1E9Ct5D

INVESTING IN PARAGUAYAAREAS OF INTEREST1. INTRODUCTIONParaguay is located in the heart of South America with no maritime coast. Historically the economy hasbeen characterized by the predominance of agriculture and cattle production. Today it has positioneditself as the eight leading exporter of meat and the fifth ranking nation as an exporter of soybeans. Inaddition, Paraguay also always stood out as the main exporter of energy in South America and was oneof the principal net exporter world-wide clean energy with two international hydroelectric dams.However, over the years a moderately diversified economy has been developed, achieving in 2010, thelargest economic expansion in Latin America. The industrial sector's growth is mainly consequence offoreign direct investment by multinational companies in the production of edible oils. In addition,important advances have occurred in the mining sector with the discovery of deposits of titanium,uranium and gold.As a member of MERCOSUR (Common Market of the Southern Cone), the trading block formed in 1991by Brazil, Argentina, and Uruguay. It is also a member of the World Trade Organization (WTO) since1997.Regarding foreign trade, the country has an open economy with principal trading partners such asBrazil, Argentina, China, the United States and Russia. There are no restrictions, discriminations orlimitations for foreigners in any sector, and investment law sets forth equal policies for local andforeign investors in all sectors. The private investment laws also grant fiscal exemptions, as well asadministrative and legal incentives with special regimes to foreign and local investors.So, Paraguay’s economic system is based on free trade, making a free currency exchange system, freeimport and export, and free transfer of capital have been introduced. There are no restrictions orlimitations for foreigners in any sector, and its investment legislation set forth equal policies for localand foreign investors in all sectors.Regarding economic activity, national legislation limits the Government´s intervention inentrepreneurial activities and grants private initiative a more important role in investment andeconomic growth. The private investment legislation, which grants fiscal exemptions andadministrative and legal facilities to foreign and local investors, has established these grounds.Law also grants private initiative a more important role in investment and economic growth withrecent legislature such as Public-Private Partnership (PPP) and Competition Law. For instance, the goalof the Public-Private Partnership law is to establish standards and mechanisms to promoteBerkemeyer Attorneys and Counselors | Asunción - Paraguay3