The Paraguayan government changes its maquila regime – a system that allows foreign companies to produce in the country with export-oriented tax incentives – to attract more foreign investment. The reform increases legal security, speeds up adoption of the model, reduces operational costs and increases the number of companies able to access tax benefits. Here is the text (PDF – 18 MB, in Spanish).
The lawyer , CEO of the Paraguayan consultancy company on foreign investments , told the Poder360 that the objectives of the Paraguayan government include both attracting foreign companies, including Brazilian ones, and promoting the formalization of the local economy.
The main change promoted by the government of (Colorado Party, right) was to include services in the maquila regime. Previously, this type of activity did not have its own category and was treated as intangible assets. Now, it now has a specific framework within a model previously focused on the production of goods. According to Mersan, the change is relevant because “a service company sets up in much less time than a goods company”.
In practice, this opens up space for technology companies, call centers and administrative services to operate in the country with tax incentives for exports, as they require less installation time than industries.
The lawyer said that the range of services that can benefit from this new model is wide. It mentions accounting, software manufacturing and BPO (Business Process Outsourcing). “The condition is that they are provided abroad.”he stated.
According to Mersan, the main objective is for foreign companies to invest in the country and hire Paraguayans. “Therefore, it is not possible to place a company here with a server that automates the process and makes the service effectively provided in another country”he declared.
Fiscal compensation for the revenue loss produced by the maquila regime occurs in the creation of jobs, which indirectly increases revenue from taxes on consumption and income.
For Oscar Mersan, the maquila regime is also a way of boosting the formalization of the Paraguayan economy – currently 67% informal. According to the lawyer, 100% of workers in this system – around 35,000 people – work formally, that is, they are entitled to a minimum wage and social security coverage, in addition to being included in the tax system.
He also stated that one of the objectives of the Peña government is to promote a “transfer of knowledge and education”through exchange promoted by foreign investment.
In addition to the single rate and the refund of VAT credit, international companies benefit from the maquila regime by the possibility of sending profits to their countries of origin without the 15% taxation applied to industries operating under the normal regime. According to the lawyer, maquiladora companies have a 15% to 20% gain in competitiveness.
Mersan said that the Covid pandemic and the wars in Ukraine and Iran led industries to seek suppliers of raw materials and services that are closer in territory, which helps to make Paraguay an attractive environment for Brazilian companies. The intention, according to him, is to attract them “as a complement so that they can optimize their costs and access markets other than Brazil at a competitive price”.
Some Brazilian companies already operate in Paraguay under the maquila regime.
This is the case of Lupo, Karsten, Riachuelo and JBS, for example. The expectation, now, is to attract investments focused on the services sector, especially in technology, administration and BPO.
HOW MAKEUP COMPANIES WORK
Maquiladora companies are companies that produce goods or provide services in Paraguay aimed at exporting, with tax incentives. In this model, foreign companies send inputs, technology or contract services in the country, where part of the production process or operation takes place, and the result is destined for the foreign market.
The regime is used to attract investment and create formal, quality jobs by offering lower costs to companies. Maquiladoras pay a reduced rate on the added value, in addition to having benefits such as tax exemption on the import of inputs.
According to the Paraguayan government, this segment already brings around 4,000 jobs in the country and has the presence of international companies, consolidating Paraguay as a destination for operations with a technological component.
The official expectation is that the regulation will contribute to:
- increased exports of goods and services with higher added value;
- market diversification;
- strengthening the trade balance;
- greater competitiveness.
The regulation was made on Monday (April 6, 2026). Here is the announcement on the official Paraguayan government website (PDF – 500 KB).
