PARAGUAY TRENDS AND DEVELOPMENTS Contributed by: Federico Valinotti, Andrés Nasser, Álvaro Rojas, Vivian Maldonado and Juan Manuel Ros, BKM - Berkemeyer
operations. These measures are intended to reinforce nearshoring strategies and support Paraguay’s com - petitiveness in regional value chains. Replacing the historic Law 60/90, Law No 7548 introduces a broad-based tax incentives regime for domestic and foreign investment. Exemptions include customs duties and VAT on imports and local pur - chases of capital goods and inputs used directly in production. Large projects may receive exemptions on interest from external financing and dividends generated by the projects, with thresholds designed to catalyse capital formation. The law also facilitates first transfers among beneficiaries, enables guaran - tee trusts over benefitted assets, and provides for a general 20-year term with potential partial extensions. Tourism and entertainment projects above specified minimums receive tailored incentives, anchoring sec - toral development. Complementing the industrial package, Law No 7467 creates a framework for hosting international sport - ing events by granting tax exemptions, administra - tive facilitations and protections for trade marks and audiovisual rights. It provides for the temporary duty- free admission of equipment, possible exemptions on income and VAT related to event activities, expedited visas, and arbitration options. This enhances Para - guay’s ability to host high-profile competitions and related events, reinforcing the country’s services and branding strategy. Arbitration modernisation On 23 September 2025, Law No 7561/2025 on Arbi - tration (the “Law”) was promulgated and published, comprehensively modernising Paraguay’s arbitral regulation. The text aligns with international stand - ards based on the UNCITRAL Model Law, strengthen - ing the independence of arbitration and the tribunal’s competence to rule on its own jurisdiction (Kompe - tenz-Kompetenz), limiting judicial intervention, and enhancing the legal certainty of arbitral proceedings. Lapproved draft law include the following. The scope of arbitration is expanded beyond that contained within Law No 1879/2002 “On Arbitra - tion and Mediation”, and now covers any dispute
of patrimonial and transactable content, as well as those authorised by law or international treaties. Indi - vidual employment disputes are expressly excluded. The new text expressly includes succession arbitra - tion and professional sports arbitration, and allows the State and its entities (as well as State-owned or State-participated companies, in certain cases) to use arbitration in certain cases, under rule of law and the principle of publicity. The new law expressly recognises the legal validity of electronic communications and data messages for arbitration agreements, notices and proceedings, including the valid receipt of electronic communica - tions in the proceedings. A significant advance is the express prohibition of undue judicial intervention, classified as judicial mis - conduct, reaffirming arbitral tribunal autonomy. Judi - cial intervention is limited to cases expressly provided by law, including co-operation in interim measures, evidence and award enforcement. The Law introduces innovations that strengthen the transparency, consistency and simplification of arbi - tral proceedings, including: • the express or tacit waiver of arbitration; • the extension of the arbitration agreement to non- signatories in case of active participation or direct benefit; • the formal acceptance and constitution of the arbitral tribunal within specific time limits, and the possibility of reconsideration of non-final decisions by the same tribunal; • the refund of arbitrators’ fees in cases of resigna - tion, removal or award annulment; • the interruption of the statute of limitations upon request notification to the other party or its submis - sion before the arbitral institution agreed by the parties; and • the use of virtual hearings and technology for evi - dence. The new regime broadens the powers of the arbitral tribunal to issue interim measures directly, including those aimed at preserving the status quo, prevent - ing imminent harm or ensuring award effectiveness. It
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