Strategic Overview of Industrial Parks in Paraguay for Nearshore Manufacturing Site Selection

by | Jul 4, 2025 | FDI Latin America

Paraguay has emerged as a compelling destination for nearshore manufacturing, offering a blend of competitive operating costs, strategic access to regional markets, and favorable investment conditions. For site selection consultants and companies evaluating expansion or relocation in Latin America, the country’s most prominent industrial parks offer scalable infrastructure, labor force availability, and logistical advantages well-suited for international manufacturing operations. This overview explores the leading industrial parks in Paraguay and provides detailed insights into their business environment, infrastructure, and cost competitiveness.

Among the most well-established industrial parks in Paraguay are Zona Franca Global, Parque Industrial Oriente, Parque Industrial Pilar, Zona Franca Trans Trade, and Parque Industrial de Hernandarias. These parks are located in strategic regions such as Asunción, Ciudad del Este, Hernandarias, and Pilar, close to major transportation routes, borders with Brazil and Argentina, and waterways like the Paraguay and Paraná Rivers. Their geographic positioning facilitates cost-efficient shipping to Mercosur countries and access to major global shipping ports in Buenos Aires and Montevideo.

Access to Markets, Labor Pools, and Suppliers

One of the most attractive features of industrial parks in Paraguay is their proximity to Brazil and Argentina, two of the largest economies in South America. Companies operating within Paraguay’s maquila system can export goods to these markets with preferential tariffs. The Mercosur trade bloc ensures reduced barriers for regional trade, while Paraguay’s free trade agreements with several nations outside the bloc allow for diversified market access.

Industrial parks are often located near metropolitan areas, providing access to skilled and semi-skilled labor pools. The city of Asunción, for example, draws workers from its surrounding districts and offers strong connectivity to industrial zones like the Zona Franca Global. Ciudad del Este and Hernandarias also provide a workforce familiar with cross-border commerce and logistics due to their proximity to Brazil’s state of Paraná.

Suppliers are increasingly located within or near these parks, creating opportunities for vertical integration and lowering the cost of inputs. Electronics, textiles, auto parts, plastics, and food processing firms make up the majority of the current tenant base in these industrial zones, contributing to emerging cluster benefits.

Transportation, Utilities, and Energy Infrastructure

The quality of infrastructure in Paraguay’s leading industrial parks supports efficient operations for international manufacturers. Most parks offer paved internal roadways, 24/7 security, on-site customs services, and direct highway access. The country’s ongoing investments in road infrastructure, such as the Bioceanic Corridor and Ruta PY01 and PY02 upgrades, improve transit times to export points. Additionally, river ports like Villeta and Pilar, as well as overland connections to the Brazilian port of Paranaguá, serve as critical trade arteries.

Electricity in Paraguay is both abundant and cost-effective, thanks to the Itaipú and Yacyretá hydroelectric dams. Industrial users benefit from some of the lowest electricity rates in Latin America, typically between $0.03 and $0.05 per kilowatt-hour—with reliable supply. Telecommunications infrastructure has expanded significantly in recent years, with fiber-optic connectivity and mobile broadband widely available across industrial zones.

Water and wastewater services are generally provided on-site or via nearby municipal systems, although some industrial parks—particularly Parque Industrial Oriente—have developed their own water treatment facilities to meet environmental standards.

Labor Availability, Costs, and Training Programs

Paraguay boasts a young and growing workforce, with a median age of just twenty-nine. Wages remain among the lowest in the region, with average monthly salaries in manufacturing ranging from $350 to $550, depending on skill level and location. Labor laws are favorable for investors, offering flexibility in terms of contract types, probation periods, and work schedules.

Union activity in Paraguay is relatively moderate compared to neighboring countries, and most foreign manufacturers report cooperative labor relations. The government encourages worker-employer dialogue while maintaining a pro-investment stance.

Technical training institutions, including the Servicio Nacional de Promoción Profesional (SNPP) and private-sector initiatives, provide workforce development programs tailored to industrial skills. Some industrial parks collaborate directly with vocational schools to offer in-house training for new tenants.

Tax Incentives, Regulatory Environment, and Ease of Doing Business

The Maquila Law (Law 1064/97) remains the cornerstone of Paraguay’s investment appeal. It offers a 1% tax on the value-added portion of goods produced for export, duty-free imports of capital goods and raw materials, and simplified customs procedures. Additionally, businesses operating in Free Trade Zones like Zona Franca Trans Trade or Zona Franca Global benefit from full exemptions on income tax, VAT, and import/export duties for eligible operations.

Paraguay ranks favorably in regulatory efficiency among Latin American peers. Company formation can be completed in under 30 days, and ongoing compliance requirements are relatively light. Environmental regulations are enforced, but not overly restrictive. Industrial parks often offer permitting assistance and help tenants meet regulatory obligations, including environmental impact studies, when required.

Real Estate, Construction, and Operating Costs

Real estate costs are a key competitive advantage in industrial parks in Paraguay. Average lease rates for industrial buildings range from $3.50 to $5.00 per square meter per month, depending on location, amenities, and park services. Build-to-suit options are available in most parks, with construction costs averaging $400 to $600 per square meter—substantially lower than in Mexico or Brazil.

Operating costs such as waste management, facility maintenance, and security services are generally included in park service packages, which cost between $0.50 and $1.00 per square meter per month. Utility expenses remain affordable, with monthly electricity bills for medium-sized manufacturers often below $10,000, even with continuous production.

Logistics and Freight Costs

Paraguay’s logistics ecosystem supports competitive freight rates, especially for companies shipping to regional markets. Truck transport to ports in Buenos Aires or Paranaguá costs between $1,800 and $2,500 per container, depending on origin point and fuel surcharges. Inland waterway transport is also a cost-effective option; container barge services along the Paraguay and Paraná Rivers allow for bulk shipments at roughly 25–30% lower rates than road freight.

Paraguay’s strategic inland location allows manufacturers to distribute goods efficiently throughout southern South America. Exporters targeting Brazil’s industrial heartland or northern Argentina can reach key markets in under 48 hours by truck.

Tenant Mix and Cluster Development

The tenant mix in industrial parks in Paraguay is becoming more diverse and sophisticated. Textile producers, automotive suppliers, agri-industrial processors, and electronics assemblers make up the majority of current occupants. For instance, Parque Industrial Oriente hosts automotive component manufacturers, while Zona Franca Global has attracted technology firms and logistics companies.

This diversity supports the formation of industry clusters, offering companies access to shared labor pools, knowledge spillovers, and input suppliers. For example, electronics companies located in Ciudad del Este benefit from a regional ecosystem of distributors, warehousing services, and component importers. These cluster effects can help reduce production lead times and enhance responsiveness to market changes.

Moreover, the record of industrial parks in Paraguay in supporting global companies continues to grow. Firms from Taiwan, South Korea, Brazil, and the United States have established operations under the maquila regime. These companies report high satisfaction with the regulatory support, low costs, and responsiveness of industrial park management.

Conclusion

For site selection consultants and manufacturing companies seeking a nearshore alternative that combines cost-efficiency, strategic location, and regulatory simplicity, industrial parks in Paraguay provide a compelling option. With access to regional markets through preferential trade agreements, a competitive tax environment, and affordable infrastructure, Paraguay is well-positioned to support both labor-intensive and value-added manufacturing.

Companies can take advantage of low lease rates, low labor costs, reliable energy, and cluster benefits in established parks such as Zona Franca Global, Parque Industrial Oriente, and Parque Industrial Pilar. As infrastructure and logistics capabilities continue to expand, industrial parks in Paraguay are increasingly being recognized as prime hubs for nearshore production in Latin America.

With an adaptable regulatory framework, training institutions aligned with industrial needs, and a growing history of successful foreign investment, industrial parks in Paraguay offer site selectors the critical variables needed for long-term manufacturing success.