Paraguay Excluded from New U.S. Tariffs: A Strategic Opportunity to Structure Your Company in 2026

• Executive Summary: The U.S. administration has activated a new set of import duties ranging from 10% to 12.5% on 60 trading partner nations, based on USTR investigations into forced labor.
• The Mercosur Factor: Regional giants like Brazil and Argentina have been penalized, remaining fully exposed to this loss of export competitiveness in the North American market.
• The Guaraní Advantage: Paraguay is completely off the list of restrictions, consolidating itself as a safe haven and a low-tax jurisdiction optimal for manufacturing and global export.
• Direct Action: This situation incentivizes the relocation of international production units under Paraguayan preferential regimes to mitigate geopolitical risks.

Paraguay’s macroeconomic and legal stability once again positions the country in a privileged situation on the global trade map. The recent decision by the U.S. government to apply extraordinary import duties to a large portion of its main commercial suppliers has caused a financial earthquake.

While Brazil and Argentina suffer the direct impact of these tariff barriers, Paraguay remains in a position of absolute competitive advantage.

This is no coincidence. It is the result of a sustained policy of alignment with global standards and internal stability.

The Reconfiguration of Regional Trade: Paraguay as a Safe Haven

The Office of the United States Trade Representative (USTR) has been clear. The new scheme seeks to pressure countries to tighten their labor and import regulations. The major industrial powers and intermediaries in the region have failed to avoid the sanction.

For an international businessman producing in South America with an eye on the global market, operating from traditional platforms has become expensive and complex to manage.

“This measure applies to the United States’ main trading partners, selectively leaving out jurisdictions that offer a framework of strict compliance and cost predictability, as is the case with Paraguay.”

What does this mean in practical terms? A finished or semi-finished product in Brazilian or Argentine territory will immediately face an entry surcharge of 10% to 25% at U.S. customs. The same product, processed or assembled in Paraguay, will enter free of this temporary duty.

Let’s analyze the disparity in the actual tax impact between the three partners of the commercial bloc:

How does this measure impact your company’s structuring?

If your goal is international tax optimization and physical production or services, the option to set up a company in Paraguay under the Maquila or Law 60/90 figures becomes more relevant in the current context.

The Maquila allows you to import raw materials, process them locally with some of the lowest energy costs in Latin America, and export the final product with a single tax of 1% on the value added in national territory. Now, thanks to the U.S. tariff exemption, the operating margin difference compared to neighboring countries is unbeatable.

Furthermore, the tax system in Paraguay is governed by the principle of territoriality. Income generated outside the country is exempt from local taxation. This facilitates the design of efficient holdings where the Paraguayan operational subsidiary distributes profits to the parent company or international partners with minimal tax costs.

The ParaguayWay Analysis: How to Capitalize on This Tariff Scenario

In the field of international corporate consulting, timing is everything. This tariff juncture represents a narrow window for those operations directors and family offices seeking to diversify their geographical risk in South America.

Last week, a German client with an electronic component assembly plant in southern Brazil came to our offices with an urgent concern. Their export margins to Texas were about to collapse due to the new U.S. customs policy implemented on Brazilian products.

Through a comprehensive analysis, we mapped their strategic relocation to eastern Paraguay. In less than 45 days, we began their registration process through the simplified company opening system of the Ministry of Industry and Commerce – MIC, managed their residency in Paraguay for their key engineering team, and structured a corporation under the Maquila regime. The result is direct: their net margin has increased by bypassing the U.S. entry duty and reducing their global corporate tax burden from 34% to a 1% single tax on maquila billing.

What stops other businessmen from doing the same? Usually, the lack of a reliable local network that masters both the tax regulatory framework and relocation logistics.

The Path to Securing Your Supply Chain

To take advantage of this legislative and customs edge, your business arrival process must be executed without technical errors that could compromise the attainment of Paraguayan origin benefits.

1. Focused Corporate Constitution: You must choose between an S.A., an S.R.L., or an E.A.S. adapted to Mercosur origin regulations to ensure your products genuinely benefit from the exemptions.
2. Economic Substance Compliance: It is essential to have physical offices, hired local staff, and real operational processes to avoid international control agencies classifying the structure as a mere shell company.
3. Residency and Identity Card: Obtaining legal Paraguayan documentation will allow you to operate corporate and personal bank accounts smoothly, as well as consolidate your tax residency status to mitigate taxes in your home country.

The current situation demonstrates that small countries with clear and stable tax frameworks become the greatest beneficiaries of international trade tensions.

If you manage a global commercial structure or seek to protect your family wealth from European or regional fiscal instability, let’s analyze your relocation case without obligation to provide you with the exact legal and corporate roadmap you need to operate with peace of mind from Asunción.