Paraguay

Paraguay is a founding member of the Southern Common Market (Mercosur) trading bloc. Alongside Argentina, Brazil, and Uruguay, it has a combined GDP of more than $2.9 trillion, making it one of the largest economic blocs in the world. The bloc trades with associate members such as Bolivia, Chile, Colombia, Ecuador, Guyana, Peru, and Suriname. Deals with the European Union are expected in the coming years, which would help to unlock significant revenue streams and a market of more than 500 million people, with a combined GDP of $19.1 trillion ($38,370 per capita).

Economic Growth

As of 2019, Paraguay’s economy is worth close to US$30 billion, with the county expected to perform well in the coming years. Paraguay saw a contraction in 2012, but since then the country has been in recovery. Production of agricultural goods and services has increased to record levels, and an increase in exports, particularly beef. According to the Central Bank of Paraguay, Paraguay saw growth of around 4.2% in 2018 alone, making it one of the fastest-growing economies in terms of GDP during the period. Trading Economics suggests that Paraguay’s GDP growth will hit 6.3% in 2020, and government debt will fall in the same period.

Growing Middle Class in Paraguay

With a population of around 7 million people, Paraguay offers a strong market for businesses looking to sell in the country. Around 48% of its population is economically active, and the middle class has grown more than 45% in recent years, now representing around 25% of the total population (around 1.75 million people). For businesses operating in the luxury goods and services market, this represents unique opportunities, as consumers have higher levels of disposable income and provide higher demand levels than other developing LATAM markets.

With a population of around 7 million people, Paraguay offers a strong market for businesses looking to sell in the country. Around 48% of its population is economically active, and the middle class has grown more than 45% in recent years, now representing around 25% of the total population (around 1.75 million people). For businesses operating in the luxury goods and services market, this represents unique opportunities, as consumers have higher levels of disposable income and provide higher demand levels than other developing LATAM markets.

Ease of Access

One of the reasons why Paraguay commercial operations are on the up is because the country facilitates invest by foreign entrepreneurs. Indeed, setting up a Sociedad Anónima (S.A), a branch office or a Sociedad de Responsibilad Limitada (SRL) is a straightforward investment and requires capital of just US$5,000. Entrepreneurs are able to apply for a visa to secure residency when expanding their business in the country, which has resulted in entrepreneurs across the food, manufacturing and agricultural sectors setting up shop and becoming a major player in the sector, though finding a gap in the market is tough.

Green Energy Opportunties

If you’re still looking for reasons to incorporate in Paraguay, then consider the benefits of green energy. The country has converted almost entirely to renewable hydropower, getting the majority of its electricity from the Itaipu Dam. Not only does this reduce the country’s reliance on energy imports, but it allows the country to export electricity. Perhaps most importantly, this offers businesses access to cheap, reliable energy sources for their ventures, whether manufacturing, agriculture or another sector. Using green energy sources also reduces the footprint of your business, serving as a selling point to today’s environmentally conscious consumers – particularly millennial consumers around the world.

Paraguay is different from any other country in the world and it is really a land waiting only to be discovered. It is easy to discover Paraguay: it has a rich flora and fauna and a rich past and present history. A country with 6,8 millions of inhabitants, in the hearth of Latin America. It borders north with Brazil and Bolivia, east with Brazil and Argentine, south with Argentine and west with Argentine and Bolivia. Paraguay is divided into two regions and it has 17 districts. What makes Paraguay so special? It is simple to say: Paraguay offers many opportunities and it continues to attract investors worldwide. 70% of Paraguayan population is under 30 years old and Paraguay is ready for a continued growth, at least for the next decade. Asunción, the capital, is an extremely lively city, where new shopping malls are being built, while the existing ones are already full, thanks to new buyers in the conquest of international brands. The middle class is emerging and growing. Moreover, Paraguay remains one of the largest exporters of energy, sugar, charcoal, soya meal, beef, corn and wheat.

Other business opportunities

The Paraguayan government is working to improve the country’s road and electrical transmission / distribution network, much of which is unpaved or in need of upgrades. Paraguayan firms do not have the capacity to execute all planned projects, creating opportunities for sales of foreign road construction and engineering services, electrical equipment and installation, road building machinery, project management consulting, and highway operations concessions.

Paraguay offers attractive investment incentives for assembly/distribution operations and the lowest factor costs in the region. There are few restrictions on the types of products that can be produced under the maquila system. The Mercosur agreement allows products to be marked as “made in Paraguay/Mercosur” with only 40 percent minimum local content and be re-exported to any Mercosur country tax free (in Paraguay, these products pay a one percent tax over the value-added in Paraguay).
Agriculture is the primary driver of the Paraguayan economy. This industry presents opportunities for animal genetics and other areas of biotechnology, fertilizers, pest control, farm equipment, and processing machinery.

Paraguay’s construction and industrial sectors growth outpaces the capacity of local construction materials production. Domestic production cannot meet current demand for cement and concrete manufacturing. The rapid demand for the construction of warehouses for industry and agriculture has surpassed the capacity of local companies that build roofing systems. Demand also is increasing for higher-quality construction materials currently not locally available. Projected large infrastructure projects will require purchasing new or used heavy machinery, as well as engineering, project management consulting, and financial services.

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