INVESTMENT REGIMES

Maquila Regime Law 1.064/9 “On the Maquiladora Export Industry”

The maquila regime in force in Paraguay is a regime that allows a foreign company to establish itself in the country, or subcontract to existing Paraguayan companies, to process goods and services to be exported with the consequent added value. This includes importing raw materials, machinery and necessary supplies, under the temporary admission regime (suspension of customs taxes), and exporting the product to the regional or international market.

Maquila operations are exempt from any tax or fee that affects the process from the import of raw materials and inputs, the manufacturing of products, to their export, including VAT. The law establishes a single tax, with a rate of 1% applied to the value of the service invoice issued by the maquiladora to the parent company, or to the value of the export invoice when the goods are sold directly to the final customer of the maquiladora. matrix (on its own and order). The tax is applied to the value that is greater.

These operations are carried out under the maquila contract, signed between a company domiciled within the national territory (maquiladora) and another domiciled abroad (parent company). Through the maquila, national or foreign investors can introduce raw materials into the country for the purpose of being assembled, repaired, improved, worked or processed for subsequent export, once the added value has been incorporated.

Paraguayan legislation does not impose restrictions on the types of products or services included in the maquiladora industry. The national policy of maquiladora activity in Paraguay is regulated and controlled by the National Council of Export Maquiladora Industries (CNIME).

Benefits:

• Single Tax of 1% on the national added value, or on the value of the export invoice issued by the maquiladora on behalf of and by order of the parent company, whichever is greater.
• Suspension of tariffs and taxes on the import of raw materials and inputs, and capital goods.
• Recovery of VAT (tax credit) paid on the purchase of goods and services in the national market.
• Possibility of developing maquila in Paraguayan industries that have idle capacity.

For more information about the Maquila Regime, you can consult chapter 3.6 “Benefits for Investors” of our Investment Guide (add link: https://drive.google.com/file/d/1NpipnDvc5rXE8rx2oT922p62NS2Z7pV/view?usp=sharing) or contact the National Council of the Export Maquiladora Industry at Tel.: (595-21) 611 361 – 663-950 or send an email to secretaria.ejecutiva@maquila.gov

Download Maquila Regime File: https://drive.google.com/file/d/1knwv3F1yBlNDB1cGG1hARd963IcaYDdY/view?usp=sharing