The president of Paraguay, (Colorado Party), regulated this Monday (April 6, 2026) Law No. 7,547/2025, which deals with the maquila regime, during a visit to the textile company Blue Design América, in San Lorenzo. The model allows the production of goods and the provision of services in the country with tax incentives and a focus on the foreign market. The rules establish the return of 0.5% of the VAT credit for service companies.
With the measure, the country expands incentives for the installation of foreign companies, with emphasis on the low tax burden and the inclusion of services in the regime, which tends to increase Paraguay’s competitiveness in attracting investments. The text was approved in September 2025. Here is it (PDF – 18 MB, in Spanish).
According to the government, the measure seeks to promote the creation of formal and quality employment, in addition to encouraging the growth of exports with greater national added value. Here is the announcement on the official Paraguayan government website (PDF – 500 KB).
Here is the publication translated into Portuguese:
“The best social policy is decent, quality employment!
“Today I signed the decree implementing the maquilador regime, a fundamental instrument to ensure that our country’s economic growth translates into real well-being for all Paraguayan families. With this regulation, the Government of Paraguay modernizes processes and eliminates obstacles, establishing clear rules and demonstrating a firm commitment to progress.
“Our objective is not only to create jobs, but also to guarantee competitive salaries that allow workers to realize their dream of owning a home and provide their children with an excellent education. We are combating prejudice and demonstrating that Paraguayan talent is synonymous with global excellence.”
Changes in the regime and expansion of governance
The regulation introduces changes to the structure of the maquila regime in the country. Among them is the expansion of sector governance, with the inclusion of DNIT (Dirección Nacional de Ingresos Tributarios) and MTESS (Ministerio de Trabajo, Empleo y Seguridad Social) in the CNIME (Consejo Nacional de la Industria Maquiladora de Exportación).
In practice, the measure allows the formal entry of service companies, which can now adhere to the model and request the return of VAT credit. The change tends to reduce operational costs and increase Paraguay’s attractiveness for foreign companies, especially in areas such as technology, remote customer service and administrative services.
The regulation comes after around 2 years of internal discussions between the MIC (Ministerio de Industria y Comercio), DNIT and the MEF (Ministerio de Economía y Finanzas). Second Peñathere were disagreements about how to structure investment regimes in the country. He also stated that the development of the sector does not only depend on tax incentives, but on factors such as predictability, economic stability and qualification of the workforce.
In addition to institutional expansion, the government highlights administrative modernization measures, such as simplifying processes and incorporating technological tools to reduce deadlines and facilitate the opening of new companies. If implemented, these changes could accelerate the installation of new businesses in the country.
Economic and service sector impact
The measure impacts maquiladora companies operating in Paraguay, especially in the service sector, which now have clearer access to the benefits of the regime.
According to the government, this segment already brings around 4,000 jobs to 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.
What are maquiladora companies
Maquiladora companies are companies that produce goods or provide services in the country aimed at export, with tax incentives. In this model, foreign companies send inputs, technology or contract services in Paraguay, 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 jobs by offering lower costs to companies. In Paraguay, maquiladoras pay a reduced rate on the added value, in addition to benefits such as tax exemption when importing inputs.
With recent regulations, the model now includes the provision of services, expanding the scope of the regime to areas such as technology, remote service and administrative processes.
