Paraguay - Country Commercial Guide
Market Opportunities
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The Paraguayan government is working to improve the country’s infrastructure and welcomes unsolicited Public Private Partnership proposals for strategic projects. These include roads, ports, electrical transmission/distribution networks, solar power plants and battery storage, water treatment facilities, and digital infrastructure.  Paraguayan firms do not have the capacity to execute all planned projects, creating opportunities for sales of U.S. road construction and engineering services, electrical equipment and installation, road building machinery, project management consulting, highway operations concessions, airport design, cloud services, telecommunications technology, and financial services. 

Paraguay offers attractive investment incentives for assembly/distribution operations (the “Maquila” system) and the lowest factor costs in the region.  There are few restrictions on the types of products that can be produced under the maquila system.  The Mercosur agreement allows products to be marked as “made in Paraguay/Mercosur” with only 40 percent minimum local content and to be re-exported to any Mercosur country tax free (in Paraguay, these products pay a one percent tax over the value-added in Paraguay).  U.S. firms operating through Paraguayan subsidiaries can also benefit from Paraguay’s auto parts free trade deals with Argentina and Brazil, signed in 2019, which allow tariff-free exports of certain automotive components to these two large consumer markets.

Agriculture is the primary driver of the Paraguayan economy.  This industry presents opportunities for animal genetics and other areas of biotechnology, fertilizers, pest control, farm equipment, and processing machinery. 

The growth of Paraguay’s construction and industrial sectors outpaces the production capacity of local construction materials manufacturers.  Domestic production cannot meet current demand for cement and concrete manufacturing.  The rapid demand for the construction of warehouses for industry and agriculture has surpassed the capacity of local companies that build roofing systems.  Demand also is increasing for higher-quality construction materials currently not locally available.  Projected large infrastructure projects will require purchasing new or used heavy machinery, as well as engineering, project management consulting, and financial services. 

Paraguay is a consistent market for U.S. goods exports, with a strongly pro-American population and a growing middle class that views U.S. brands as a status symbol. Paraguayan policy makers are wary of reliance on untrusted vendors in critical infrastructure, thus boosting U.S. firms’ attractiveness in key sectors such as telecom, renewable energy, and infrastructure.  A newly inaugurated U.S. Embassy compound serves as a symbol of both U.S. long-term commitment to the Paraguayan market and offers a footprint for broadened future commercial support.