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The Maquila Regime Offers Reduction of Up to 40% in Operational Costs, Making Paraguay a Strategic Destination for Brazilian Companies Seeking Competitiveness and International Expansion
With reduced taxes, abundant energy, and a young workforce, Paraguay has become one of the most attractive destinations for Brazilian companies looking to expand their production at lower costs. The maquila regime, established over two decades ago, allows operations with only 1% taxation on exports and exemption from various duties.
According to official data, nearly 70% of the industries operating under this model are Brazilian, particularly from Paraná and other states in the South region, which take advantage of tax incentives to produce in the neighboring country and strengthen their presence in both Latin American and global markets.
How The Maquila Regime Works and Why It Attracts So Many Brazilian Companies
The maquila regime is a policy created by the Paraguayan government that allows the establishment of industries with a tax burden of only 1% on the exported value.
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In Dubai, rising tensions from the war in the Middle East are causing super-rich individuals to leave the Gulf and direct their fortunes to a new financial refuge in Asia.
It offers exemptions from other taxes and a simplified customs regime, facilitating the import of inputs and the export of products.
Brazilian companies do not need to leave Brazil to benefit: they can open branches, partnerships, or extensions in Paraguay and continue operating with national CNPJs.
The result is a reduction of up to 40% in operational costs, along with greater access to international markets through the Paraguayan platform.
Almost 70% of Maquila Industries Are Brazilian
According to the Ministry of Industry and Commerce of Paraguay, 223 of the 332 industries operating under the maquila regime are Brazilian — equivalent to 67%.
These companies are mainly concentrated in the textile, automotive, and electronics sectors.
The majority are located in the state of Alto Paraná, whose capital is Ciudad del Este.
More than 65% of everything produced is sent back to Brazil, integrating transnational production chains that connect the two countries on logistical, tax, and industrial levels.
Itaipu Energy, Young Workforce, and Strategic Location
Access to cheap and stable electricity, thanks to proximity to Itaipu Binacional, is another competitive advantage.
The Alto Paraná region boasts excellent energy infrastructure, a young and trainable workforce, and direct land connections with southern Brazil.
Entrepreneurs report that the construction of industrial warehouses in the region has grown exponentially over the last 10 years, driven by the combination of reduced costs and direct institutional support from the Paraguayan government for factory establishment.
Opportunity To Optimize, Not To Flee Brazil
Contrary to popular belief, this is not a flight from Brazil, but rather a strategy for productive optimization.
Many companies maintain operations in the country and use Paraguay as a complementary base, gaining breathing room to compete with foreign products and meet external markets at lower costs.
“The idea is not to abandon Brazil, but to improve our competitiveness while contributing to the development of the local Paraguayan market”, explains one of the entrepreneurs interviewed by Ric RECORD Oeste.
Economic Growth and Predictability Enhance Attractiveness
Paraguay registers average growth of 4.5% per year over the last decade and is expected to close 2025 with a 4.4% increase in GDP, according to official projections.
This stability enhances the country’s attractiveness for Brazilian companies seeking predictability and legal security for investment.
The consistent fiscal policy, incentives for productive capital, and direct institutional support for foreign investors have transformed Paraguay into a new regional development hub — increasingly playing a role in Brazilian indirect exports.
Do you consider this expansion of Brazilian companies into Paraguay strategic? Do you believe Brazil should adopt similar incentives? Leave your opinion in the comments — we want to hear from those closely following the productive sector.
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