New Regulatory Instruments to Drive Industry and Investment in Paraguay

By BKM | Berkemeyer

On September 8, 2025, three highly significant regulations for the country’s productive and investment ecosystem were published in Paraguay’s Official Gazette.

They include Law No. 7546, which establishes the National Policy for the Production and Assembly of Electrical, Electronic, Electromechanical, and Digital Equipment; Law No. 7547, which sets out the new Maquila Regime; and Law No. 7548, which lays the groundwork for a New Fiscal Incentive Regime for National and Foreign Investment. These measures serve as foundational pillars in a state strategy aimed at attracting capital, generating formal employment, and positioning Paraguay as an industrial and logistics hub in the region. 

Law No. 7546 creates a specific framework for the manufacture and assembly of electrical, electronic, electromechanical, and digital goods domestically. Key provisions include precise definitions of eligible capital goods and materials; tariff exemptions and VAT reductions for imports and local acquisitions; compatibility rules with other fiscal incentives; and requirements such as a minimum of 20 % national value-added, formal employment generation, incorporation of efficient technologies, and technology transfer programs. The law offers benefits lasting 20 years (renewable for an equal term), establishes dual monitoring (both on-site and off-site), and includes corrective measures up to revocation. 

Law No. 7547 overhauls the 1997 maquila regime. It introduces a flat 1 % tax on value-added value in Paraguay or on export invoices—whichever is higher; maintains duty-free temporary admission of inputs and capital goods; recognizes diverse modalities (pure maquila, idle-capacity maquila, sub-maquila, and shelter arrangements); permits VAT credit refunds for exporters (with some restrictions for maquila service arrangements); and allows “virtual operation” transfers of temporarily imported goods or outputs between maquiladora firms. Benefits last 20 years, with successive renewals. The law also establishes a National Council of Export Maquiladoras (CNIME) with an executive secretariat, allows maquiladoras to sell up to 10 % of their previous year’s export volume domestically (subject to nationalization and internal taxes), and incorporates a graduated sanctioning procedure. 

Law No. 7548 replaces the historical Law 60/90 and updates the regime for productive investments. It includes exemptions from import duties and VAT on capital goods, inputs, and raw materials used in industrial, agricultural, or service production (excluding rates for services actually provided); VAT exemptions for locally acquired goods used in production; VAT exemptions on first transfers of capital goods between beneficiaries; and exemptions from Non-Resident Income Tax (INR) on external financing and from the IDU on dividends for investments of at least USD 13 million (adjustable by the CPI). Tourism or entertainment projects exceeding USD 20 million also qualify for customs and VAT exemptions on capital goods. Benefits last 20 years (with partial renewals), and project approvals involve a Council of Investments and a Biministerial resolution (MIC–MEF) with deadlines: 60 days for council review, 15 days for ministerial decision. The law allows for transfers of capital goods between beneficiaries without losing previous exemptions, introduces fiduciary guarantee structures, and includes strict monitoring and staged revocation mechanisms. 

In summary, this legislative trio reinforces Paraguay’s strategy of fiscal competitiveness, legal certainty, and capital attraction. Law No. 7546 stimulates tech manufacturing, Law No. 7547 modernizes the maquila regime with a competitive tax rate, and Law No. 7548 broadens tax incentives for high-value productive investments. Together, they position Paraguay as a preferred destination for nearshoring, value-chain relocation, and new industrial projects.