INVESTMENT BENEFITS, REGIMES AND GUARANTEES
In the investment in this country, we find different benefits, internal regimes and guarantees that offer certain ease and security in investing in projects in Paraguay.
- BENEFITS AND EXONERATIONS
- Equality for investors
Law No. 117/91 on Investments stimulates and guarantees national and foreign investment without distinctions, ensuring equality, freedom of exchange, property rights and free contracting of investment insurance, both national and international.
- Tax Incentive Regime for the Investment of Domestic and Foreign Capital
Law No. 60/90 promotes investment and increases capital investment by granting tax benefits to those who invest in accordance with Paraguayan economic and social policy.
Those who want to invest under any of the following forms are benefited:
- In money, financing, supplier credits or other financial instruments.
- In capital goods, raw materials and inputs for local industry.
- Trademarks, designs, industrial models and processes and other licensable technologies.
- Specialized technical assistance services
- Leasing of capital goods
The exonerations are:
- Fiscal and municipal taxes levied on the incorporation, registration and registration of companies and enterprises.
- Customs duties, external taxes on the import of capital goods, raw materials and inputs destined to the local industry, foreseen in the project for investment.
- Exemption in the requirement of bank reserves or deposits for imports of capital goods.
- Exemption from the payment of taxes levied on remittances and payments abroad for interest, commissions and capital if the foreign investment and activity benefited is less than USD 5,000,000 (approx. 4,800,000 euros), provided that the borrower is a bank or financial institution or other credit institution of recognized trajectory in the financial market or credit organizations, located abroad.
- Taxes levied on dividends and profits from investment projects approved for up to ten years, counted from the beginning of the project when the investment is at least USD 5,000,000 and the tax on such dividends and profits is not a tax credit in the country from which it comes to invest or does not come from a territory of low or no taxation.
- Free Trade Zone Regime
Law No. 523/1995 establishes the free zone regime. Commercial, industrial and service activities are allowed, free of customs duties and fiscal taxes. They can benefit from Law Nº 60/90 for the investment of national and foreign capital.
They are exempted from all taxes for the import of capital goods destined to infrastructure in Free Trade Zone; VAT for services rendered to users; all taxes for port facilities that could be provided to users.
- Maquila Regime
Through Law No. 1064/9, investors may bring goods, products or services into the country to be assembled, repaired, improved, worked or processed for export, once the added value has been incorporated.
Foreign companies wishing to carry out maquila programs may form a national commercial company. There are no restrictions or limitations on participation, except for land-use planning programs or environmental regulations.
The maquiladoras act as Protection Cost Centers, and a special tax treatment is applied: 1% rate on the value added in national territory on the value of the invoice issued on behalf and order of the parent company. With the exception of the Single Maquila Tax and the tax treatment established by law, the Maquila Agreement and the activities carried out in execution thereof do not pay any other tax.
The exports made by the maquiladoras are free of VAT. Regarding the recovery of the amount of the VAT tax credit accumulated for the purchases of goods and services, they may use the recovery regime.
- Guarantees for Investments and Encouragement of Employment Generation and Economic and Social Development.
Law No. 5542/15 protects the process of investing in capital for the creation of industries or other national productive activities, when they contribute to the generation of employment and economic and social development of the country, with the incorporation of added value to the Paraguayan or imported raw material.
This benefit is available to national and foreign individuals, as well as national and foreign individuals.
At FeliuN&I and ExpatFeliu we want to help you.
Thanks to our experience and team, we can help you and inform you about the complete advantages of investing in a country like Paraguay.
If you need advice on how to invest in Paraguay do not hesitate to contact us.