Paraguayan business leaders are incorporating a bilateral chamber with the United Arab Emirates, La Nación reported on 23 August. The vehicle is called Capecit and covers commerce, industry and tourism, with a parallel Paraguay Business Council planned under Dubai Chambers. Behind it sits a trade line that has grown fast: non-oil exchange between the two countries reached $249.2 million in 2025, up 53.8% on the year.
The push follows a business meeting held in Asunción on 11 and 12 August under the title "¿Por qué Dubái?", attended by Martin Ridley, the Dubai Chambers regional director covering Argentina, Chile, Paraguay, Peru and Uruguay. Coordinating the chamber is Tadeo Molinas Chaparro, who has worked the bilateral relationship since 2013.
What the Paraguay UAE Trade Numbers Show
In absolute terms $249.2 million is modest, and the growth rate flatters it. The gap underneath is the more telling number. The UAE imported roughly $27 billion of food in 2024, and Paraguay supplied about $23 million of that. For a country whose exports are overwhelmingly agricultural, a food-importing market of that size with almost no Paraguayan presence is the whole argument for the chamber.
At bloc level the figures are larger. Mercosur and the UAE traded $6.2 billion in non-oil goods during 2025, and the two sides have been negotiating a Comprehensive Economic Partnership Agreement since 2024. Emirati ministers called the process advanced in late 2025 and restated the commitment at the Mercosur summit in Asunción in June 2026. It is still unsigned.
Capecit's stated plans are the ordinary ones for a chamber at this stage: trade missions to the Emirates, B2B meetings, investor matchmaking, and coordination with the UAE-linked chambers already running in Argentina, Brazil, Chile and Colombia. Molinas Chaparro framed it as governments having done their part, with the private sector now expected to turn interest into actual investment.
The Tax Agreement That Already Exists
What most of the coverage skips is that the two countries settled the tax question years ago. Ley N° 6230/18, promulgated on 19 November 2018, approved the agreement signed in Abu Dhabi on 16 January 2017 to avoid double taxation on income and to prevent fiscal evasion. Paraguay's treaty network is short, and the UAE sits on it alongside Chile, Spain, Qatar and Uruguay.
For anyone with one foot in each place, that matters more than a chamber does. A treaty supplies a tie-breaker when two countries each think you are resident, and a defined treatment for cross-border income instead of whatever either side asserts on its own. Why those are separate questions is the subject of our guide to immigration versus tax residency.
Paraguay or Dubai, the Comparison Readers Keep Asking
Both places advertise a zero, and they are not the same zero. The UAE levies no personal income tax, but has charged a 9% federal corporate tax on business profits above roughly $102,000 since 2023, with narrow free-zone relief for qualifying income. Paraguay works territorially: genuinely foreign-source income stays outside the local net once you hold real tax residency, while Paraguay-source personal income is taxed at 10% above a modest threshold.
Cost is the larger separator. Living well in Dubai is expensive in a way that living well in Asunción is not, and that difference compounds every month rather than once a year. We put the two side by side in Paraguay vs the UAE, and against the wider field in Paraguay vs Dubai, Panama and Georgia. A chamber changes neither regime.
What Paraguay's UAE Push Means for You
Today, very little. Capecit is a private body still being incorporated, not a policy change, and it hands nobody a visa, a rate or an exemption. The signal is worth more than the substance: Paraguay is laying commercial plumbing toward a hub many readers of this site already use, which over time tends to mean better flight and banking connections, more advisers who understand both ends, and fewer explanations demanded at a counter.
The standing exception applies unsoftened. US citizens and green-card holders owe the IRS on worldwide income wherever they live, and neither a Paraguayan residency nor a Gulf structure alters that. Take US-qualified advice if it applies to you.
Frequently Asked Questions About Paraguay UAE Trade and Tax
Does Paraguay have a tax treaty with the UAE?
Yes. Ley N° 6230/18 approved the double-taxation agreement signed in Abu Dhabi on 16 January 2017, and the UAE is one of the few countries with which Paraguay holds such a treaty, alongside Chile, Spain, Qatar and Uruguay. How it applies to your particular income is a question for an adviser who has your facts.
Is the Mercosur trade agreement with the UAE signed?
No. Talks opened in 2024 and both sides have described them as advanced, most recently around the Mercosur summit in Asunción in June 2026, but no signature has been recorded. Until there is one, trade between Paraguay and the UAE runs on ordinary terms.
Does the new chamber change Paraguay's tax rules for foreigners?
No. Capecit is a private business chamber with no authority over tax. Paraguay's territorial treatment of foreign income and the conditions for genuine tax residency are set in law and administered by DNIT, and neither moves because a chamber was founded.
Running a Gulf company and weighing a Paraguayan base? The treaty makes that combination cleaner than most, and messier in two or three specific places. Bring us the specifics.
Disclaimer: General information about a trade initiative and an existing tax treaty, not legal or tax advice. Treaty outcomes depend on your own facts, and trade terms shift. Confirm against the official texts and a qualified adviser before acting.
Sources
- ▹La Nación: impulsan la conformación de la Cámara Paraguay-Emiratos Árabes Unidos
- ▹BACN: Ley N° 6230, acuerdo Paraguay-Emiratos Árabes Unidos para evitar la doble imposición
- ▹Khaleej Times: UAE reaffirms Mercosur trade ambitions after $6.2bn non-oil trade in 2025
- ▹Forbes Paraguay: Emiratos Árabes Unidos emerge como socio clave para Paraguay
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.
