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.