Investing in Paraguay in 2026: The New Legal Package
Three new laws in 2025 rewrote maquila, incentives and assembly. The 1997 Maquila Law is repealed in full in September 2026.
In September 2026, Law No. 1,064/1997 — which governed Paraguay’s maquila regime for nearly three decades, and which is still cited as the rule in force across much of the available content about investing in the country — will be repealed.
It has not governed new operations since 9 September 2025, when its successor came into force. The old law remains technically applicable, for a 12-month transition period, only to operations already authorised under the previous regime.
Anyone weighing an investment in Paraguay on the basis of content describing “the 1997 Maquila Law” as the current rule is reading about a statute in the process of being extinguished, not about the regime that will actually govern their own investment.
The 2025 package: three laws, one modernisation move
In August and September 2025 the Paraguayan government enacted a package of three laws that completely reshaped the country’s toolkit for attracting productive investment:
- Law No. 7,547/2025 — Modernisation of the Maquila Regime. Replaces Law 1,064/97. The most significant change for service providers, rather than manufacturers: service maquila now has explicit legal footing — software, BPO, ITO and remote professional services formally enter the regime, with clear tax treatment rules. Until then, that segment operated without that formal basis.
- Law No. 7,548/2025 — New Tax Incentives Regime for Domestic and Foreign Investment. Repeals in full the old Law 60/90 and Decree-Law 27/90, which historically governed incentives for investment projects.
- Law No. 7,546/2025 — Assembly Law. Creates a dedicated regime for industrial assembly activity, previously handled less consistently under the general incentives umbrella.
Note on scope: Law 7,548/2025 required implementing rules from the executive within 120 days of enactment. At the time of verification for this article, part of that implementation had advanced (the decree implementing the new maquila regime, for instance), but not every operational detail of the new general incentives regime was fully settled. Before structuring any investment, we confirm the latest regulatory position with the MIC and the Ministry of Economy and Finance.
What changes in the maquila regime specifically
| Dimension | Law 1,064/1997 (repealed Sept 2026) | Law 7,547/2025 (in force since Sept 2025) |
|---|---|---|
| Scope | Focused on manufacturing/industry | Explicitly includes service maquila (software, BPO, ITO) |
| Tax treatment | Single tax on value added in the country | Single-tax principle retained (historically 1% on value added generated in Paraguay) |
| Temporary import of inputs | Provided for, with exemptions | Retained and modernised, with simplified procedures |
| Control and traceability | Less standardised | Reinforced — stricter requirements for production process control |
The maquila regime remains one of the most used pillars for foreign investors: a large share of the maquiladoras operating in Paraguay have their parent company in Brazil. But the warning practitioners in the sector tend to repeat is worth carrying over: this is not merely a tax benefit — it is a regime demanding complete control and traceability of the production process, and failures in that control create problems with the authorities, not just the loss of a benefit.
The general tax framework, for context
Outside the special regimes, Paraguay runs a tax structure regarded as carrying some of the lowest nominal rates in the region: reference rates of 10% for VAT, 10% for corporate income tax (IRE) and 10% for personal income tax (IRP), plus 8% on distributions of dividends and profits (IDU) for residents.
Sectors with the most visible momentum in 2026
- Industrial and service maquila. In the first half of 2026 alone, exports under the regime totalled around US$717 million, growing close to 25% against the same period the previous year — the sector now accounts for roughly 69% of Paraguayan industrial exports and generates more than 35,000 direct jobs.
- Energy. Paraguay is one of the world’s largest net exporters of electricity, thanks to its binational hydroelectric plants — which sustains a competitive energy cost for industrial and data-mining operations.
- Agribusiness. A structural sector of the economy, with an export tradition and consolidated regional integration through Mercosur.
- Logistics and the Bioceanic Corridor. Its central position in South America, reinforced by the Bioceanic Corridor project linking the Atlantic and Pacific, positions Paraguay as a strategic transit point for regional trade.
Formalising the company: the role of SUACE
The Unified Company Opening and Closing System (SUACE) remains the standard channel for incorporating a company in Paraguay in a centralised way, bringing together steps that historically required several separate agencies. For anyone intending to use the investment as a residency route as well, SUACE is also the gateway to the Foreign Investor Certificate.
What this changes in practice
- Checking which law your investment will actually operate under has stopped being a technical detail. With Law 1,064/97 being repealed, any business plan or opinion still citing it as the governing rule needs revisiting.
- Service maquila is a new door, not merely a textual update. Technology, BPO and remote professional services companies, which previously had no clear formal basis in the maquila regime, now do — changing the calculation for investors in that sector specifically.
- The general incentives regime (Law 7,548/2025) is still in regulatory consolidation. Investments depending specifically on that regime — rather than on maquila — need an updated check on the implementation status before any capital commitment.
Frequently asked questions
Is the 1997 Maquila Law still in force?
Partly, and for a limited time. It still applies to operations already authorised under the previous regime, but will be repealed in full in September 2026, a year after the new law took effect.
Can technology and services companies use the maquila regime?
Since Law 7,547/2025, yes — explicitly. Before that, the segment operated without a clear formal legal basis within the regime.
What are the general tax rates for companies outside a special regime?
The general reference is 10% corporate income tax on business profit, with a further 8% on dividend distributions to residents.
Is SUACE still the channel for opening a company in Paraguay?
Yes. It remains the centralised company opening and closing system, and also the route to the Foreign Investor Certificate for anyone using the investment as a residency path.
The starting point
Three new laws in the same package, enacted in the same month, are not a routine update — they are a structural rebuild of Paraguay’s investment attraction toolkit, with a historic statute in the process of formal extinction. Investing on the basis of the old regime, months before it ceases to exist, means deciding with the wrong map.
If Paraguay is on your radar as an investment destination, it is worth mapping which of the three new regimes — maquila, general incentives or assembly — best fits your specific operation.
One conversation is enough to build that mapping.
Informational content. It does not constitute legal, tax or investment advice. The rules cited were verified against the official and press sources indicated in July 2026 and may be amended or further regulated. Individual situations produce different outcomes and should be analysed case by case.