A comprehensive overview of Paraguay’s macroeconomic environment, legal framework, investment incentives, and strategic advantages for international capital.
Paraguay has established itself as one of the most stable and dynamic economies in Latin America, offering a compelling combination of consistent growth, low inflation, and fiscal discipline that provides a highly predictable environment for foreign capital allocation.
Paraguay has demonstrated remarkable macroeconomic resilience over the last two decades, maintaining consistent GDP growth alongside one of the lowest inflation rates in Latin America. The country’s fiscal discipline and stable monetary policy offer a highly predictable environment for foreign capital allocation, significantly reducing traditional emerging-market volatility risks for long-term corporate investments.
The Central Bank of Paraguay (BCP) projects a GDP growth of 4.2% for 2026, following a robust 6.6% expansion in 2025. The economy has maintained strong momentum, with a year-on-year GDP growth of 6.2% in the fourth quarter of 2025. Inflation has been converging gradually toward the BCP’s target of 3.5%, with the latest annual inflation figure standing at 2.1% (June 2026).
The International Monetary Fund (IMF) projects growth at 3.7% for 2026, while the World Bank anticipates growth above 4%. These projections consistently position Paraguay as a regional leader in economic expansion.
The Central Bank of Paraguay (BCP) maintains a credible inflation-targeting framework with a medium-term target of 3.5%. Inflation has been gradually converging toward this target, reflecting the effectiveness of monetary policy and the stability of the macroeconomic environment.
In February 2026, monthly inflation was 0%, while expectations for March 2026 stood at 0.4%. The BCP’s monetary policy reports indicate a commitment to maintaining price stability while supporting economic growth.
Paraguay operates a floating exchange rate regime with minimal central bank intervention, providing transparency and predictability for international investors. The currency has remained relatively stable, with projections for 2026 around ₲/USD 6.875.
The financial system remains robust, with credit to the private sector expanding 15.61% year-on-year in January 2026. The banking sector maintains strong solvency and liquidity indicators, supported by prudent regulation and supervision.
Paraguay offers a modern and transparent legal framework that guarantees equal treatment between national and foreign investors, protects property rights, and ensures the free repatriation of capital and profits.
Law 117/91 establishes the fundamental guarantees for foreign investment in Paraguay. The law ensures:
This legal framework provides the confidence required for institutional investors to commit capital to long-term projects in Paraguay.
Paraguay has a comprehensive and transparent regulatory framework for foreign investment. Key features include:
Paraguay has made significant progress in strengthening its legal framework to attract foreign capital, with ongoing reforms to improve competitiveness and reduce bureaucratic barriers.
Law 60/90 establishes a regime of fiscal incentives for capital investment of both national and foreign origin. The law aims to promote and increase capital investment that seeks to expand the production of goods and services, create permanent employment, foster exports, substitute imports, and incorporate technologies that improve productive efficiency.
Key benefits include:
In 2025, investments approved under Law 60/90 reached USD 650 million, with 121 projects approved — a historic record. These projects are projected to create 4,146 jobs, with 61% concentrated in key sectors such as textiles, food products, and metals.
The Maquila Regime allows investors to import goods or products to be assembled, repaired, improved, or processed for export purposes. The regime has been modernized to include exportable services, expanding its scope and competitiveness.
Key features:
In 2025, the Maquila regime attracted 21 new projects with an investment of approximately USD 49 million, generating 1,433 projected jobs. Key sectors include auto parts, textiles, metallurgy, plastics, food products, and intangible services.
Paraguay has modernized its residency-by-investment program through the new Investor Pass framework, offering flexible pathways for foreign investors to obtain permanent residency while contributing to the country’s productive development.
The Investor Pass is a new regulatory framework established under Resolution 0283/2026, modernizing and simplifying the process for obtaining permanent residency in Paraguay through investment. The program seeks to attract capital, dynamize strategic sectors, and strengthen transparency and traceability of investments.
Investment categories and minimum amounts:
Investments can be made in dollars or guaraníes at the official exchange rate and may be in execution or already completed, provided the economic commitment is duly accredited.
Key requirements:
The Investor Pass strengthens legal certainty and positions Paraguay as a reliable platform for access to Mercosur markets.
Paraguay’s strong investment performance reflects its growing appeal as a destination for international capital, with record-breaking approvals across multiple sectors.
Paraguay recorded significant momentum in investment attraction in 2025, with more than 140 projects approved, totaling USD 699 million and projecting the creation of over 5,500 jobs.
Key figures:
This performance reflects the government’s commitment to diversifying markets, strengthening the productive matrix, and generating formal employment in strategic sectors.
Paraguay offers attractive opportunities across a wide range of sectors, supported by fiscal incentives and a favorable business environment:
For detailed information about investment opportunities, regulatory compliance, or to discuss how Redland can assist with your investment strategy in Paraguay, please contact our team.
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