PARAGUAY Law and Practice Contributed by: Mauro Mascareño, Carlos Vargas and Rodrigo Gómez Sánchez, Mascareño Vargas – Asesores
7.7 Currency Control/Central Bank Approval There are no formal currency controls in Paraguay. M&A transactions involving a central bank-regulated entity may require central bank approval to ensure compliance with MLA regulations. 8. Recent Legal Developments 8.1 Significant Court Decisions or Legal Developments In the past three years, Paraguay has not experienced significant court rulings related to M&A in general, nor in the technology sector in particular. Although there is no specific regulation addressing this topic, three laws could potentially strengthen or facilitate M&A in the technology sector. • Law No 6822/2021: This law, which came into effect in 2022, regulates electronic signatures and documents, granting them the same legal valid- ity and effectiveness as handwritten signatures. It establishes a legal framework for the use of electronic signatures in both the public and private sectors, simplifying regulations by removing the previous distinction between electronic and digital signatures. • Law No 6925/2022: This law promotes the use of electric transport in the country by providing incen- tives. It encourages the adoption of electric vehi- cles in both the public and private sectors through tax exemptions, and facilitates their importation. Additionally, it supports the development of nec- essary infrastructure, such as charging stations, and strengthens public policies aimed at reducing dependence on fossil fuels and decreasing carbon emissions. Given the rise of electromobility, which is typically managed by technology companies, a significant increase in operations under this law is anticipated, potentially impacting M&A activities. • Law No 6380/2019: Although it has been in effect since 2020, this law allows for certain corporate reorganisations to be conducted tax-free, which may also influence M&A activities.
CONACOM’s Powers CONACOM has extensive powers to review, approve, conditionally approve or block a transaction based on its potential impact on competition. During its review process, which typically lasts 60 to 120 days, CONA- COM can: • request additional information – the commission may require further documentation or analysis to evaluate the transaction’s competitive impact; • impose conditions – if the transaction raises competition concerns, CONACOM can impose remedies, such as asset divestitures or other behavioural conditions, to mitigate anti-competitive effects; and • block the transaction – in cases where no remedy sufficiently addresses the anti-competitive issues, CONACOM has the authority to block the deal outright. It is crucial that parties comply fully with CONACOM’s requirements. Failure to file within the required period, or to comply with the imposed conditions, could result in penalties or even a reversal of the transaction. 7.6 Labour Law Regulations In Paraguay, employers must comply with several fun- damental labour law regulations: • minimum wage – employers are required to follow the government’s legal minimum wage; • severance pay – employees who are terminated without cause are entitled to receive half a month’s wage for every year of service; • notice period – employers must give notice before terminating an employee, with the notice period ranging from 30 to 90 days, depending on the length of the employee’s service; • social security contributions – employers must contribute 16.5% of the gross monthly salary towards pensions and healthcare; and • vacation entitlement – employees are entitled to 12 to 30 days of paid annual leave, depending on their length of service. There are no works councils, but labour unions are becoming increasingly rare.
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