Setting Up a Company in Paraguay in 2026: The Maquila Record and Your Opportunity to Pay Only 1% in Taxes
Setting up a company in Paraguay has become the smartest decision for international entrepreneurs looking to diversify their production and optimize their tax burden. The latest official figures reveal a historic milestone: exports under the maquila regime have exceeded 1 billion dollars in the first eight months of the year, recording a growth of 26%. This dynamism is no coincidence; it is the direct result of a legal framework designed specifically to protect and empower private foreign capital.
- 1% Unique Tax: The maquila regime operates under a single tax on the value added within national territory.
- Sustained Growth: A 26% year-on-year increase that consolidates Paraguay as the industrial hub of South America.
- Real Diversification: Proven success in sectors ranging from textiles and automotive parts to technology and plastics.
- Zero Tariffs: Tariff-free imports for raw materials and machinery destined for the production process.
Why Does Paraguay’s Industrial Boom Benefit Your Assets?
Many European and North American investors associate offshoring solely with Asia. They are mistaken. Paraguay offers substantially lower operating costs, the cheapest hydroelectric energy in the region, and macroeconomic stability that many G20 countries would envy. The 26% increase in industrial exports demonstrates that global supply chains are choosing Asunción and its development zones to install their operational bases.
What does this mean for you? Legal certainty. When a sector grows at a double-digit rate consistently, the rules of the game are strengthened. The Paraguayan government takes care of its investors because it understands that foreign direct investment is the engine of its national development.
Tax Comparison: General Regime vs. Maquila Regime
To understand the real impact on your bottom line, it is essential to compare the two main business constitution paths we manage at ParaguayWay. Although taxes in Paraguay are already extremely low in their general regime (with a maximum rate of 10%), the maquila reduces this equation to the minimum legal limit.
| Tax Concept | General Regime (IRE) | Special Maquila Regime |
|---|---|---|
| Income Tax (Nominal Rate) | 10% on net income | 1% (Unique Maquila Tax) on the value of the export invoice or service rendered. |
| Import Tariffs | Variable according to Mercosur origin | Tariff suspension (0%) for machinery and raw materials. |
| VAT (Value Added Tax) | 5% or 10% depending on activity | Exempt for export operations. Recovery through tax credits. |
| Dividend Repatriation | Subject to withholding (IDU) | Exempt from any additional tax when transferred abroad. |
How the Paraguayan Maquila Mechanism Works
The scheme is technically simple but requires impeccable legal structuring. A parent company (located in Spain, the USA, or any other country) contracts a maquila company in Paraguay to manufacture, assemble, or provide intangible services. All raw material or technology temporarily imported for this purpose enters the country under tariff suspension.
Article 30 of the Paraguayan Maquila Law guarantees that no tariff rates or import restrictions will apply to inputs consigned by the foreign parent company, provided they leave the country again transformed into export products or services.
Did you know this regime also applies to digital services? That’s right. You don’t need chimneys or giant industrial warehouses. If you have a software agency, a technology development center, or an international consulting firm, you can operate under the service maquila scheme, invoicing with an effective tax cost of 1%.
The Expert Perspective from ParaguayWay: The Maquila Boom
Our experience in the field tells us that while theory is one thing, practice requires real support. The flood of applications to the Council of Export Maquila Industries has put pressure on certain administrative procedures in public offices. Obtaining approval for the maquila program requires surgical precision in the drafting of the technical investment project.
Last week, a client from the technology sector based in Germany came to us after trying to process their application on their own. Their request was blocked due to discrepancies in the tariff classification of the servers they planned to import temporarily. Thanks to our 360º service, we restructured the operational plan, corrected the technical observations, and achieved approval for the maquila program in record time. Furthermore, we streamlined their process to obtain residency in Paraguay, allowing the CEO to move his family directly to Asunción.
Key Requirements to Successfully Incorporate Your Maquila
If you are evaluating this business option for the year 2026, you must be clear about the initial steps so as not to waste time or resources on local bureaucracy:
- Incorporation of the local company: We typically recommend a Paraguayan S.A. or S.A.S. structured with foreign capital.
- Submission of the Maquila Program: Formal presentation of the industrial or service project to the Ministry of Industry and Commerce.
- Real Guarantee or Surety Bond: To guarantee the temporary import of assets under zero tariffs before the Paraguayan Customs.
- Operational and Environmental Permits: Compliance with current local regulations according to the production sector.
Does it sound complex? It is if you walk alone. However, for an entrepreneur with global operations, delegating this fiscal and corporate engineering to local professionals is the only way to ensure successful implementation without interfering in the day-to-day business.
The 26% growth in exports demonstrates that Paraguay is no longer a well-kept secret. Large multinationals are expanding their production lines here. The window of opportunity remains open for medium-sized companies and family offices looking to mitigate the suffocating fiscal environment of their home countries.
If you wish to analyze the viability of your industrial or technological project under this advantageous regime, let us analyze your relocation case without commitment and design a solid and efficient tax structure for your business in Paraguay.