More than 200 Brazilian industries have chosen to concentrate their operations in Paraguay, motivated by the Maquila Law. This strategic tax regime allows companies to import machinery and raw materials with full tax exemption, requiring only a single 1% tax on the final product value, which must be mandatory allocated to exports.
To adhere to the regime, a "maquila program" must be presented to the government, detailing the operation, cost structure and projections.
Among the requirements for program adoption is also the so-called productive transformation. This requirement determines that the company's products undergo some industrial process in the country, generating local value. Speaking in practical terms, this means that the industry will inevitably have to perform steps such as cutting, assembly, sewing, finishing or industrialization in Paraguay.
Recent updates to the regime were announced that enabled the inclusion of service and technology activities, in addition to new tax incentives aimed at attracting investments.
Through an announcement on the Paraguayan government's official website, the country's president, Santiago Peña (Colorado Party), stated that the objective "is not only to create jobs, but also to guarantee competitive salaries that allow workers to achieve the dream of homeownership and provide their children with an excellent education. We are combating prejudices and demonstrating that Paraguayan talent is synonymous with global excellence".
President Peña stressed that the advance of the industrial sector is not linked only to tax incentives, but also to predictability, economic stability and workforce qualification. Furthermore, the government intends to adopt administrative modernization measures, including process simplification and the use of technological tools to accelerate the opening of new companies.
Beyond tax advantages, businessmen mention that cheaper labor and less bureaucratic labor laws in the country are also factors taken into consideration in the decision to operate in Paraguay. According to some experts, for many companies the move to Paraguay is considered permanent.
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