Blog · 2025-07-08

Paraguay for investors in 2025: taxes, residency, business, exports and key advantages

Paraguay is one of South America's most promising investment destinations - and for years one of its most overlooked, overshadowed by heavyweights such as Brazil, Mexico and Chile. Today, however, it is Paraguay that is emerging as a genuinely attractive option for foreign investors, thanks to a stable economy, low taxes, a favourable investment climate, a strategic location and active government support for business. The country is drawing capital into agriculture, industry, energy and logistics, offering rare conditions for anyone who wants to live in a fast-growing economy with minimal taxation and strong potential for capital appreciation. For any foreigner searching for a safe and profitable base for business in Latin America, Paraguay deserves a close look.

A strategic location and solid infrastructure

Paraguay sits at the logistical crossroads of the continent. Its road and river networks - above all the 2,770-kilometre Paraguay-Paraná waterway system - connect it to the major ports of Brazil, Argentina, Chile and Uruguay, making the country a natural logistics hub for regional exports.

Steady growth and macroeconomic discipline

Despite regional crises and the COVID-19 pandemic, Paraguay has continued to post positive GDP growth: 3.8% in 2024 and 4.5% in 2023. Inflation is low (3.7%), international reserves are robust (US$9.6 billion), and public debt is among the lowest in the region at 33% of GDP.

Tellingly, the Fundação Getulio Vargas index (December 2023) ranked Paraguay first in Latin America for economic climate.

A simple, competitive tax regime

Forget the heavy fiscal burden of neighbouring countries. Paraguay offers the following terms:

• 10% corporate and personal income tax;
• 10% VAT;
• an overall tax burden of roughly 35% - one of the lowest in Latin America;
• zero tax on foreign-source income and capital gains.

Crucially, under Law 60/90 investors can secure zero rates on import duties, VAT, repatriation tax and profit tax for up to 10 years - and longer for large-scale projects.

A global leader in clean, cheap energy

Paraguay is the world's leading net exporter of hydroelectric power, thanks to the vast Itaipú and Yacyretá dams. Nearly 100% of its electricity comes from renewable sources.

The commercial rate is just US$0.066 per kWh - the lowest in the region. That makes it especially attractive for energy-intensive sectors such as data centres, AI infrastructure, agribusiness and manufacturing.

Industrial incentives: the Maquila regime, free zones and more

Paraguay's Maquila regime is one of the most investor-friendly in Latin America:

• a 1% tax on the gross value of production;
• full exemption from import duties and taxes;
• VAT refunds on domestic purchases;
• no taxes on dividends or profit repatriation.

Companies in free economic zones pay just 0.5% export tax, enjoy customs benefits and are exempt from a range of local taxes.

Explosive export potential

Paraguay is among the world's leading exporters of:

• chia (1st), yerba mate (3rd), soybeans (6th), beef (8th) and stevia (2nd);
• as well as cassava starch, soybean oil, grapefruit juice, synthetic blankets and more.

And this is no longer just about raw commodities - exports of value-added products are climbing rapidly. Maquila exports quadrupled between 2014 and 2023.

Trade agreements and access to world markets

As a member of MERCOSUR, Paraguay offers access to a market of 295 million people, plus preferential agreements with the EU, EFTA and countries across Asia, the Middle East and Africa.

The EU-MERCOSUR and EFTA-MERCOSUR agreements signed in 2019 grant duty-free access for 93% of exported goods, including agricultural products, technology and manufactured items.

A young population and a competitive labour market

Paraguay has one of the youngest populations in the region, with a fast-growing and trainable workforce. The minimum wage is US$365 a month, and social contributions are moderate: 16.5% from employers and 9% from employees.

PPPs in infrastructure: opportunities for private investors

Law 5102 allows private business to take part in building and operating key infrastructure - from motorways and ports to power grids, social housing and water treatment - under the public-private partnership (PPP) model.

Why Paraguay, and why now?

The answer is simple: Paraguay is open for business. Low taxes, steady growth, an abundance of cheap energy and a government determined to attract foreign investment together create rare conditions for anyone looking to build a business in South America.

It is also worth noting that Paraguay offers one of the fastest and most cost-effective citizenship-by-investment programmes anywhere. This is a strategically located, globally connected land of opportunity. Paraguayan citizenship by investment gives foreigners and their families a unique chance to obtain a passport in 6-12 months and enjoy all its benefits: visa-free travel to 148 countries, including the Schengen area, the United Kingdom and Singapore; eligibility for the US E-2 visa; tax optimisation (a 10% rate); and life in a country with a high standard of living and a pleasant climate.

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