Correction, 25 September 2026: the first version of this item attributed the maquila regime to Law 1064/97 and put the 1% tax on value added alone. The regime has been governed since 8 September 2025 by Ley 7547/2025, which replaced the 1997 law, and its Article 37 levies the 1% on the value added in Paraguay or on the export invoice value, whichever is higher. The two passages below have been corrected.
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, now set by Ley 7547/2025 in place of the original Law 1064/97, lets a company import inputs and export finished goods while paying a single 1% tax, in place of the ordinary tax stack. The base is the value added in Paraguay or the export invoice value, whichever is larger. 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 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, governed since September 2025 by Ley 7547/2025: a company imports inputs and exports finished goods while paying a single 1% tax, charged on the local value added or the export invoice value, whichever is higher, 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.
Thinking about producing or assembling in Paraguay rather than only living here? A short conversation separates the maquila regime from the residency question. Talk to us.
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 support
Spends regular time in Paraguay and, with his team on the ground in Asunción, guides international nomads, entrepreneurs and investors through residency, the cédula and the RUC paperwork.
