PARAGUAY LAW AND PRACTICE Contributed by: Manuel Arias, Carla Sosa, Martin Carlevaro, Milena Sljivich, Alexander Berkemeyer and Antonio Villa Berkemeyer, BKM - Berkemeyer
7. Foreign Investment/National Security 7.1 Applicable Regulator and Process Overview Foreign Investment/National Security Review Regime in Paraguay Paraguay does not have a specific foreign invest - ment or national security review regime that applies to FDI, but it does have a generally open and welcom - ing approach to foreign investment, with few restric - tions. The country aims to attract foreign investors by providing a favourable legal framework and various incentives. Relevant Authority While there is no dedicated authority for a national security review of FDI, the MIC and the BCP are the primary institutions involved in overseeing and facili - tating foreign investments. The Investment Promotion Agency also plays a significant role in promoting and Since there is no specific national security review regime, there are no particular types of FDI that are subject to such a review. However, certain sectors may have specific regulations or require additional approvals, such as telecommunications, banking and financial services, energy and natural resources, and defence and security. Exemptions for Foreign Investors Paraguay does not generally impose significant restrictions on foreign investors. However, certain exemptions and incentives are available to encour - age investment, including the following. • The Maquila Regime (Law 7547/2025) promotes production and export from Paraguay through tax and customs benefits, including duty-free import of inputs/machinery, a 1% tax on national added value/export invoice, and permits up to 10% domestic sales. It also supports service maquila abroad. • FTZs provide tax benefits and simplified customs procedures. supporting foreign investments. Types of FDI Subject to Review
• The New Fiscal Incentive Regime (Law No 7548/2025) establishes a modern framework of tax benefits for national and foreign investment, replacing Law No 60/90. It provides exemp - tions from customs duties, VAT on capital goods importation, INR on external financing and IDU for foreign investors, subject to specific conditions. Requirements, Process and Timeframes There is no formal notification requirement for most foreign investments, but investors may need to register their investment with the BCP for statistical purposes. For investments in regulated sectors, investors may need to obtain specific licences or approvals from rel - evant authorities (eg, telecommunications, banking). If investors seek to benefit from specific incentives, they must apply to the relevant authorities and meet the necessary criteria. The timeframe for obtaining sector-specific approvals or incentives can vary depending on the complexity of the investment and the efficiency of the relevant authorities. Generally, the process can take several weeks to a few months. In most cases, clearance is not required prior to making the investment, except for regulated sectors where specific licences or approvals are necessary. 7.2 Criteria for National Security Review General Criteria and Considerations The primary legislation governing foreign investment in Paraguay is Law 117/91 on Investments, which provides for equal treatment of foreign and domestic investors. Law 7548/2025 on the New Fiscal Incen - tives Regime for National and Foreign Investment offers various tax incentives to promote investment in specific sectors. Certain sectors may have restrictions or require spe - cial permits, such as telecommunications, banking, energy and natural resources, and the Constitution and specific laws impose restrictions on foreign own - ership of land in border areas. Investments in regulated industries may require approval from relevant regulatory bodies, such as the National Telecommunications Commission (CONA -
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