Q. Why it is interesting to invest in Paraguay?
A. Paraguay enjoys an economic system that is based on free trade. A free currency exchange system, free import and export, tax exemption on investments and free transfer of capital has been introduced, at the same time a strict monetary stabilizing program has been put into effect, with tax adjustments designed to control inflation. There are no restrictions on foreign ownership of any kind of business and investment laws accord foreign investors national treatment in all sectors.

Q. What are the economic sectors for Investment in Paraguay?
A. Paraguay offers important options for private investment in the agriculture, livestock, telecommunications sector, energy, industries aimed at the local and export market, among them cast metals, textiles, vegetable oils, dairy products, leather and hides, beef and timber products, cold storage facilities and transport. The principal Paraguayan products are: cotton, soybean, sugar cane, meat, timber, vegetable oils, corn, rice, tobacco, manioc (cassava), fruits and vegetables, among others.

Q. What are the naturals resources in Paraguay?
A. Paraguay has substantial natural resources mainly for forestry, agriculture and cattle raising, as well as potential reserves of natural gas and non-ferric minerals. Abundant fresh water supplies and rainfall provide a wide range of investment opportunities related to the industrialization of timber and agricultural products and food production.

Q. Reforestation is a tax incentive?
A. Reforestation is encouraged through tax incentives as provided for under Law 536/95: a) 50 percent reduction of real estate tax on land used for forestry development. b) Government refund of 75 percent of planting and maintenance cost during the first three years. These refunds are not considered taxable incomes. c) It is presumed that the net income is equal to 10 percent of the commercial value of the timber and related products.

Q. What is the treatment of national and foreign investment?
A. There are no restricted areas, no discrimination and no limitations. The only difference between foreign investments and those made by Paraguayan nationals lies in taxation on net earnings, as foreign investments are subject to a five percent additional tax on remittances or credits in favor of beneficiaries, who are not residents of this country. Said profits or dividends are taxed 5% (the general rate of tax is 30%). If these funds are reinvested in installations improvements, renewal of the capital assets or destined to cover the costs of planting, forestation and reforestation in rural areas, then this additional tax is not levied. The profits and dividends are exempt from taxation for a period of five (5) years if the investment is benefited by Law 60/90, paragraph (h), of article N° 5.