PARAGUAY LAW AND PRACTICE Contributed by: Manuel Arias, Carla Sosa, Martin Carlevaro, Milena Sljivich, Alexander Berkemeyer and Antonio Villa Berkemeyer, BKM - Berkemeyer
governmental bodies or even the President may be involved in the decision-making process. Law 1337/99 on National Defence and Internal Security allows the President to intervene in cases where national security is at risk. Foreign investors have the right to appeal decisions made by the regulatory authorities. Law 6715/21 on Administrative Procedures provides a framework for appealing administrative decisions, including those related to FDI. Appeals can be made to administra - tive courts or higher judicial bodies, depending on the nature of the challenge and the specific regulations involved. Law 879/81 on the Judicial Code outlines the process for appealing administrative decisions to higher courts. Consequences of Non-Compliance If an investment is made in a sector that requires prior approval without obtaining the necessary permits, the investment may be deemed illegal. For example, Law 642/95 on Telecommunications stipulates that operat - ing without a licence from CONATEL can result in fines and the revocation of operational rights. In severe cases, consequences can include the revocation of investment incentives and the obligation to repay previously exonerated taxes, including interest, sur - charges and fines, as stipulated by Law 7548/2025. Non-compliance with local laws and regulations after the investment is made can result in similar penal - ties, including fines, operational restrictions or forced divestment. Law 1015/97 on the Prevention of Money Laundering outlines penalties for non-compliance, including fines and operational restrictions. Continu - ous violations can lead to legal actions and potential expulsion from the market. Moreover, Law 195/93 on the Promotion of Competition allows for legal actions and market expulsion for continuous violations of competition laws.
foreign investment. It guarantees the protection of property rights, a free trade regime (production, com - mercialisation, pricing and import/export, with excep - tions), and an unrestricted free exchange regime. Law 117 also ensures an unrestricted free exchange regime for capital entry and exit, and for the remit - tance abroad of dividends, interest, commissions and royalties. Law 5542/15 on Guarantees for Investments and Pro - motion of Employment Generation and Economic and Social Development encourages investment in indus - tries and production activities in Paraguay, fostering job creation and economic development through added value to raw materials. An important benefit of Law 5542 is the possibility of a fixed income tax rate for up to ten years, extendable to 20 years depending on the sector and investment amount. In addition, if a company under this regime is sold or its shares trans - ferred, the obligations and benefits remain in effect for new purchasers throughout the project’s established period. Law 7548/2025 on the New Regime of Fiscal Incen - tives for National and Foreign Investment promotes national and foreign investment to boost production, generate formal employment and foster technologi - cal incorporation. This law offers key benefits such as exemption from customs duties on capital goods, Value Added Tax (IVA) exemptions and, in specific cases, exemption from INR on interest and fromIDU for significant investments. These benefits are time- limited and subject to compliance with investment project objectives and legal requirements. Acquisition of Rural Real Estate Located in the Border Security Zone There are no major restrictions on foreigners purchas - ing land in the country, except for those imposed by Law 2532/05, which establishes the border security zone of the Republic of Paraguay, and its amendment, Law 2647/05. According to Article 1 of Law 2532, the border security zone includes the 50 km strip adjacent to the land and river border lines on the side of the national ter- ritory. Article 2 specifically establishes that – unless
8. Other Review/Approvals 8.1 Other Regimes Investment Law
The Investment Law (Law 117/91) grants equal guar - antees, rights and obligations for both domestic and
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