The Maquila Law (Law No. 1064/97) is one of the pillars of Paraguay's investment attraction model. It allows foreign companies to carry out transformation, assembly, or manufacturing processes on Paraguayan soil while paying a single tax of 1% on the value added in the country.
What is the Maquila regime?
The Maquila regime allows a foreign company (maquiladora) to hire a Paraguayan company (local maquiladora) to carry out part of its production process. Inputs temporarily enter the country and the finished product is exported.
Main benefits
- Single tax of 1% on local added value. No VAT or income tax on Maquila activity.
- Temporary import of inputs without payment of tariffs or VAT
- Temporary admission of machinery without payment of taxes
- Access to the export market without restrictions
- Legal stability guaranteed by contract with the Paraguayan State
What industries can operate under Maquila?
The regime applies to a wide range of activities: textile manufacturing, metalworking, software, call centers, electronic assembly, and agro-industry.
The approval process
- Application to CNIME (National Council of Export Maquila Industries)
- Evaluation and contract approval (60-90 days)
- Operational enabling before National Customs Directorate
Paraguay combines the Maquila Law with strategic location in the heart of Mercosur, some of the cheapest electricity in the world, and macroeconomic stability.