PARAGUAY LAW AND PRACTICE Contributed by: Manuel Arias, Carla Sosa, Martin Carlevaro, Milena Sljivich, Alexander Berkemeyer and Antonio Villa Berkemeyer, BKM - Berkemeyer
4. Corporate Governance and Disclosure/Reporting 4.1 Corporate Governance Framework Paraguay offers investors a wide range of corporate vehicles with different governance rules. The most common vehicles are as follows. Corporations (Sociedades Anónimas or SA) These are the most common type of companies in Paraguay. An SA is managed day-by-day by a board of directors, which can be composed of a sole director or of multiple directors (depending on the by-laws of the corporation), who are appointed by the sharehold - ers through an ordinary shareholders’ meeting. The corporation must also appoint a trustee ( síndico ), who is responsible for the supervision of the management and administration of the company. An SA requires at least two shareholders, whose par - ticipation in the corporation is represented and dis - tributed through shares. An SA can have an unlimited number of shareholders. Limited Liability Companies (Sociedad de Responsabilidad Limitada or SRL) In this type of company, the management, adminis - tration and representation of the company is granted to one or more managers, who may or may not be shareholders of the company. Trustees are optional in this type of company. When two or more managers are appointed, the same rules established for a corporation’s board of directors will apply. By default, the term of office of the manager is indefinite, and any change must be made through an amendment to the by-laws. The SRL’s capital is represented with quotas, and at least two quotaholders are required at all times in this company, with a maximum number of 25 members (ie, quotaholders). Simplified Joint Stock Companies (Empresa de Acciones Simplificadas or EAS) This fairly new type of corporate vehicle has been designed to simplify the incorporation and function - ing of a company. An EAS has no default governing
body; all governing functions are instead assigned to the EAS’s legal representative. Both a board of direc - tors and a trustee are therefore optional. The appoint - ment of the legal representative is done through the shareholders’ meeting. The EAS is the only type of company in Paraguay that allows a single shareholder. Shareholders in all of the above corporate vehicles may be either natural or legal persons, with or without residence in Paraguay. However, directors, managers, legal representatives and trustees must hold a Para - guayan residency permit or be Paraguayan. 4.2 Relationship Between Companies and Minority Investors While Paraguayan regulations historically offered limited specific protection for minority shareholders, the new Capital Markets and Products Law (Law No 7572/2025) significantly reinforces these safeguards. Therefore, it remains highly advisable to further regu - late the relationship between shareholders and minor - ity investors either within the by-laws or through a private shareholders’ agreement, to leverage these new protections. For example, the by-laws of a com - pany may create different classes of shares for each investor group and tie the share class with the right to appoint members to the board or to vote within the board. 4.3 Disclosure and Reporting Obligations Companies are required to declare their ultimate ben - eficial owners with the Directorate of Companies and Legal Structures and Ultimate Beneficial Owners. These reports must include the address, ID number, full name, shareholding percentage and profession of each shareholder. If the shareholders are legal persons, they are required to report the final natural person controlling the entity. The ultimate beneficial owner report must be updated once a year (if there are no changes) or within 15 working days after any change. The Capital Markets and Products Law (Law No 7572/2025) has also tightened disclosure and advertising requirements, enhancing transparency in the market. In addition, the shareholders’ information must be updated with the Tax Authority every time a change in the direct shareholders of the company takes place.
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