Paraguay is quietly building a second export story alongside its farms. Under the maquila regime, factories that assemble goods for export shipped $717 million in the first half of 2026, a 25% jump on the same period last year, according to the Ministry of Industry and Commerce. It is a smaller number than soy or beef, but it is growing fast, and it points at the kind of diversification a stable base is meant to attract.
Maquila Exports Up 25%
Auto parts led the basket at about 32%, followed by textiles and clothing near 16% and chemical and pharmaceutical products around 4%. The jobs figure moved with it: the regime employed 36,052 people over the half, roughly 1,900 more than a year earlier. Most output stays regional, with Mercosur taking about 78% of shipments. Brazil alone accounted for 62%, Argentina for 15% and the Netherlands for 9%.
What the Maquila Regime Actually Is
The regime, created by Law 1064/97, lets a company import inputs and export finished goods while paying a single tax of just 1% on the value added in Paraguay, in place of the ordinary tax stack. It is built to make the country a low-cost assembly and manufacturing platform for regional supply chains. Paired with cheap energy and an investment-grade rating, it is a core reason manufacturers keep testing Paraguay as a base.
What It Means for You
For most readers the relevance is indirect. A widening industrial sector reinforces the macro stability that makes a long-term move feel safer, and it deepens the local economy you would be settling into. If you are weighing an actual manufacturing or trading operation, the maquila route is one to raise with an advisor early, because it shapes how you would form a company and structure the flows.
On personal tax, none of this shifts the fundamentals. The 1% maquila tax is a corporate export regime, not a personal-income rule. Paraguay's 0% territorial treatment of foreign income still turns on genuine tax residency, and US citizens and green-card holders stay taxed by the IRS on their worldwide income wherever they live. Take US-qualified advice if that applies to you.
Frequently Asked Questions
What is Paraguay's maquila regime?
It is an export-manufacturing framework under Law 1064/97: a company imports inputs and exports finished goods while paying a single 1% tax on the value added locally, instead of the normal corporate tax stack. It underpins Paraguay's pitch as a low-cost assembly platform for Mercosur supply chains.
Does the maquila tax rate apply to my personal income?
No. The 1% rate is a corporate export regime for qualifying maquila operations, not a personal-income tax. Your own position still depends on genuine Paraguay tax residency and the territorial rules, and US persons remain taxed by the IRS on worldwide income regardless of where they live.
Disclaimer: This article is general information, not investment, legal or tax advice. Trade figures and rules change over time. Confirm current data with an official source before acting.
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About the author
Yannick Schroth
Founder · Paraguay relocation advisor
Lives in Asunción and guides international nomads, entrepreneurs and investors toward residency, a cédula and a tax-efficient structure in Paraguay.
