PARAGUAY Law and Practice Contributed by: Mauro Mascareño, Carlos Vargas and Rodrigo Gómez Sánchez, Mascareño Vargas – Asesores
8. Recent Legal Developments 8.1 Significant Court Decisions or Legal Developments In the past three years, Paraguay has not expe- rienced significant court rulings related to M&A in general, nor in the technology sector in par- ticular. Although there is no specific regulation address- ing 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 validity and effectiveness as handwritten signatures. It establishes a legal framework for the use of electronic signatures in both the public and private sectors, simplifying regu- lations 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 incentives. It encourages the adop- tion of electric vehicles in both the public and private sectors through tax exemptions, and facilitates their importation. Additionally, it supports the development of necessary infrastructure, such as charging stations, and strengthens public policies aimed at reducing dependence on fossil fuels and decreasing carbon emissions. Given the rise of elec- tromobility, which is typically managed by technology companies, the authors anticipate a significant increase in operations under this law, 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. Overall, while specific M&A regulations may be limited, these laws provide a supportive frame- work that could enhance activities in the tech- nology sector. 9. Due Diligence/Data Privacy 9.1 Technology Company Due Diligence In Paraguay, data privacy legislation is scarce and limited mostly to credit scoring data. Further, public companies can provide necessary due diligence information to potential bidders. However, the board of directors must ensure that the information disclosed is not prejudicial to the company’s interests and does not provide undue advantage to any bidder. The same level of information must be provided to all bidders, and financial statements, corpo- rate governance details and operational informa- tion must be shared. Due diligence often includes a review of technol- ogy infrastructure, intellectual property and data privacy policies, as well as compliance with local regulations. 9.2 Data Privacy Paraguay still lacks a comprehensive data pri- vacy law; however, some general privacy prin- ciples are included in Law No 6534/20. Com- panies that handle sensitive or personal data must take appropriate measures to protect that information during the due diligence process. Disclosing personal data without the individuals’ consent can lead to legal challenges, particularly in sectors like fintech, where the handling of per-
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