PARAGUAY Law and Practice Contributed by: Mauro Mascareño, Carlos Vargas and Rodrigo Gómez Sánchez, Mascareño Vargas – Asesores
ally include a guarantee or a high penalty clause, also typically allow shareholders to withdraw if a better offer arises, but only after paying a break-up fee or similar. This provision for better offers can be seen as an opportunity for shareholders, adding a sense of optimism to the market. 6.13 Securities Regulator’s or Stock Exchange Process If a competing offer is announced, whether the initial offer will be terminated or further evaluated depends solely on the conditions accepted by the sharehold- ers. There are no specific regulations governing this situation, and it is based entirely on the agreement of the parties involved. All bonds or securities in the market must be cancelled before the company can withdraw from public offering. 6.14 Timing of the Takeover Offer Takeover offers can be extended in Paraguay, provid- ed the target company and the sellers agree. To avoid delays, it is recommended to seek regulatory approval before launching the offer, but in general, transactions tend to be communicated after the offer is made. 7. Overview of Regulatory Requirements 7.1 Regulations Applicable to a Technology Company Establishing and running a new technology company in Paraguay is governed by general corporate regula- tions. However, there are no specific regulatory bodies exclusively dedicated to overseeing the tech sector. Nonetheless, certain areas, such as telecommunica- tions and fintech, relating to loan concessions and electronic wallets, are regulated by entities like the National Telecommunications Commission ( Comisión Nacional de Telecomunicaciones CONATEL) and the Central Bank of Paraguay ( Banco Central del Para- guay BCP). Obtaining permits from these entities may take two to four months. Further, they might be subject to assess- ment by the finance intelligence unit ( Secretaría de
Prevención de Lavado de Dinero o Bienes SEPRE- LAD). 7.2 Primary Securities Market Regulators The primary securities market regulator in Paraguay is the SIV, which depends on the BCP, and the Anti- trust Commission ( Comisión Nacional de la Compe- tencia CONACOM), which oversees M&A transactions involving public and private companies. 7.3 Restrictions on Foreign Investments There are no significant restrictions on foreign invest- ments in Paraguay. Foreign direct investment filings are not mandatory, and no suspensory requirements exist. 7.4 National Security Review/Export Control Paraguay does not have a formal national security review process for acquisitions, and there are no spe- cific restrictions on investments from certain regions. However, there is a ban on nationals of the countries bordering Paraguay (Bolivia, Brazil and Argentina) acquiring land within a 50-km radius of the Para- guayan border. 7.5 Antitrust Regulations In Paraguay, antitrust regulations are governed by Law No 4956/13 on the Promotion of Competition, and CONACOM is the authority responsible for overseeing these matters. Filing Requirements A filing with CONACOM is required for takeover offers or business combinations that meet the fol- lowing threshold: the combined turnover of the parties involved must currently exceed around USD35,000,000, updated annually according to Para- guay’s minimum wage. When the Filing Must Be Made The filing must be submitted within ten days after the transaction is executed. Unlike other jurisdictions where filings are required before closing, Paraguayan law allows the transaction to be completed first, with the obligation to file for antitrust approval within this post-transaction window.
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