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The Paraguayan Ministry of Foreign Affairs has signed Investment Guarantee agreements with thegovernments of: Argentina, Austria, BENELUX, Brazil, Chile, China (ROC), Ecuador, France, Germany,Great Britain, Hungary, Korea, Peru, Romania, South Africa, Spain, Switzerland, United States ofAmerica, Uruguay and Venezuela. These agreements seek to promote commerce, investments andindustrial cooperation.The Paraguayan Government has also signed an agreement with the World Bank’s MultilateralInvestment Guarantee Agency (MIGA), ratified by Act N° 124 dated February 6, 1992. Moreover,investment guarantee agreements have been signed with the Overseas Private InvestmentCorporation (OPIC), ratified by Act N° 155 dated May 3, 1993.In addition, within the framework of the MERCOSUR, a protocol has been signed for mutual promotionand protection of investments in the member countries and conflict resolution therein.5. BANKING AND INSURANCEAct 861/1996 establishes the requirements and procedures for the opening of banks, financialundertakings, general stores and warehouses, security, brokerage firms and other credit entities,without restriction, except for compliance with operational and supervisory regulations.Act 827/1996 regulates the Insurance market. This Act foresees the requirements for authorization tooperate, as well as the minimum capital. The Insurance Superintendent, a technical body of the CentralBank of Paraguay, acts as enforcement authority.6. STOCK MARKETSThe Stock Market Act 1284/1998 was approved replacing an earlier Act for the sector. The NationalSecurities Commission has produced a series of regulations covering requirements for the issuance ofsecurities, opening of securities exchange and brokerage agents, qualification of issuing corporations,etc.The Stock Market Act established fiscal incentives for companies listed on the Asuncion StockExchange. The recent fiscal reform introduced an exemption from corporate income tax for interestsand profits earned on securities placed through the local exchange and on government and municipalbonds.The Act is aimed at strengthening the local stock market to provide a source of capital for privateinvestments.14Berkemeyer Attorneys and Counselors | Asunción - Paraguay