Why Are Businesses Looking Towards Paraguay To Begin Commercial Operations?

Breaking into Latin American markets, whether to sell goods and services to consumers or to utilize the territory’s unrivaled natural resources and low-cost labor market, makes sound economic sense for businesses of all shapes and sizes. But deciding on the right country to begin your international expansion can be tough – indeed, Latin America is home to a whole host of exciting and thriving markets, such as Brazil, Mexico, Colombia, Peru, and Chile.

So why should you consider Paraguay to begin commercial operations in the territory? Below, we have put together some of the biggest reasons why, and offer advice on how to maximize your investment in the country to create a brand that will stand above and beyond competitors.

Easy Access into the Market

Perhaps one of the biggest reasons why you should consider the country for your first venture in Latin America is because it’s easy to start a business in Paraguay. Indeed, whether you plan to invest hundreds of thousands of dollars into a foreign venture, or you’re an entrepreneur with limited funds, the truth is that it’s straightforward to get started and register a new business.

Whether you’re considering forming a Sociedad Anónima (S.A), which is the most popular option for large businesses, a Sociedad de Responsibilad Limitada (SRL), which is useful if you require protection against your investment, or a Branch Office, a great option for those who want to pledge a long-term investment in the country, it pays to research and establish in a form that best aligns with your needs and aspirations. 

What’s more, provided you have around US$5,000 and a bank account in the country, you’ll be able to apply for a visa and enjoy full, permanent residence in the country, enjoying all of the same rights and access as a Paraguayan citizen other than full suffrage. This not only allows you to set up a base for your venture in the country but maximize your time without the worry of applying for a visa every time you want to attend a business meeting or network with clients.

As Paraguay incorporation and residency is so accessible to entrepreneurs, there has been a significant increase in foreign investment, with companies based in the United States, Brazil, and Spain leading the way in sectors such as food, manufacturing, logistics, and services.

Unbeaten Government Support

paraguay government support commercial opportunities
Paraguay boasts an open economic policy.

Amongst the many reasons to invest in Paraguay is the country’s unbeaten business landscape. It boasts an open economic policy that was designed with foreign investors in mind, such as Law 60/90, which was designed to maximize foreign investment by offering benefits such as fee-free company registration, the waiving of customs duties on goods brought into the country to sell or manufacture, and for businesses that are expecting to invest more than US$5 million into the territory, the exemption from withholding tax on the repayment of loans, and the exemption from taxes on profits and dividends. These unparalleled benefits are hard to find in other Latin American countries, which is why Paraguay should be at the top of your investment location list. 

An Optimal Geographic Spot

Beginning your commercial operations in the country of Paraguay also allows you to benefit from its unique geographical position. In easy reach of countries such as Brazil, Uruguay, Argentina, Chile, and Bolivia, you can effectively set up a base in the country and distribute your goods to its surrounding territories, maximizing investment and reducing the costs of shipping and exporting. Home to hundreds of millions of consumers, all ready and waiting to purchase your goods and services, Paraguay and its surrounding neighbors can be lucrative customers.

An additional benefit to establishing your first LATAM business in Paraguay is the country’s trade agreements, which offer access into other territories with reduced or waived export fees.

Paraguay is a founding member the Southern Common Market (Mercosur), for example, and alongside Argentina, Brazil, Paraguay, and Uruguay has agreements with countries including Egypt, India, Israel, Palestine, and the Southern African Customs Union (SACU), and it’s also working hard to secure a trade deal with the European Union, potentially unlocking billions of dollars in import and export revenue from European customers and businesses that are hungry for quality goods.

The country is also the founding member of the Association for Latin American Integration (ALADI – Asociación Latino Americana de Integración), which offers bilateral agreements designed to allow the liberalization of trade between thirteen countries (Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Paraguay, Panama, Peru, Uruguay, and Venezuela) which, again, lowers barriers into other territories and maximizes low-tariff trade.

Unique Industry Opportunities

paraguay commercial operations agriculture
Paraguay is home to growing opportunities across unique industries such as the energy sector and agriculture.

Paraguay is home to growing opportunities across unique industries such as the energy sector and agriculture. Indeed, the country is paving the way in the green energy market, and in agriculture, it offers the perfect climate for both livestock and crops such as corn and soy, which are manufactured into goods to be sold across Latin America, and exported as raw materials.

Entering into such a market in Paraguay allows access to an untapped industry, and offers unique insights into Latin American cultures, business attitudes, and markets so that deals and businesses can be replicated in other Latin American territories to further boost market share.

Begin Your Commercial Operations in Paraguay

If you’re considering beginning your commercial operations in the country of Paraguay, then there are lots of things that you need to take into account. Once you have found a gap in the market, researched into demand for your products and secured the necessary funding, the next step is to incorporate and begin the process of launching and building your Paraguayan startup.

If you are looking for back-office assistance, whether to recruit staff, ensure due diligence or to incorporate your business, don’t hesitate to reach out to the experts at Biz Latin Hub.

The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.

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