In September 2025 Paraguay replaced the two laws that defined its investment pitch for thirty years. Here is what Law 7548 and the new maquila law give, how approval and monitoring work, what happens to existing projects, how Mercosur rules frame it all — and how to choose.
On 8 September 2025 Paraguay promulgated three laws in one package: Law 7548, a new regime of tax incentives for investment; Law 7547, a new maquila law; and Law 7546 for electronics assembly. Together they replace the two instruments that had defined Paraguay’s pitch to investors for three decades — Law 60/90 on investment incentives and Law 1064/97 on maquila.
The headline numbers did not move much. Capital goods still enter without duty or VAT, the maquila single tax is still 1%, and the US$13 million threshold for dividend and interest exemptions is the same as before. What changed is the machinery around them: who can apply, what counts as an investment, how projects are monitored, what happens when a company falls short, and how long benefits last. Tourism is covered for the first time, services maquila is written into the law, and both regimes now have a 20-year ceiling.
For a foreign investor the practical question is not “what is new” but “which regime fits my business, and what will it cost me to stay compliant”. This guide answers both, regime by regime, and closes with a decision table.
Law and practice: Law 7548/2025 (promulgated 8 September 2025, in force 9 September 2025); Law 7547/2025 (same dates); Law 7546/2025.
Law 7548 repeals Law 60/90 in full (art. 34). Projects already approved under the old law keep the rules of their original resolution, but renewals, complementary investments and transfers of goods now follow the new rules (art. 35). New projects apply under Law 7548 only.
| Law 60/90 (until September 2025) | Law 7548/2025 | |
|---|---|---|
| Status | Repealed in full by Law 7548, art. 34 | In force since 9 September 2025 |
| Import duties on capital goods | Exempt | Exempt, plus raw materials used to build capital goods for the project |
| VAT on capital goods | Exempt | Exempt on imports and local purchases; also on transfers between beneficiaries |
| Interest to foreign lenders (INR) | Exempt above US$13 million | Exempt above US$13 million, for the term of the financing |
| Dividends (IDU) | Exempt for 10 years above US$13 million | Exempt for 10 years from first dividends above US$13 million, with an anti-haven condition |
| Tourism and entertainment | Not covered | Capital goods exempt for projects from US$20 million |
| Monitoring | Light | Sworn reports, random audits by lottery, a graded revocation scale |
| Projects already approved | — | Keep the rules of their original resolution (art. 35) |
Three features stand out. First, there is no corporate income tax reduction: the regime relieves taxes on what you buy (capital goods) and on what you pay out (interest and dividends), not on what you earn. Second, there is no general minimum investment, sector list or regional quota in the law itself; the Investment Council decides on alignment with “strategic sectors” defined by regulation. Third, the two big exemptions — on interest remitted to foreign lenders and on dividends — still need an investment of at least US$13 million, and projects cannot be combined to reach it.
The dividend exemption has a new condition worth reading twice. For non-resident investors it applies only if the money does not come from a low- or no-tax jurisdiction, or if the dividend tax could not be credited in the investor’s home country anyway. The purpose is to stop the exemption simply shifting tax from Paraguay to another treasury.
Law and practice: Law 7548/2025, arts. 4, 14–18, 32, 34–35. Amounts can be updated by decree in line with inflation (art. 32).
Applications are filed online with the Ministry of Industry and Commerce (MIC) as sworn statements, under Decree 5432/2026. The applicant must be on the MIC Industrial Register or the register of service providers. The file contains a technical sheet, the location, an environmental impact declaration, the amount and sources of financing, a dated schedule up to start-up, and technical and economic studies. Above US$13 million, registered Paraguayan consultants must prepare the project.
Online, in Spanish or with certified translation; the clock starts only when the file is complete.
MIC, Finance, Agriculture, Labour, the Central Bank, the tax authority (DNIT), the business federation and the investment agency; monthly sessions.
Within 60 calendar days of a complete file; non-binding.
MIC and Finance within 15 days; silence means refusal.
Within the resolution’s schedule, with one extension of up to a year.
Online, semi-annually (or quarterly for short schedules), within 10 days of each period.
Several rules decide what qualifies. Goods bought more than six months before the application are out. Imported machinery must be at most five years old unless certified. Pre-application spending counts within 24 months for land and civil works and 36 months for patents and software. The decree also introduces an employment benchmark — the previous year’s average jobs per US$50,000 of benefited investment — and projects below it must show other quantifiable contributions.
A national-supply test applies: if a functionally compatible good is made and actually supplied in Paraguay by a registered manufacturer, the import exemption for that good can be refused. Investors bringing in standard equipment should check the MIC Industrial Register before they budget.
Law and practice: Decree 5432/2026, arts. 2–15 and 23; Law 7548, arts. 8–13 and 31.
The 2025 law is much stricter on follow-up than Law 60/90 was. Goods must be used only for the project, recorded in the fixed-asset schedule and kept for at least five years; selling them earlier means paying all the exempted taxes. The MIC draws beneficiaries for inspection by lottery every quarter, on top of desk monitoring of the periodic reports.
Total revocation
Selling benefited goods in breach of the holding period, using them outside the project, or ignoring corrective measures.
Partial revocation
Investment executed below 50% of plan: 50% revoked between 40% and 50%, 75% between 25% and 40%, total below 25%.
Undeclared location
Moving the investment without filing within 30 days.
Consequence
The exempted taxes become due with interest, surcharges and fines, as a specially privileged tax debt.
The law calls revocation “restoring legality”, not a sanction, but the effect is the same: a tax bill for everything that was exempted. Projects that change scope mid-way should file the change before the inspector finds it.
Law and practice: Law 7548, arts. 16, 20–29; Decree 5432/2026, arts. 24 and 26.
Maquila is Paraguay’s most successful industrial policy. A maquiladora processes, assembles or services for a parent abroad, imports inputs under temporary admission and pays a single 1% tax instead of corporate and dividend taxes. In 2025 maquila exports reached a record US$1.31 billion — about 70% of Paraguay’s industrial exports — with 35,357 jobs; by July 2026 jobs were near 39,000 and exports were running 26–28% ahead of the year before.
| Feature | Law 7547/2025 |
|---|---|
| Who | Paraguayan or foreign companies and sole proprietors domiciled in Paraguay, working under a contract with a parent abroad |
| Forms | Pure maquila, idle capacity, submaquila, subcontract, shelter; goods and services |
| Tax | A single 1% on the greater of value added in Paraguay or the export invoice value; filed monthly, even when nil |
| Exempt | Import and export taxes on contract goods; IRE, IDU and INR on maquila income |
| Domestic sales | Pure maquilas up to 10% of the previous year’s export volume, after nationalising inputs and paying taxes |
| Temporary admission | Raw materials 12 months, extendable once by up to 12; machinery while the programme lasts |
| Start and term | Operations within 18 months of approval; benefits up to 20 years, renewable |
| Sanctions | Warnings, fines of 50–100 monthly minimum wages, suspension, cancellation |
The tax base deserves attention. The 1% applies to the greater of the value added in Paraguay (local goods and services, wages with social security, depreciation and the maquila fee) or the export invoice value. A company with a large invoice and little local value pays on the invoice. The return is monthly, including months with no exports.
Law and practice: Law 7547/2025, arts. 3–5, 11–18, 33, 37–39; Decree 5714/2026; MIC maquila reports (2025 annual, July 2026).
Services maquila in the law
Services used abroad by a client not present in Paraguay, delivered remotely: BPO, contact centres, software. A company can hold goods and services programmes at once.
Five forms
Pure, idle-capacity (an existing company exporting spare capacity), submaquila, subcontract and shelter, where the foreign supplier provides technology and materials.
20-year term
Benefits now last up to 20 years from approval, renewable; under the old law there was no maximum.
Bigger commission
The tax authority (DNIT) and the Labour Ministry joined the national maquila council (CNIME).
Digital operations
Applications, current accounts and transfers between maquiladoras run on an electronic platform; IFRS accounting is required.
VAT refunds
Maquilas can recover input VAT as exporters; for services maquilas the refund is capped at a small percentage of the base.
Services maquila is the part most foreign entrepreneurs miss. Paraguay charges 10% VAT on services performed in the country even when the client is abroad. A services maquila programme is the main legal route around that, and it replaces 10% corporate tax with the 1% single tax. It requires a contract with a foreign principal, approval by CNIME and the monthly filing discipline — worth it for a team, rarely for a freelancer.
Existing maquila programmes applied Law 1064/97 in full for twelve months after the new law and then migrated automatically, around September 2026, without a new filing. They keep temporary admissions, guarantees and current-account balances, and their indefinite term is preserved. Only the provisions of the old law that conflict with the new one have lapsed; the rest of Law 1064/97 is not formally repealed.
Law 60/90 projects keep the conditions of their original biministerial resolution for the investment already approved. Anything new — an expansion, a complementary investment, a transfer of benefited goods — is handled under Law 7548. Investors with old resolutions should map which assets sit under which regime before the next audit, because the reporting and revocation rules differ.
Law and practice: Law 7547, art. 42; Law 7548, art. 35. Some summaries describe Law 1064/97 as repealed outright; the text provides for automatic migration and partial repeal.
| Regime | What it gives | Changed in 2025? |
|---|---|---|
| Investment guarantees (Law 5542/2015) | Contract with the State: income tax stability for up to 10 years from start-up, 15 years from US$50 million, 20 years from US$100 million in industry; requires an S.A. | No, but its references to Law 60/90 now point to a repealed law |
| Free zones (Law 523/1995) | Single 0.5% tax on sales to third countries; up to 10% of sales into Paraguay | No |
| Electronics assembly (Law 7546/2025) | Reduced effective VAT on inputs (1.5%) and finished goods (4.5%) with at least 20% local value added | New; regulation pending in mid-2026 |
| Automotive regime (Law 4838/2012) | Duty-free capital goods and inputs, reduced VAT base for chapter 87 | No |
| Raw materials regime (Decree 11771/2000) | 0% duty on non-Mercosur inputs not produced locally | No; Mercosur cover runs to 2030 |
| Investment law (Law 117/1991) | National treatment, free remittances, arbitration | No |
| Public-private partnerships (Law 7452/2025) | Contracts up to 40 years, lender step-in | Replaced Law 5102/2013 in January 2025 |
The investment guarantee law is the one to combine with Law 7548 for large projects. It locks the income tax rate by contract and reduces the rate on profit remittances by 1% per 100 direct jobs, up to half. It requires an S.A. and an annual fee, and its cross-references to Law 60/90 now need careful legal reading.
Most maquila output goes to Mercosur: 82% in 2025, with Brazil alone taking 64%. That trade depends on two Mercosur concessions. Paraguay may use up to 60% non-Mercosur materials and still certify Mercosur origin until 31 December 2038 (Brazil and Argentina have a 45% limit). And the special import regimes behind maquila — temporary admission, the raw materials regime and Paraguay’s national exception list — are authorised until 2030.
The automotive sector is the exception: it sits outside Mercosur free trade, and Paraguayan auto parts reach Brazil under a bilateral agreement signed in 2019 after Brazil’s customs began charging the common external tariff on them. Auto parts were 32% of maquila exports in early 2026; investors in that segment should track the bilateral terms, not just Mercosur rules.
Law and practice: Mercosur CMC Decision 6/23 (Paraguay’s origin regime to 2038), internalised by Brazil in 2024; special import regimes extended to 2030 in December 2021. See also our guide to selling into Brazil.
Early data suggest the new investment regime has not slowed demand. From January to May 2026, 88 projects were approved under Law 7548 — 24% more than a year earlier — with US$323 million of projected investment. Most of it is Paraguayan capital: foreign capital fell 7%, and projected jobs fell 39%, which may reflect the new employment benchmark or simply a more capital-intensive mix, led by a US$97.5 million glass-container plant.
Maquila keeps growing: 49 new programmes approved by mid-September 2026, exports above US$1 billion by August and a target of about US$1.5 billion for the year. The regime has also broadened beyond auto parts and textiles into aluminium, beverages and services.
Law and practice: MIC monthly reports on investment incentives (May 2026) and maquila (July 2026); CNIME statements reported by La Nación, 14 September 2026.
| Your business | Usually the best fit | Why |
|---|---|---|
| Factory selling mostly to Paraguay | Law 7548 | Capital goods without duty or VAT; ordinary 10% IRE on profit |
| Factory exporting to Brazil or Argentina | Maquila (Law 7547) | 1% single tax instead of 10% IRE plus IDU; temporary admission of inputs |
| Large project with foreign financing and dividends | Law 7548 above US$13 million, possibly with Law 5542 | No INR on interest, no IDU on dividends for 10 years, rate stability |
| Remote services for foreign clients (BPO, software, contact centre) | Services maquila | 1% single tax and a route around 10% IVA on exported services |
| Re-export trading hub | Free zone | 0.5% on sales to third countries |
| Small service company | Ordinary regime | 10% IRE, little paperwork; incentives cost more to run than they save |
Two warnings apply to every option. Incentives carry a compliance cost — reports, audits, an external tax auditor certifying conditions — that can outweigh the saving for small projects. And Paraguay’s ordinary regime is already light: 10% corporate tax, 10% VAT, 8% or 15% on dividends and no tax on remitting money abroad. For many foreign companies the right incentive is no incentive at all.
Mostly abroad points to maquila or a free zone; mostly in Paraguay points to Law 7548 or the ordinary regime.
US$13 million unlocks the dividend and interest exemptions; US$50 million longer stability under Law 5542.
Machinery favours Law 7548; inputs favour maquila or the raw materials regime.
If not, the ordinary regime is safer than a benefit you might lose.
Law 7548/2025, promulgated on 8 September 2025, which repealed Law 60/90 and created a new regime of tax incentives for national and foreign investment.
Duty and VAT exemption on capital goods, and for investments of at least US$13 million an exemption from tax on interest paid to foreign lenders and from dividend tax for 10 years. Large tourism projects from US$20 million are also covered.
No. It exempts taxes on capital goods, interest and dividends, not the 10% IRE on profits.
They keep the rules of their original resolution; new investments, expansions and transfers follow Law 7548.
A single 1% tax on the greater of the value added in Paraguay or the export invoice value, replacing IRE, IDU and INR on maquila income.
Yes. Law 7547/2025 expressly covers services used abroad by clients not present in Paraguay, such as BPO, contact centres and software.
A pure maquila can sell up to 10% of the previous year’s export volume in the local market, after nationalising the inputs and paying the taxes.
Paraguay may use up to 60% non-Mercosur materials until 31 December 2038; the special import regimes are authorised until 2030.
Mercosur origin, maquila and when you need a Brazilian company.
Where services maquila fits.
Tell us what you will build or export, where you sell and how much you invest. We compare Law 7548, maquila, free zone and the ordinary regime on your numbers — fixed quote within one business day.
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