ABOUT PARAGUAY

Amongst all the countries in South America, Paraguay is a landlocked country located in the heart of the continent, known for its vast plains, rich agricultural lands, and significant river systems. The capital of Paraguay is Asunción, which is also its largest city and the economic and cultural hub of the country. According to the report of the World Bank, Paraguay has been classified as an Upper Middle-Income Economy. The currency of Paraguay is the Paraguayan Guaraní (PYG). At the time of writing this article (Wednesday, June 11, 2025), the value of 1 Indian Rupee is approximately 87.5 Paraguayan Guaraní, meaning 1 Paraguayan Guaraní is significantly lower in value than 1 Indian Rupee (approx. 1 PYG = 0.011 INR). The population of Paraguay is estimated at approximately 69.5 lakhs (0.695 crores) as of 2025. The neighboring countries of Paraguay are Argentina, Bolivia, and Brazil. The official and most commonly spoken languages in the country are Spanish and Guarani. The majority of the Paraguayan population practices Catholicism, but other Christian denominations and other religions are also followed. Paraguay has several international airports, with Silvio Pettirossi International Airport (Asunción) being the largest and Guaraní International Airport (Ciudad del Este) also serving international flights, providing convenient air connectivity. As Paraguay is a landlocked country, it relies on its extensive river network, primarily the Paraguay and Paraná rivers, and agreements with neighboring countries (Argentina, Brazil, Uruguay) to access Atlantic seaports (e.g., through ports in Buenos Aires, Montevideo, and Paranaguá) for its international trade requirements.

The standard corporate income tax rate for companies in Paraguay is 10%. A 5% dividend tax applies to profits distributed to non-resident shareholders. This low tax rate makes it an attractive destination for investors. Opesh Group of companies will be helping you in completing the Due diligence process which includes financial planning, registration process, business options, and if required, even helping you find a Rental property for your office.

Establishing a business in Paraguay has to be done with utmost care, keeping in mind the laws of the country. The Paraguayan Companies Law (Ley de Sociedades) and other relevant legislation provide clear guidelines for foreign investors to register a company in Paraguay. Foreign investors can form various types of companies, such as a Sociedad Anónima (S.A. – Public Limited Company), Sociedad de Responsabilidad Limitada (S.R.L. – Limited Liability Company), Branch Office, or Sole Proprietorship. A Sociedad de Responsabilidad Limitada (S.R.L.) formed and registered in Paraguay generally allows foreign investors to own 100% of the company.

In case an investor is planning to establish an S.A. or S.R.L. in Paraguay, Opesh Group will be helping you in taking the right decision for setting up your business in Paraguay and we will also guide you about how to follow the procedure while formulating your company in Paraguay.

Types of Business which can be started in Paraguay-

Agriculture and Agribusiness – Paraguay has a highly productive agricultural sector and is a major global exporter of soybeans, beef, corn, and wheat. Opportunities are immense in large-scale farming, food processing, sustainable agriculture, and agricultural technology (agritech). Renewable Energy (Hydropower) – Paraguay is unique in that it produces almost 100% of its electricity from hydropower, primarily from the Itaipu and Yacyretá dams, and is a net exporter of clean energy. Opportunities exist in energy-intensive industries that can leverage this abundant, cheap, and clean electricity. Livestock and Meat Processing – With vast pastures, Paraguay is a significant producer and exporter of beef. Opportunities exist in modernizing livestock operations, meat processing, and exporting value-added meat products. Logistics and Transportation – Despite being landlocked, Paraguay’s strategic location within Mercosur and its extensive river system make it a hub for regional trade. Opportunities exist in riverine transport, warehousing, and logistics services connecting to ocean ports via Argentina or Brazil. Manufacturing – Paraguay has a growing manufacturing sector, often driven by the “Maquila” regime (export-oriented manufacturing with tax incentives). Opportunities exist in textiles, automotive parts, food processing, and assembly operations for regional markets. Forestry and Wood Products – With significant forest areas, opportunities exist in sustainable forestry, wood processing, and the production of furniture and other wood products. Information Technology (IT) and Software Development – Paraguay’s IT sector is developing, with growing demand for digital solutions and services. Opportunities can be found in software development, IT outsourcing, and e-commerce, driven by increasing digitalization. Tourism – While less developed than some neighbors, Paraguay offers unique cultural experiences, natural beauty (e.g., waterfalls, national parks), and historical sites. Opportunities exist in eco-tourism, cultural tourism, and hospitality services.

Advantages of Starting Business in Paraguay-

Paraguay offers one of the lowest corporate income tax rates in the region (10%), making it very attractive for profit-oriented businesses. It is a full member of Mercosur, providing preferential access to a large regional market of over 295 million consumers. The country boasts abundant and cheap hydroelectric power, offering a significant advantage for energy-intensive industries. Paraguay has vast fertile lands and a strong agricultural sector, making it ideal for agribusiness investments. The “Maquila” regime offers significant tax benefits (1% effective tax on value-added) for export-oriented manufacturing. The cost of labor and land is generally lower compared to other countries in the region, contributing to competitive operating costs. Paraguay has a young and growing population, providing a potential labor force. The government is committed to maintaining macroeconomic stability and attracting foreign direct investment.

Business Opportunities for Indians in Paraguay-

There are excellent and often overlooked business opportunities in Paraguay for Indian investors looking for a cost-effective entry point into the South American market, particularly in sectors that leverage its natural resources and favorable tax regime. Paraguay actively seeks foreign investment, especially in manufacturing and agribusiness. Indian investors can explore vast business opportunities in sectors such as agriculture and food processing (especially soybeans, beef), manufacturing (under the Maquila regime for regional exports), renewable energy (leveraging hydropower for industrial use), and potentially IT services. The growing economic ties between India and Latin America provide a favorable context for Indian companies to explore this promising market.

Imports & Exports-

Trade is a vital component of Paraguay’s economy, with significant volumes of goods being imported and exported, primarily driven by its agricultural and energy sectors. Proper research and development are crucial to identify suitable products for import or export and to assess market revenue potential.

Major items which are exported from Paraguay to India-

Soybeans and derivatives (e.g., soybean oil) Wood and articles of wood Leather and articles of leather Cotton Oilseeds (other than soybean) Meat and edible meat offal Hides and skins

Major items which are imported in Paraguay from India-

Vehicles (especially two-wheelers and parts) Pharmaceutical products Machinery and mechanical appliances Organic chemicals Electrical and electronic equipment Textile and apparel products Iron and steel products Rubber products Plastics Rice and other food preparations

Manufacturing-

Indian companies can look into establishing manufacturing units in Paraguay, particularly for food processing (e.g., soybean crushing, meat processing), textiles, and assembly of automotive parts or electronics, leveraging the low tax rates offered by the Maquila regime for export to Mercosur and beyond.

Mining-

While not as prominent as other South American countries, Paraguay has some mineral resources, including iron ore, limestone, and some non-metallic minerals. Opportunities might exist in extraction and processing for local consumption and construction materials.

Major Indian companies which are currently working in Paraguay-

Bajaj Auto (significant presence in the two-wheeler market through assembly and sales partnerships) TVS Motor Company (growing presence in the two-wheeler market) Hero MotoCorp (presence in the two-wheeler market) UPL Limited (agrochemicals, likely through distribution) Various Indian pharmaceutical companies (through distribution and sales). Jindal Steel & Power Ltd. (JSPL) (has explored opportunities in past for steel sector).

GDP = $55.03 billion (nominal, 2025 est.) GDP Growth = 3.8% (2025 est.) Ease of doing business rank = The World Bank’s Ease of Doing Business report has been discontinued; in 2020, Paraguay ranked 125 out of 190 economies. GDP per Capita = $7,720 (nominal, 2025 est.)

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