Paraguay's maquila regime, now governed by Ley 7547/2025, lets a company domiciled in Paraguay process goods or provide services for export under contract with a company abroad, paying a single 1% tax on the higher of the value added in Paraguay or the export invoice. Programs are approved by a joint resolution of the Ministry of Industry and Commerce and the Ministry of Economy and Finance, based on a technical report from the CNIME.
What a maquila is
The model
A company abroad (the "matriz") signs a maquila contract with a company set up in Paraguay (the "maquiladora"). The maquiladora temporarily imports goods, adds Paraguayan labor and other local resources to transform, make, assemble or repair them, and re-exports them. Under the new law, the same model also covers services provided from Paraguay for use abroad.
Selling inside Paraguay
The regime is built for export. Pure maquiladoras can sell locally up to 10% of the previous year's export volume, after notifying the CNIME's Secretaría Ejecutiva and paying import and domestic taxes (Ley 7547/2025, Art. 18). Income from activities outside the maquila program pays ordinary income tax (Art. 38).
The legal framework
Ley 1064/97, the original law
Paraguay's maquila regime began with Ley 1064/97, regulated by Decreto 9585/2000.
Ley 7547/2025, the current law
Ley 7547/2025 "Del Régimen de Maquila" was promulgated and published on 8 September 2025. It replaces the 1064/97 framework, adds services maquila, and modernizes procedures.
Transition for existing programs (Art. 42): programs approved under Ley 1064/97 kept their original conditions and tax benefits for the 12 months after the new law took effect. Ley 7547 took effect in September 2025, so that period ended in September 2026. After that they moved into the new regime automatically, keeping their temporary admission terms, guarantees and benefits, without a higher tax burden on past events. The conflicting parts of 1064/97 were repealed at that point.
The regulation
The law was regulated by Decreto 5714/2026 of 6 April 2026, published by the MIC. It sets the procedures for applying, approval, control and the transition. The CNIME can propose further rules for approval by joint ministerial resolution.
The CNIME: who reviews your program
The law creates the Consejo Nacional de las Industrias Maquiladoras de Exportación (CNIME) as an advisory body to the two ministries (Art. 6). Its members are representatives of:
- the Ministry of Industry and Commerce (which presides),
- the Ministry of Economy and Finance,
- the Dirección Nacional de Ingresos Tributarios (DNIT),
- the Banco Central del Paraguay,
- the Ministry of Labor, Employment and Social Security.
The CNIME meets monthly or whenever needed (Art. 8). Its Secretaría Ejecutiva runs the day-to-day application of the law. The ministers can object to a favorable CNIME recommendation with technical grounds (Art. 5).
The 1% single tax, explained
- Rate and base (Art. 37): 1% on the value added in Paraguay or the export invoice value, whichever is higher. Submaquila contracts pay the same 1%.
- Value added in Paraguay is the sum of local goods and services bought for the contract, salaries paid in Paraguay including social security, depreciation of capital goods the maquiladora owns, and the fees it receives for the maquila or submaquila service.
- Filing: by sworn return to the DNIT. A maquiladora files even when no tax is due.
- Other taxes (Art. 38): the maquila contract and its activities are exempt from all other national taxes, except fees for services actually received. This covers import of the contracted goods, re-export, export, and IRE, IDU and INR on income from the approved program.
Who it suits
The regime suits export-oriented manufacturing, assembly, repair and service exporters with real staff and operations in Paraguay. It is not designed for businesses that mainly sell inside Paraguay, or for structures with no local process.
How a foreign company sets one up
- Have a company domiciled in Paraguay. Beneficiaries are legal entities and sole proprietorships, national or foreign, domiciled in the country and able to trade (Art. 4).
- Prepare the contract. Sign the maquila contract with the company abroad, or file with a letter of intent.
- Apply. Register as a maquiladora on the Ventanilla Única de Exportación (VUE), then file the program in the Sistema Integrado de Maquila de Exportación (SIMEX), following the guide approved by Resolución SE-CNIME N° 14/2026.
- Review and approval. Technical review, CNIME recommendation, and a joint resolution of the two ministries.
- If you filed a letter of intent, submit the signed maquila contract within 180 days of the approving resolution, or the approval lapses automatically (Art. 11).
- Start operations within 18 months of approval. One justified extension is possible (Art. 15).
Benefits last up to 20 years from approval and can be renewed (Art. 13). Raw materials and inputs imported temporarily may stay in Paraguay up to 12 months from import, extendable once for a justified reason (Art. 14). The required documents are listed in the guide approved by Resolución SE-CNIME N° 14/2026. They must be in Spanish: anything in another language needs a translation by a traductor público matriculado in Paraguay (Decreto 5714/2026, Art. 8), and documents issued abroad, such as the corporate documents of the company abroad, need an apostille or legalization.
Other modalities
- Submaquila: a maquiladora can outsource part of its approved process; every submaquila program must be linked to an approved maquila program (Art. 25).
- Idle capacity: a company selling locally can apply for a maquila program using spare capacity (Art. 26).
- Shelter (albergue): an installed company can host programs under the shelter modality (Art. 27).
Maquila and your own residency
The law lets the Dirección Nacional de Migraciones authorize the stay of the foreign administrative and technical staff a maquiladora needs (Art. 30). Maquila is not a residency category by itself: owners and staff still need a residency route.
- Standard route: temporary residency, then permanent. See our residency guide.
- Investor route: Migraciones has a special permanent residency procedure for foreign investors under the SUACE, based on the Constancia de Inversionista issued through the MIC, without prior temporary residency.
- Personal tax: the maquila tax applies to the company. Your personal tax position is separate; see our tax overview.
Common mistakes
- Selling regime goods in Paraguay without nationalizing them.
- Missing the 180-day deadline to submit the contract after approving on a letter of intent.
- Filing parent company documents without apostille or translation.
- Assuming a maquila program gives residency on its own.
If you want help with the process, Clarity Paraguay can assist; you can book a free 15-minute call. Our soft landing service helps with the practical side of settling in.
Frequently asked questions
What is the maquila regime in Paraguay?
A regime that lets a company domiciled in Paraguay process goods or provide services for export under contract with a company abroad, paying a single 1% tax.
Is Ley 1064/97 still in force?
It has been replaced by Ley 7547/2025. Programs approved under 1064/97 kept the old terms for 12 months and then moved into the new regime; obligations and rights born under 1064/97 continue until those programs end.
Is the maquila tax really a single 1%? What is it calculated on?
Yes, 1% on the value added in Paraguay or the export invoice, whichever is higher. Activities outside the program are taxed normally.
Can a foreign company use the maquila regime without a Paraguayan company?
No. The beneficiary must be a legal entity or sole proprietorship domiciled in Paraguay. The company abroad is the contracting party.
What is a contrato de submaquila?
A contract under which a maquiladora outsources part of its approved process. It needs a submaquila program linked to an approved maquila program and pays the same 1% tax.
Who approves a maquila program, and how long does it take?
The ministers of Industry and Commerce and of Economy and Finance, by joint resolution based on the CNIME's report. The law does not set a total processing time.
Can I sell maquila products in Paraguay?
Pure maquiladoras can sell locally up to 10% of the previous year's export volume, after notifying the CNIME's Secretaría Ejecutiva and paying import and domestic taxes (Ley 7547/2025, Art. 18).
Does setting up a maquila give me residency in Paraguay?
No. Migraciones can authorize needed foreign staff, but owners and staff still need a residency route such as temporary residency or the investor procedure.
This article is general information, not legal or tax advice. Confirm current rules with the MIC, the DNIT and Migraciones.
Official sources