Paraguay or the value of the monthly export, whichever is greater. This is not just a tax exemption; it is a strategic tool that allows you to access world markets with a highly efficient cost structure, generating employment and increasing the country's export base.
Law 60/90 - Promotion of Investments
In parallel, Law 60/90 on Investment Promotion is designed to maximize your profits. This law offers broad tax exemptions for foreign investment projects, covering the import of capital goods, the reinvestment of profits, and even dividends distributed abroad. It is important to note that Law 60/90 and the Maquila Regime do not operate in silos; they function as interconnected gears. You can use Law 60/90 to significantly reduce capital costs when establishing your operations (e.g., by importing machinery tax-free) and then operate under the Maquila Regime for export-oriented production with a minimal tax burden. This synergy creates a powerful engine for industrialization and export diversification, offering you a complete package for your manufacturing investments. To add even more security to your planning, Law No. 5542/15 guarantees fiscal stability, allowing investors to secure a fixed tax rate for a period of 10 years, extendable up to 20 years. And we cannot forget the Free Trade Zones, which offer a single tax of 0.5% on the export value , and the crucial freedom for capital repatriation , ensuring that your profits can flow without restrictions.
To quickly visualize these benefits, consider the following table:
Paraguay: A Glimpse at Your Key Tax Advantages
Tax Incentive | Key Description | Main Benefit for You |
"10-10-10" Model | Low and simple taxes (10% corporate, 10% personal income, 10% VAT) | Lower tax burden, higher net profitability. |
Maquila Regime | Single 1% tax on value added/export; VAT/duty exemption on inputs | Ultra-competitive production costs for export. |
Law 60/90 | Exemptions on capital goods, dividends, municipal fees for investment projects | Significant reduction in initial and operational costs. |
Fiscal Stability (Law 5542/15) | Guaranteed fixed tax rate for 10-20 years | Predictability and security for your long-term planning. |
Territorial Taxation | 0% tax on foreign-sourced income | Ideal for global income and international holdings. Exportar a Hojas de cálculo |
This combination of low tax burden, simplicity, and special regimes creates an exceptionally attractive fiscal environment that allows you to optimize your returns and compete effectively globally.
Fertile Ground for Growth: Discover Paraguay's Booming Investment Sectors
Beyond macroeconomic stability and attractive tax incentives, Paraguay offers you fertile ground with multiple booming sectors, each with considerable potential for your investment portfolio.
Agribusiness: The Traditional Powerhouse with an Eye on the Future.
The agro-industrial sector is, and has long been, the backbone of the Paraguayan economy. The country is a global exporter of key raw materials like soybeans and beef , benefiting from vast expanses of fertile land and competitive production costs. Meat production, especially beef, continues to expand both in volume and international reach. But the potential doesn't stop at commodities. There is a significant and growing opportunity in adding value to these raw materials within the country. Think of food processing, biofuel production, or the development of more elaborated meat products. Recent and proposed investments in sectors like banana and dairy production (with projects to increase dairy productivity by 40% per cow and develop products like powdered milk and cheese), as well as aquaculture (with projected investments of USD 50 million for feed plants and cultivation tanks) , signal this evolution. This move towards agro-industrialization not only leverages existing strengths but also creates higher-margin products and more skilled jobs, a ripe area for your strategic investment.
Manufacturing & Light Industry: The Success of "Made in Paraguay."
Paraguay has demonstrated its ability to become a key player in global supply chains, and the most outstanding example is the automotive wiring industry. The country hosts six of the eight largest wire harness manufacturers, employing over 15,000 workers and exporting to major automotive brands like Volkswagen, Hyundai, Kia, and Toyota, even for vehicles assembled in the U.S. It is noteworthy that even cutting-edge manufacturers like Tesla continue to use handmade wire harnesses, underscoring the durability and relevance of this sector. This success, largely driven by the Maquila Regime, is being replicated in other light industries, including textiles, plastics, and, as mentioned, food processing. The country's manufacturing output has shown consistent growth, reaching USD 8.35 billion in 2023.
Renewable Energies: The Green Giant Awakens.
Here lies one of the most powerful synergies for Paraguay's future. The country boasts vast hydroelectric resources , and aims to reach 60% renewable energy in its total consumption by 2030. But the vision goes further: Paraguay is positioning itself to be a leader in the emerging green hydrogen economy. The ability to generate clean, low-cost energy is not only attractive to investors with an ESG (Environmental, Social, and Governance) focus but also represents a fundamental competitive advantage for the development of its manufacturing and agricultural processing sectors. Imagine energy-intensive industries operating with reduced costs thanks to local renewable sources. This creates a virtuous cycle of sustainable growth.
Real Estate: A Market in Full Effervescence.
The Paraguayan real estate sector, especially in its capital, Asunción, is experiencing a notable boom, considered one of the "three stars" of the region along with Bogotá and Santa Cruz de la Sierra. Investors are seeing attractive returns, with capital gains ranging between 15% and 20%, and rental yields of 7% to 8% in dollars. This dynamism is driven by a growing middle class with greater purchasing power and access to mortgage loans (with average rates of 7.9% in Guaraníes over 20 years), as well as by increasing interest from foreign investors. Furthermore, the SUACE program (Unified System for Business Start-ups and Closures) offers the possibility of obtaining direct permanent residency with a minimum investment of USD 70,000 maintained for 10 years, with real estate investment being a popular option under this scheme.
Logistics & Infrastructure: Connecting Opportunities.
For a landlocked country like Paraguay, investment in logistics and infrastructure is not just important, it's transformative. Significant investments are being made in improving waterways and roads (with over USD 400 million recently allocated to new roads ), and the development of strategic corridors like the Bioceanic Corridor, which will connect the Atlantic and Pacific oceans through the Paraguayan Chaco, is set to be a game-changer. These infrastructure improvements are a force multiplier for all export-oriented sectors, reducing logistical costs and improving market access. This means your investments in manufacturing or agribusiness inherently become more competitive and profitable as the country's infrastructure matures.
Technology & Startups: The New Horizon.
Although not traditionally the first sector that comes to mind when thinking of Paraguay, an ecosystem of technology and startups is emerging. The flow of capital towards these ventures, evidenced by the creation of PARCAPY (Paraguayan Association of Private and Seed Capital) , indicates economic diversification beyond traditional pillars and a bet on innovation.
It is true that, as in any emerging market, there are areas for improvement, such as continuous institutional strengthening, a point that has been noted. However, governmental efforts, such as those driven through REDIEX (Paraguay's Investment and Export Network) , to attract and facilitate investment, are positive steps in the right direction, mitigating these risks and reinforcing confidence.
Paraguay is Calling You: Are You Ready to Be Part of the Story?
You have journeyed with us through the landscape of a country that uniquely combines stability, enviable economic growth, firm pro-investment policies, and a range of tax incentives difficult to match in the region and the world. Paraguay, the heart of South America, has proven to be much more than a secret; it is a tangible promise of opportunities for you, the visionary investor.
The combination of a solid economic base, a legal framework designed to protect and foster your capital, and dynamic sectors ranging from the fertile land of its agribusiness to the forefront of renewable energies and technology, configures a scenario where the growth potential is immense. Paraguay's "secret," as we have seen, is beginning to be revealed to the world, with international recognition and a growing flow of investment validating its trajectory. This means that the time to explore and position yourself is now, while the window of opportunity to be an early player is still open.
As your guide in this investment landscape, we have presented you with the facts, figures, and reasons. We have unveiled the layers of this destination that, until recently, operated with a low profile but with an iron determination.
With an economy in full takeoff, unparalleled tax incentives, and a range of sectors ready for investment, are you prepared to explore how the heart of South America can propel your portfolio towards new horizons of success?