Invest in Paraguay

Get Your Free Overseas Information
Report Today!

Learn more about PARAGUAY and other countries in our free, daily Overseas Opportunity Letter. Simply enter your email address below and we’ll send you our FREE REPORT - The 1- Best Places To Retire In

Invest in Paraguay: Growing Opportunities

Real estate investing in Paraguay

When it comes to investing in Paraguay, many investors are attracted to the country’s real estate market.

Like starting a business, real estate investment is wide open to foreigners, with almost no restrictions.

We say almost none because there are some minor legal restrictions on Brazilians and Argentines buying land in Paraguay close to their national borders.

Real estate investments can be divided into urban and rural types. Urban basically means Asuncion. You will find interesting opportunities investing in the construction of low-cost housing for workers.

Plus, some experts believe this is a growth area, especially as financing is becoming easier.

The main area of interest for foreigners, however, is undoubtedly rural land. This may be farmland, or it may be raw land in the Chaco, where you really can buy land for US$50 to US$100 per hectare.

What you will do with such land, or even how you will get to it, is another matter.

Investing In Agricultural Projects

For serious agriculture, Paraguay definitely offers the best value land in the Southern Cone region.

The highest yielding developed farmland (typically producing soya or sugar cane), intensively operated and located close to processing plants, costs US$5,000 to US$10,000 per hectare.

Good cattle ranch land goes for about US$500 to US$2,500 per hectare, mainly depending on how far it is from transportation infrastructure.

This kind of agricultural land is good for semi-active investors who are looking for a high ROI and position for future development while keeping their capital safe.

Good management companies that will manage your land for you are available, and plenty of not-so-good management companies so trusted local advice is essential.

You can also simply rent your land out. Current rates of return are about 3% plus potential capital growth.

Virgin land of the type that you can actually do something with goes for US$200 to US$600 per hectare.

By “virgin land” we mean land that is covered by trees or scrub forests in the Chaco, with good soil fertility so it can be cleared and used for cattle ranching. This latter option is about as close to a passive investment as you can get, as it requires no maintenance nor further investment—you are just speculating on the land price increasing over time.

When buying this kind of land, you are looking for a favorable combination of climate, topography, soil fertility, and environmental viability of agriculture in the future.

Many people have a dream of living out in the middle of nowhere and running their own agricultural operation. In this case, what you need is a smallholding, or estancia, probably in the south of the country, not too far from the main road, offering investment in agriculture and a gentleman-farmer or wild-west lifestyle (your choice) combined.

Incentives for Investment in Paraguay

The agency responsible for foreign investment promotion (REDIEX) at the Ministry of Finance in Asuncion.

Foreign Investment Law 117/91 reiterates that foreigners have the same guarantees, rights, and obligations enjoyed by any Paraguayan investor. There are no restricted areas, no discrimination, and no limitations.

Paraguay has signed a number of bilateral and international investment protection treaties and specifically recognizes international arbitration, meaning that in cases of disputes, foreigners can seek redress in an international forum.

The most important foreign investment incentive is Law 60/90. This law grants tax incentives for investments. Investments may be in the form of capital (including loans, etc.), equipment, trademarks, technology transfers, and the like. In other words, the definition of investments is quite broad. In return for the investment, the following exemptions are granted:

  • All government fees for registering companies are waived
  • Total exemption from customs duties
  • Total exemption from withholding tax on repayment of loans exceeding US$5 million
  • Total exemption from taxes on profits and dividends for 10 years for investments exceeding US$5 million

Incentives under Law 60/90 are generally approved within 45 days of the application.

Paraguay’s Maquila program, based on a similar program in Mexico, allows a local entity to sign a contract with a foreign entity to produce goods or provide services for export only. The system allows for duty-free import of raw materials and a complete tax exemption with the exception of a 1% fixed tax on turnover.

Opening A Paraguayan Brokerage Account

Anyone interested in participating in the Paraguayan economy can open a brokerage account with as little as a few thousand dollars, and it can even be done by mail.

You can simply keep cash in the brokerage account, or use it to invest in the mainly fixed-interest securities traded on the small Asuncion stock exchange. Nonresidents and foreign and/or offshore companies can open these brokerage accounts.

This can be an excellent way of testing the water or gaining a small foothold investment in the Paraguayan economy. It is also a discreet way of stashing some funds away for a rainy day.

Popular Articles

Paraguay Articles

What You Need to Know About Gun Laws In Central And South America

Gun laws vary in every country. It is important to understand that gun ownership is a privilege, not a right. Gun laws are strictly enforced, and draconian measures apply for anyone found with an unlicensed gun or ammunition. You can apply for a gun permit as a legal resident in Panama, Belize, Nicaragua, and Ecuador. You’ll be limited in each case as to the number of guns you can own and also restricted as to the types of weapons you can keep, but...

Read more

Get Your Free Overseas Information
Report Today!

Learn more about PARAGUAY and other countries in our free, daily Overseas Opportunity Letter. Simply enter your email address below and we’ll send you our FREE REPORT - The 1- Best Places To Retire In

Sign up to receive the FREE daily e-letter, Overseas Opportunity Letter and we’ll immediately email you our editors’ latest research report…