Paraguay has quietly become one of South America’s most compelling investment destinations. With consistent 4% annual growth, a stable currency, and a favorable regulatory environment, this landlocked country steadily draws attention from international businesses. Aldo Benítez Cabrera, a seasoned lawyer and board member of the Chamber of Maquila Companies, recently offered a detailed analysis of the country’s economic development and the attractive investment opportunities in Paraguay.
A Strong Foundation for Growth
According to Benítez Cabrera, Paraguay has experienced a decade of uninterrupted growth, averaging 4% annually. Institutions such as the Getulio Vargas Foundation, the Inter-American Development Bank (IDB), and the Development Bank of Latin America (CAF) have all recognized Paraguay’s consistent performance, distinguishing it from more volatile economies in the region.
“A key differentiator for Paraguay has been policy continuity,” said Benítez Cabrera. “Regardless of which party is in power, the support for foreign investment has remained steadfast.” This consistency has contributed to a business climate where long-term planning and stable returns are possible.
Pro-Investment Policies and Legal Framework
Paraguay’s favorable investment climate is underpinned by robust legal tools that incentivize industrial development. Benítez Cabrera highlighted two primary mechanisms: Law 60/90, enacted in 1990, and the Maquila Law, which has been operational since 2000.
Law 60/90 offers tax exemptions for investors, including benefits on imports of capital goods and inputs, profits reinvested in the country, and even dividends distributed abroad. The Maquila Law provides a framework that allows companies to import raw materials tax-free, process them in Paraguay, and re-export the finished products. In return, these companies must generate jobs and increase the country’s export base.
These policies form the legal backbone that supports some of Paraguay’s most promising investment opportunities, especially in manufacturing and export-driven sectors.
A Hub for the Automotive Supply Chain
One of Paraguay’s standout industrial success stories is its emergence as a key player in the global automotive wiring industry. “We have six of Paraguay’s eight largest wire harness manufacturers installed,” Benítez Cabrera stated. “We produce wiring for Volkswagen, Hyundai, Kia, and Toyota vehicles and export to the world.”
This niche—but labor-intensive—segment of the automotive industry relies heavily on skilled manual labor. Although some aspects of cable production are automated, most of the process remains manual, generating thousands of jobs. Paraguay is home to over 15,000 workers in this sector, producing cables for vehicles ranging from Toyota Hilux pickups to double-cab Honda trucks, which are assembled in the U.S.
Even cutting-edge automakers like Tesla continue to use handmade wiring harnesses, demonstrating the durability of this sector as a leading investment opportunity in Paraguay.
Employment and Economic Ripple Effects
The maquiladora sector has become a major driver of Paraguay’s formal economy. With more than 30,000 direct jobs and $1.1 billion in exports, it makes a significant contribution to GDP and job creation. “We’re talking about 30,000 families,” Benítez Cabrera emphasized. “Add the indirect and induced jobs, and the ripple effect is tremendous.”
This impact extends into local communities, where wages from maquila jobs are spent on groceries, healthcare, clothing, and other everyday essentials, stimulating further economic activity. The money entering Paraguay through exports becomes “clean money” and is distributed throughout the economy, benefiting service providers and other businesses that may not be directly involved in manufacturing but still reap the benefits.
Such positive socioeconomic externalities underscore why the maquila model is among Paraguay’s most impactful investment opportunities for foreign firms looking to integrate local labor and production into global supply chains.
Stability That Inspires Confidence
Another often-overlooked advantage of doing business in Paraguay is the country’s stable national currency. “The guaraní is 80 years old. We’ve never removed a single zero,” said Benítez Cabrera. This long-term monetary stability contributes to investor confidence and economic predictability, starkly contrasting with neighboring countries like Argentina and Brazil, which have undergone repeated currency reforms due to hyperinflation
Currency consistency, combined with business-friendly regulations and government neutrality toward foreign investment, makes Paraguay stand out in a region where economic volatility is more the norm than the exception.
Leading Growth Sectors Beyond Manufacturing
While the maquila and automotive industries are among the most visible examples, Paraguay’s economic expansion extends beyond manufacturing. Key sectors experiencing robust growth include:
- Agribusiness: Paraguay is a global exporter of soybeans and beef, with vast fertile land and low production costs.
- Livestock: Meat production, especially beef, continues to expand in volume and international reach.
- Construction: Urban expansion and infrastructure development fuel demand for construction materials and labor.
- Light Industry: Beyond automotive parts, textiles, plastics, and food processing are gaining momentum.
These sectors represent diversified investment opportunities in Paraguay for international firms seeking to enter emerging markets with low overhead costs and high return potential.
A Personal Perspective from a Business Insider
With more than two decades of experience advising companies that have expanded into Paraguay, Benítez Cabrera views the country’s evolution as personal and professional. “I was in the right place at the right time when this new Paraguay was beginning to take shape—an industrialized Paraguay aiming to create new formal economic drivers to generate GDP and jobs that draw people out of the informality we were so used to.”
His insights reflect a profound transformation taking place in Paraguay. From a historically agrarian society to a dynamic, export-oriented economy, the country opens new chapters by deliberately cultivating its manufacturing base and enforcing policies that favor long-term, sustainable investment.
Why Investors Should Pay Attention
As global companies seek cost-effective, reliable, and stable environments to expand their operations, Paraguay stands out as a hidden gem in South America. The country’s political consistency, legal incentives, labor availability, and macroeconomic stability offer a compelling case for multinational firms.
Paraguay’s investment opportunities continue to expand in automotive components, agribusiness, light industry, and infrastructure. Paraguay presents an open door with tangible returns for investors seeking growth markets outside traditional hotspots.