Redacción Paraguay Business Hub

Paraguay’s Chaco Could Become a Regional Fertiliser Hub

Businesses /

Paraguay’s Chaco Could Become a Regional Fertiliser Hub Paraguay is studying a proposal to develop fertiliser production in Carmelo Peralta, in Alto Paraguay, combining Argentine natural gas, the Bioceanic Corridor and river logistics. The project remains preliminary, but it illustrates how new infrastructure could give the western Chaco an industrial role beyond cattle ranching and transport. 16 September 2026 A proposal presented by Paraguayan officials at a regional gas-integration workshop in Montevideo has placed Carmelo Peralta on the map as a possible location for fertiliser production. The idea is to use Argentine natural gas as an industrial feedstock and take advantage of Paraguay’s improving transport connections to serve agricultural markets across the Southern Cone. Carmelo Peralta offers an unusual logistics combination The proposed location is strategically significant. Carmelo Peralta lies on the Paraguayan section of the Bioceanic Corridor, which is being developed to connect Brazil, Paraguay, northern Argentina and ports on Chile’s Pacific coast. It is also close to the Paraguay River, creating the possibility of combining road and fluvial transport for inputs and finished products. For a fertiliser plant, this combination could reduce dependence on a single transport route and provide access to several large agricultural markets. Brazil and Argentina are among the world’s major crop producers, while Paraguay itself has a large commercial agriculture sector with significant demand for fertilisers. A possible new industrial role for Alto Paraguay Alto Paraguay remains one of the country’s least densely populated departments and its economy has traditionally been dominated by extensive cattle ranching and logistics activity. A fertiliser project would require a different industrial ecosystem: energy infrastructure, storage, specialised services, maintenance, transport capacity and skilled labour. If implemented, the investment could therefore have an effect beyond the plant itself. Industrial projects of this type can create demand for local services and infrastructure and may encourage other companies to locate close to a new energy and logistics node. Regional gas integration is the key variable The proposal depends heavily on access to Argentine natural gas at a competitive price. Paraguay does not currently have domestic natural-gas production capable of supplying a project of this scale, so the economic case would require reliable cross-border transport infrastructure and long-term supply arrangements. The project is still at an exploratory stage. No final investment decision, construction timetable or financing structure has been announced. Its feasibility will depend on the cost of gas, required infrastructure, environmental and regulatory approvals and the ability to compete with imported fertilisers. The Bioceanic Corridor may attract production, not only traffic The broader significance is that the Bioceanic Corridor could generate investment opportunities beyond transport itself. Better connectivity can make previously remote locations viable for industrial activities that depend on regional rather than local demand. For Paraguay, the long-term economic value of the corridor may therefore lie not only in moving goods across the Chaco, but also in creating conditions for new production to take place there. Sources Ministry of Public Works and Communications – Fertiliser hub proposed for Carmelo Peralta Ministry of Public Works and Communications – Bioceanic Corridor information Ministry of Industry and Commerce – Investment and industrial development news Government of Paraguay – Official information on Bioceanic Corridor development © 2026 Paraguay Business Hub. All rights reserved.

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Paraguay Activates New Investment Incentives Regime

Businesses, Economy, Foreign Investment /

Paraguay Activates New Investment Incentives Regime Paraguay has brought Law 7,548/2025 into operation through Decree 5,432/2026, replacing the investment incentive framework created by Law 60/90. The new regime retains important customs and tax exemptions while introducing clearer thresholds, project criteria, employment benchmarks and post-approval controls. 8 September 2026 Law 7,548 was promulgated on 8 September 2025 and brought into operation by Decree 5,432 of 29 January 2026. The Ministry of Industry and Commerce has since published the application route and documentary requirements for investors seeking benefits under the new system. Main incentives remain available The law replaces Law 60/90 but retains its central investment incentives. Approved projects may receive customs duty relief on imported capital goods and on inputs used to manufacture capital goods included in the project. Value added tax exemptions may also apply to qualifying imports and local purchases. The first transfer of qualifying capital goods between beneficiaries can receive similar VAT treatment. Projects of at least USD 13 million may qualify for an exemption from Non Resident Income Tax on interest and related charges paid to qualifying foreign lenders. At the same threshold, income generated by the approved investment may receive a ten year exemption from the Tax on Dividends and Profits, subject to conditions concerning the origin of the investment and foreign tax credits. Large tourism and entertainment projects have a separate USD 20 million threshold for relief on imported capital goods. Approval depends on project evidence The application must now present a measurable investment project rather than only a list of equipment. It must identify the activity, location, financing sources, schedule, production or service capacity, employment and expected financial results. An environmental impact declaration is required before benefits are granted. Projects exceeding USD 13 million must be prepared by professionals or consulting firms registered with the Ministry. For 2026, the Ministry has set a reference benchmark of two permanent employees for each USD 50,000 invested. A new project below that benchmark may still qualify if it documents a significant and measurable contribution to production, technology, local integration or smaller businesses. The employment test is only indicative for expansions and is not required for modernisation or complementary investments. Import relief can also be refused when Paraguayan industry produces a functionally compatible capital good and can supply the required quantity and quality within the project timetable. Investors should therefore check domestic availability before finalising procurement assumptions. Applications follow a digital process Applications are filed online through the Single Export Window. The Ministry reviews the documents before the Investment Council considers the project, and final approval is granted by a joint resolution of the Ministers of Industry and Commerce and Economy and Finance. The Ministry currently reports an average processing time of 45 days and a maximum of 75 days for the procedure. The online route remains document intensive. Technical specifications, invoices, financial statements, environmental documents and corporate registrations must be consistent with the investment schedule. Foreign language documents require a Spanish translation by a registered public translator. Existing projects receive transitional protection Projects approved under Law 60/90 generally remain subject to the rules applicable when their approval was issued. Renewals, complementary benefits and certain transfers are instead governed by the new provisions. The reform also allows renewals for new activities, expansions and modernisation within twenty years of the first concession. For new investors, the practical message is clear: define the investment perimeter, requested benefits, employment case, local supply analysis and implementation schedule before acquiring or importing equipment. The new regime preserves substantial tax relief, but approval and continued access depend on a project whose economic contribution can be documented and monitored. Sources National Directorate of Tax Revenue Law 7,548 of 2025 on investment incentives Ministry of Industry and Commerce Operational information for Law 7,548 Ministry of Industry and Commerce Decree 5,432 of 2026 implementing Law 7,548 Ministry of Industry and Commerce Guide for preparing investment projects © 2026 Paraguay Business Hub. All rights reserved.

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Paraguay Tax Revenue Rises as Domestic Collections Offset Weaker Customs Receipts

Businesses, Economy, International, Taxation /

Paraguay Tax Revenue Rises as Domestic Collections Offset Weaker Customs Receipts Paraguay’s tax authority reported higher revenue in July 2026, with strong growth in domestic tax collections offsetting weaker customs receipts. The figures provide another indication of resilient domestic economic activity without changes to the country’s headline corporate tax rate. Paraguay’s National Directorate of Tax Revenues (DNIT) collected ₲4.086 trillion — approximately US$684.9 million — in July 2026, representing a 3.6% increase compared with the same month of 2025. The strongest performance came from domestic taxation. The General Directorate of Internal Taxes collected ₲2.591 trillion, approximately US$434.4 million, an 8.1% year-on-year increase. According to the DNIT, VAT collections were supported particularly by commerce, electricity and water, business services, household services, telecommunications and information and communication activities. citeturn118325search0 Customs revenue moved in the opposite direction. Collections amounted to approximately ₲1.495 trillion, 3.5% below July 2025. The DNIT attributed much of the decline to the appreciation of the Paraguayan guaraní, which reduced the local-currency taxable base of imports. citeturn118325search0 Between January and July, total DNIT revenue reached ₲25.817 trillion, 2.1% above the corresponding 2025 period. For foreign investors, the figures are relevant because Paraguay continues to increase fiscal revenues while maintaining a comparatively low-tax corporate framework. The standard Corporate Income Tax (Impuesto a la Renta Empresarial – IRE) remains at 10%, while VAT generally applies at 5% or 10% depending on the transaction. The authorities are simultaneously increasing digitalisation and tax control. In August, the DNIT introduced new digital tools designed to simplify taxpayer registration and administrative procedures while improving access to verified public data and strengthening enforcement capabilities. citeturn118325search5 The combination of moderate tax rates, growing collections and greater digital administration will be an important factor to monitor as Paraguay seeks to preserve fiscal competitiveness while improving compliance. Sources: DNIT — July 2026 tax collection figures; DNIT — New digital tax tools

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Paraguay Opens New Route for Private Investment in Renewable Power

Businesses, Economy, International /

Paraguay Opens New Route for Private Investment in Renewable Power Paraguay is putting into operation a new regulatory framework for private investment in solar, wind, biomass and other non-hydroelectric renewable energy, creating opportunities beyond the country’s traditional dependence on large hydroelectric plants. Paraguay’s Vice Ministry of Mines and Energy has published new implementing rules establishing procedures for licensing private renewable-energy projects under Law 7,599/2025, which modernised the regulatory framework for non-conventional renewable generation. The measures cover licences for self-generation, cogeneration, commercial generation and electricity exports. They also establish procedures for ANDE, Paraguay’s national electricity utility, to determine reference prices for purchasing electricity produced by private renewable generators and define compensation mechanisms where technical or operational restrictions affect supply. The framework represents a significant change for an electricity system historically dominated by hydroelectric generation from Itaipú, Yacyretá and Acaray. The government wants private solar, wind, biomass and biogas investment to complement hydropower as domestic electricity demand expands. For investors, the relevance extends beyond electricity generation itself. Industrial companies may increasingly be able to assess self-generation or cogeneration projects as part of their operating strategy, while specialist developers can explore projects intended to supply the national system or potentially export power.   The government has identified diversification of generation as necessary to strengthen energy security and support future industrial growth. Paraguay’s electricity consumption has been rising rapidly, increasing pressure on generation, transmission and distribution infrastructure. The new rules do not eliminate project-specific risks. Connection capacity, tariffs, permitting, financing and the commercial relationship with ANDE will remain central to investment decisions. Nevertheless, the establishment of practical licensing and pricing procedures removes part of the regulatory uncertainty that previously limited private participation. For international renewable-energy developers and energy-intensive industries, Paraguay’s electricity market is therefore beginning to evolve from an almost exclusively hydroelectric system towards a broader private renewable-investment opportunity. Sources MOPC – Implementing resolutions for renewable energy projects MOPC – Regulation of Paraguay’s new renewable-energy framework  MOPC – Law 7,599/2025 and energy-sector legislation

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Paraguay Approves Bilateral Investment Protection Agreement with Japan (Law No. 7,688)

Businesses, Economy /

Paraguay Approves Bilateral Investment Protection Agreement with Japan (Law No. 7,688) Paraguay has taken another step toward strengthening its legal framework for foreign investment with the approval of the bilateral Investment Agreement between Paraguay and Japan. Law No. 7,688, which approves the Agreement between Japan and the Republic of Paraguay for the Promotion and Protection of Investment, was promulgated on July 31, 2026 and published on August 4. The agreement itself had been signed in Asunción on December 5, 2025. The treaty is designed to provide investors from both countries with greater legal certainty when investing in the other jurisdiction. Among its main provisions are national treatment for established investments, most-favored-nation treatment, fair and equitable treatment, rules governing expropriation and compensation, freedom to transfer investment-related funds and mechanisms for the settlement of investment disputes. For Paraguay, the agreement is particularly relevant as the country seeks to attract a larger share of long-term Asian investment. Japan represents an important potential source of capital, technology and industrial know-how, particularly in sectors such as manufacturing, agribusiness, logistics, infrastructure and technology. The agreement also fits within Paraguay’s broader strategy of improving the legal and institutional environment for international investors. In recent years, the country has combined relatively low taxation, competitive energy costs and macroeconomic stability with reforms aimed at facilitating foreign investment and modernizing investment incentives. Paraguayan congressional approval represents an important domestic legal step, although the treaty should not yet be treated as fully effective. International investment treaty databases continue to classify the Japan-Paraguay agreement as signed but not yet in force, pending completion of the procedures required by both countries. Once effective, the agreement should reduce part of the legal and political risk associated with cross-border investment by providing Japanese investors with an additional layer of treaty protection beyond Paraguayan domestic law. For Paraguay, its significance therefore goes beyond bilateral relations with Japan. The agreement reinforces the country’s attempt to present itself internationally as a predictable, rules-based jurisdiction for foreign capital and as an increasingly attractive platform for investment in South America. Sources Congress of Paraguay – Law No. 7,688/2026 UNCTAD Investment Policy Hub – Paraguay international investment agreements

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EU–Mercosur Deal Moves into the Compliance Phase

Businesses, Economy, Legislation, Mercosur/EU /

EU–Mercosur Deal Moves into the Compliance Phase for Paraguayan Exporters With the interim trade agreement provisionally applied since 1 May, the commercial opportunity for Paraguay is becoming increasingly practical: tariff preferences now depend on origin rules, quota management and the ability of exporters to meet European regulatory standards. The EU–Mercosur trade agreement is moving from political headline to day-to-day implementation. On 7 August, Mercosur’s External Relations Group resumed work under Uruguay’s rotating presidency and reviewed implementation of the agreement with the European Union, with Paraguay participating alongside the other regional delegations. The meeting confirms that the immediate challenge is no longer signing the deal, but making its market-access provisions usable by companies. The Interim Agreement on Trade has been provisionally applied between the European Union and the Mercosur parties since 1 May 2026. Paraguay completed its domestic procedures in March. Under the official Paraguayan assessment, the EU will liberalize 93% of imports from Mercosur within a maximum of ten years, while Mercosur will liberalize roughly 90% of imports from the EU over periods extending to fifteen years. Paraguay estimates that at least 95% of its current and potential exports will ultimately receive zero-duty or preferential access. For businesses, however, lower tariffs are only one part of the new framework. Mercosur’s Trade Commission completed the technical adjustment of tariff nomenclatures and rules of origin in May and confirmed that EU tariff-rate quotas had been loaded into the regional quota-management system. Paraguayan exporters therefore need to identify the correct product classification, satisfy the relevant origin test and comply with sanitary, technical and customs requirements before claiming preferences. The agreement may be particularly relevant for Paraguay because its domestic market is relatively small and its investment strategy increasingly depends on export-oriented production. The Ministry of Industry and Commerce highlights more flexible origin provisions for sectors such as auto parts and a transition toward self-certification of origin after the initial adaptation period. This can support manufacturing and processing projects that combine Paraguayan energy and operating costs with access to both Mercosur and European markets. For international investors, the practical lesson is straightforward: the EU–Mercosur agreement improves Paraguay’s market-access proposition, but investment models should now be designed around the agreement’s product-specific origin rules rather than headline tariff reductions alone. Supply-chain structure, sourcing decisions and documentary compliance can determine whether a Paraguayan operation actually qualifies for preferential entry into the EU. Sources Mercosur External Relations Group, 7 August 2026 — https://www.mercosur.int/el-mercosur-retoma-su-agenda-externa-bajo-la-presidencia-pro-tempore-de-uruguay European Commission — EU trade agreements, status of provisional application — https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/negotiations-and-agreements_en Paraguay Ministry of Foreign Affairs — EU–Mercosur agreement — https://www.mre.gov.py/acuerdo-birregional-entre-mercosur-y-la-ue-2/ Paraguay Ministry of Industry and Commerce — EU–Mercosur agreement overview — https://www.mic.gov.py/wp-content/uploads/2026/04/ACUERDO-DE-ASOCIACION-ENTRE-MERCOSUR_-UE.pdf

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Paraguay’s Foreign Direct Investment Base Deepens as BCP and FLAR Map $10 Billion in Net Inflows

Businesses, Economy /

Paraguay’s Foreign Direct Investment Base Deepens as BCP and FLAR Map $10 Billion in Net Inflows A new study by Paraguay’s Central Bank and the Latin American Reserve Fund shows how foreign investment in the country has broadened beyond traditional activities, with services and manufacturing playing an increasingly important role. Paraguay accumulated approximately US$10 billion in net direct investment flows between 2008 and 2024, according to a new study presented on 6 August by the Central Bank of Paraguay (BCP) and the Latin American Reserve Fund (FLAR). The report offers one of the most detailed recent pictures of how foreign capital has evolved across the Paraguayan economy. Banco Central del Paraguay Non-financial services attracted the largest share of investment over the period, particularly commerce, telecommunications and transport. Manufacturing, meanwhile, has become more diversified and has increasingly moved into higher value-added activities. Financial services recorded comparatively high profitability, while the primary sector represented a smaller share of total investment but has recently expanded into non-traditional activities. Banco Central del Paraguay The findings are significant for international investors because they suggest that Paraguay’s investment story is becoming less dependent on agriculture and commodity production. REDIEX has separately reported that the number of countries investing in Paraguay rose from 39 in 2008 to 68 in 2024, while the accumulated stock of foreign direct investment quadrupled over the same period. MIC This diversification comes at a favorable macroeconomic moment. The Central Bank currently forecasts 4.5% GDP growth in 2026, following estimated growth of 6% in 2025, while its 2026 inflation forecast stands at 3.3%. The IMF has similarly highlighted Paraguay’s macroeconomic resilience, strong external buffers and improving sovereign risk profile. Banco Central del Paraguay For foreign companies evaluating Paraguay, the new investment data reinforces a broader trend: the country is increasingly positioning itself not simply as an agricultural exporter, but as a regional base for manufacturing, logistics, business services and internationally oriented investment. Sources: Banco Central del Paraguay; FLAR; REDIEX; IMF. Banco Central del Paraguay

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