Paraguay has the highest projected economic growth in South America between 2020 and 2024
Updated: Jan 28
Paraguay is probably not the world’s most renowned investment focus, but there is no reason why it couldn’t be!
Having acknowledged their potential and limitations, the country has worked hard to get to where it is: first in the business climate index among Latin American countries.
You never saw that coming, did you?
But Paraguay’s numbers say it loud and clear:
15 YEARS of sustained economic growth (to an average of 4.5% annually).
2 DECADES of stable exchange rate of the Guaraní (the country’s official currency)
3% of annual inflation (2020)
100% of energy from renewable sources
And that is not it. Not even close.
Paraguayan governments have firmly believed in a solid macroeconomic structure as the key to both the country’s development, and the attraction of foreign direct investment; and once they had it, that second objective has become their priority.
We have already told you about the Maquila law in Paraguay (if you still haven’t, go check it out! https://www.creimermanlaw.com/post/paraguay-may-be-the-most-underestimated-country-in-latam-to-invest-in-when-it-has-it-all-sorted-out). But that is not the only regulation that makes of the country the greatest opportunity in Latin America to invest in nowadays.
There are also others. Like laws on tax incentives for domestic and foreign investment (60/90), that provide tax exemptions for 10 years (including taxes on the incorporation, registration and registrations of companies and companies and customs or internal taxes that apply specifically to the importation of capital goods, raw materials and inputs, depending on the characteristics of the investment), or the regulation of Free Trade Zones (areas within which goods may be traded and stored without payment of duty), and even the creation of the Investment Attraction Directorate of the Ministry of Industry and Trade.
And it has not been in vain. If to that we add that:
It is one of the world's largest exporter of clean and renewable energy
Its population under the age of 30 represents the 56% of the entire population
It has access to MERCOSUR, a free trade area with a GDP of US$ 2 trillion
It has an excellent cost-benefit ratio of labour in the region and lower social burdens
And, Latin America's highest monetary and fiscal stability (with the lower tax rate and simplicity of the tax system)
You get: the highest projected economic growth in South America between 2020 and 2024, and one of the highest return on investments, with a level of profitability that is doubling the one of the region - according to the latest data reported by the Economic Commission for Latin America, Cepal (average return on FDI 6%).
That it is not hard to believe once you know that in 2020, a total of about 16 foreign companies installed in the country, with an investment generated of US$ 1,083,280,781, and many more are currently in the process of making the decision, submitting letters of intent of investment, plans and announcements, implying an intention of US$ 5,818,206,820.
And real state is a huge part of it! The construction of corporate buildings more than a decade ago promoted the development of apartment buildings for the upper segment, then for the upper middle segment, and now options for the income level of the middle class are beginning to appear. Although there are no updated data, it is estimated that in the last 10 years more than a hundred buildings have been erected in Asunción; and taking into account that they are having a profitability that ranges between 7% and 11% annually (and in dollars), and that could be higher in the medium term, it’s easy to see why.
Basically, Paraguay has already took off, but it is in a great place to jump and get on it!