Paraguay Draws Brazilian Companies with Low Taxes and Incentives

A wave of Brazilian firms is relocating part of their production to Paraguay, attracted by the country’s 10‑10‑10 tax model and the Maquila regime that imposes a single 1 % levy on exported output and exempts dividend and import taxes. By December 2025, 339 companies were operating under the Maquila scheme, of which 231 (68 %) were Brazilian, spanning sectors such as textiles (Lupo, Döhler, Karsten), footwear (Dass, Kidy) and meat processing (JBS). JBS announced a US $70 million investment in October, while retail giant Havan’s founder Luciano Hang said he is studying a first store in Asunción. Labor costs are lower too: employer contributions total 16.5 % of wages versus about 20 % in Brazil, and there is no FGTS, PIS/Pasep or “third‑of‑vacation” surcharge. Energy prices are also cheaper, averaging US $41 per MWh compared with US $113 in Brazil. The trend reflects Brazilian entrepreneurs seeking cheaper operating environments, with 76 % of residency requests in the first half of 2026 coming from Brazil.