PARAGUAY Law and Practice Contributed by: Juan Fiorio, Alejandra Corrales and Jean Saavedra, Fiorio, Cardozo & Alvarado
3. Changes in Control 3.1 Requirements for Acquiring or Increasing Control Over a Bank Transactions involving the integration, purchase, or transfer of shares in financial institutions are regulated by Resolution No 08, Act 51, dated 28 October 2021, issued by the Board of Directors of the BCP. According to this Resolution, transactions that exceed the threshold of 5% or more of the voting share capital in the company must be authorised by the Superintendency of Banks. To this end, an application for authorisation must be submitted, providing details of the resources used, which must be held within the banking system unless they are of a different nature, along with support - ing documentation verifying their origin. The Superintendency of Banks must issue a decision on the authorisation request within 30 calendar days from the moment the required documentation is completed. If this period elapses without a decision from the Superin - tendency of Banks, the request will be automati - cally rejected. The Superintendency of Banks may request at any time, regardless of the amount of the transaction or percentage of shares acquired or transferred, any additional information it deems necessary to verify the source of the funds. For calculating the threshold, each transaction or sum of current transactions will be consid - ered along with prior transactions, representing a direct or indirect holding or participation, either individually or jointly with affiliated parties, in a proportion equal to or greater than 5% of the voting capital in the supervised entity.
no third-party objections within that period, the Superintendency of Banks will submit an evalua - tion report with its favourable opinion for authori - sation and submit it to the Board of Directors of the BCP. Third Step The Board of Directors of the BCP will issue the resolution for the authorisation of the opening of the banking entity, ordering the registration of the by-laws, and setting a one-year deadline for the entity to commence operations. The legal representative of the entity must deposit the required minimum capital in a finan - cial institution within 48 hours of being notified of the resolution. For foreign entities seeking to open branches in Paraguay, the application must include certified and apostilled documents translated into Span - ish. These documents include: • the incorporation act of the head office and a resolution authorising the opening of the branch; • board of directors’ minutes indicating approv - al for the branch; • a power of attorney indicating the list of individuals authorised to manage the branch’s opening; • balance sheets, income statements, and annual reports for the last five years; • details of capital assigned to the branch; • service report determining solvency, manage - ment, and asset valuation; • authorisation from the supervisory body of the country of origin; • a risk rating granted by an international rating agency; and • a shareholder chain leading to the controlling natural person.
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