Paraguay
Land of opportunities
General Information
Paraguay, in the center of South America
Equator line
Greenwich Meridian
+4 +3 +2 +1 0
Cancer Tropic
Capricorn Tropic
Facts and figures
Area (km2) 406.752
Languages Spanish and Guaraní
Currency Guaraní
Exchange rate
(US Dollar – Guarani)
1 USD = 4.700 G
Population 6,230,143
Nominal Gross Domestic Product – GDP (Mill. US$)
16,223 Nominal Per Capita Gross Domestic
Product – GDP (US$)
2,593
Country`s Capital Asunción
Other important cities Ciudad del Este,
Encarnación, Concepción Working Age Population (WAP) 2,735,646 million
Unemployment 11% of the WAP
Brazil
Asunción
Regions of Paraguay
97%
Of total population
60%
Of the total area
40%
Of total
3% area Of total population
Total Area (km2) Population 406,752 6,230,143
Source: Dirección Nacional de Estadísticas, Encuestas y Censos (www.dgeec.gov.py)
Western Region
Eastern Region
Structural Resources
Access to attractive markets
Paraguay is located in the center of the region with the highest income of South America.
Brasil Perú
Chile
Argentina Uruguay Bolivia
Ecuador
Venezuela Colombia
Guayana
Guayana Francesa Surinam
South America
(100%)
Mercosur (70%)
Paraguay + 1.300 km Population
(MM people) 360 250 120
GDP Mill USD 2875 1948 927
GDP per capita
(USD) 7986 7792 7725
Source: 2009 Latin American Statistic Yearbook - ECLAC www.eclac.org
33% of South America s GDP
33% of South America`s Pop.
96% of South America's average per
capita Income
A Big hydrographic basin
Paraguay is located in the Center of the 5 th largest basin of fresh water in the world:
“The La Plata basin.”
Paraguay River
Paraná River Pilcomayo
River
Source: Instituto Geográfico Militar - IGM
Ideal Natural Conditions
•Average yearly temperature 24 degrees Celsius
•Average yearly rainfall : 1.200 mm.
Source: Dirección Nacional de Estadísticas, Encuestas y Censos (www.dgeec.gov.py)
Young and trainable laborforce
Paraguay has one of the youngest populations in America.
0 10 20 30 40 50 60 70
80 73,7 73,4
67,4 65,7
60,1 59,9
54,8
Population younger than 34 years old (%)
Sources: Dirección Nacional de Estadísticas, Encuestas y Censos (www.dgeec.gov.py)
Worldmapper (www.worldmapper.net)
Lower Risk of Natural Disasters
Earthquake risk Volcano eruption risk Severe weather conditions risk Tsunami risk Tectonic plaques
Source: US Geological Survey (www.usgs.org)
Quality of life
Asunción , is the 3rd. Capital of the Americas that has the lowest cost for living.
Source: Mercer Consulting Group 2010 (www.mercer.com)
Cities Ranking
Managua 1
La Paz 2
Asunción 3
Quito 4
San José 5
Guatemala 6
México D.F. 7
Kingston 8
Buenos Aires 9
Panamá 10
Santiago 11
Caracas 12
Toronto 13
Bogotá 14
La Habana 15
Nueva York 16
Regional Logistics
Rosario
Nueva Palmira Antofagasta
Paranagua ASU
An important waterway in the Region. Paraguay – Parana.
Rio Paraguay
Santos CDE
Mejillones
Conchas Corumbá
Montevideo
Sao Paulo
Buenos Aires Santiago
Santacruz
Main Commercial Centers Paraguayan free ports Important regional ports Barges
Transatlantic Ships
Source: Rediex
Expanding Roads Network
ASU La Paz
Montevideo Buenos Aires
Santiago
Sao Paulo Santacruz
Santos Campo Grande
RJ Belo Horizonte Brasilia
Porto Alegre Cuiabá
Córdoba Jujuy Salta ENC
Curitiba PJC
CDE
Ponta Porá
Resistencia
Source: IIRSA –www.iirsa.org Rosario
Antofagasta
Paranagua
N. Palmira
Mejillones Sepetiva
Agribusiness Iron Mines
Hidroelectricity Natural Gas
Agribusiness
The 2nd largest producer of ethanol
The 2nd largest producer of soybeans
Largest producer of hydroelectricity The 2nd world's freshwater
reserves
The 5th world oil reserves
Regional economics potentials
Energy for the future
Source: Administración Nacional de Electricidad (www.ande.gov.py)
ENTIDAD BINACIONAL YACYRETA
FINAL POWER: 1.550 MW
FINAL ENERGY: 10.500 GWh/AÑO PARTICIPATION: 10 %
CENTRAL ACARAY
FINAL POWER: 252 MW ENERGY: 950 GWh/YEAR PARTICIPATION: 5 %
ITAIPU BINACIONAL
POWER: 7.000 MW
ENERGY: 37.500 GWh/YEAR PARTICIPATION: 85 %
Hidroelectrical energy
Hidroelectrical power in MW
Source: Administración Nacional de Electricidad (www.ande.gov.py) 2000 2005 2010 2015 2020 2025
Demanda
Disponibilidad Oferta
0 2.000 4.000 6.000 8.000 10.000 12.000
Demanda Disponibilidad Oferta
MW 2.000 2.005 2.010 2.015 2.020 2.025
Demanda 1.120 1.354 1.831 2.374 2.987 3.780
Disponibilidad 6.290 6.056 6.929 6.628 6.015 5.222
Oferta 7.410 7.410 8.760 9.002 9.002 9.002
Demand Availability Offer
International Trade
Fuente: Banco Central del Paraguay -www.bcp.gov.py
X+M/PIB (in %)
Country 2003 2004 2005 2006 2007 2008 2009
Argentina 34 37 38 38 38 29 17
Brasil 22 25 22 21 22 23 15
Paraguay 56 61 66 69 72 79 80
Uruguay 39 46 43 45 44 48 30
%
Economic Opening
Imports/Exports
Source: Banco Central del Paraguay -www.bcp.gov.py
*Includes: Exports + Reexports
USD Millions 2002 2003 2004 2005 2006 2007 2008 2009
Exports* 1,858 2,170 2,861 3,351 4,409 5,463 7,768 6,191 Imports 2,137 2,446 3,105 3,814 5,022 6,008 8,809 6,940
Exports Imports
Market Destination %
Source: Dirección de Integración/SSEEI/MH con datos preliminares del BCP 63
53
58
62
54
49
55 54
58
49
37
47
42
38
46
51
45 46
42
51
0 10 20 30 40 50 60 70 80 90 100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Mercosur
Rest of the World
Business Climate
Paraguay has one of the lowest tax burdens in the world
Tax Burden
(Taxes / GDP)
Sources: Organization for Economic Co-operation and Development (www.oecd.org) Dirección Nacional de Estadísticas, Encuestas s y Censos (www.dgeec.gov.py)
Low tax burden
Corporate Income Tax Rate
This tax has been lowered 66% from 30% to 10% in 2004
0%
5%
10%
15%
20%
25%
30%
35%
40%
Argentina Colombia Brasil Perú Uruguay Ecuador Chile Paraguay
35% 34% 34%
30%
25% 25%
17%
10%
Source: Ministry of Finance –www.hacienda.gov.py
Personal Income Tax
Source: Ministry of Finance –www.hacienda.gov.py
Averiguar Uruguay
0 5 10 15 20 25 30 35 40
Paraguay Uruguay Ecuador Brasil Peru Colombia Argentina Chile
10
25 25
28
30
35 35
40
Value Added Tax (VAT)
0% 5% 10% 15% 20% 25%
Brasil Uruguay Argentina Chile Perú Colombia Ecuador Paraguay
25%
23%
21%
19%
19%
16%
12%
10%
Source: Ministry of Finance –www.hacienda.gov.py
Foreign Direct Investment (FDI)
Source: BCP
MM USD
2002 2003 2004 2005 2006 2007 2008 2009 5.9 30.1 33.7 47.1 166.5 177.1 237.6 290.5
USD Millions
FDI by Regions and Sectors
Source: BCP
Macroeconomic Stability
Source: Banco Central del Paraguay
- www.bcp.gov.py
* Projection for 2010, according to preliminary data of the BCP
Economic Growth
3,8 4,1
2,9
4,3
6,8
5,8
-3,8
9
-6 -4 -2 0 2 4 6 8 10
-15.000 -10.000 -5.000 0 5.000 10.000 15.000 20.000
2003 2004 2005 2006 2007 2008 2009 2010* Variation (%)
GDP ( USD Mill.)
GDP Evolution of Paraguay
PIB (Millones USD)GDP (USD Mill.) Variación (%)Variation (%)
GDP Share by sectors
Source: Banco Central del Paraguay -www.bcp.gov.py
Agriculture 28 %
Manufacturing 13 %
Construction 4%
Commerce & Services 56%
Inflation
Source: Banco Central del Paraguay -www.bcp.gov.py
Fiscal Balance/GDP
Source: Ministerio de Hacienda -4,64
-1,2
-3,24
-0,4
1,61
0,8 0,5
1
2,6
0,4
-6 -5 -4 -3 -2 -1 0 1 2 3
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Series1
International Reserves
Source: Banco Central del Paraguay -www.bcp.gov.py 0
1000 2000 3000 4000
2002 2003 2004 2005 2006 2007 2008 2009
641
3.857 2.638
2.420 1.980
1.297 1.168
983
Millions USD
External Debt/GDP
Source: BCP
Average (%)
Investment Incentives
60/90 Investment Law
Import tariff on Capital Goods
(machinery and equipment)
Taxes on capital transfer
(applied for investments of more than USD 5MM)
0%
Source: Ministry of Finance –www.hacienda.gov.py
0%
Value Added Taxes (IVA) on import
of Capital Goods 0%
MERCOSUR rules of origin
Paraguay enjoys special treatment regarding rules of origin of manufactured products until 2023
It is easier to acquire origin in Paraguay vs. Mercosur
-10%
0%
10%
20%
30%
40%
50%
60%
Brasil Uruguay Argentina Paraguay
60% 60% 60% 40%
Necessary regional content %
* If the service is provided by a Company established in Paraguay
Source: Mercosur 01/04 decision –www.mercosur.int
•Raw materials
•Parts &
components
•Labor
•Services
•Energy, water
•Import Freights*
Extra-zone
imported components
40%
60%
Maquila Regime
TO PRODUCE:
• GOODS AND SERVICES FOR EXPORT
Contract MAQUILA
ENTERPRISE HEAD
OFFICE
SUB MAQUILA ENTERPRISE
Single tax rate of 1% over sales invoicing
10% of production could go to
the internal market
How does it work?
1. Tariff and taxes suspension over temporary import of Capital Goods, Raw Materials, Parts and Components.
2. 1% Overall Tax paid on the basis of the added value through the operations in Paraguay
1%
Tax
Maquila Regime
100.000 Teddy Bears / year USD Imported Raw materials from extra-zone 500.000 Value added in Paraguay
(local raw materials, labor, energy, etc.) 200.000 Logistic and commercial costs to reach
client 100.000
Final Cost 800.000
USD 2.000
x =
For Example:
Investment Opportunities
Important Potential Sectors
Meat & Leather
Forest Products
Tourism
Cotton, textil & apparel
Biofuels
TIC’s
Important Potential Sectors
Stevia
Fruits & Vegetables Ecoturism Infraestructure
Metalurgic Call Centers
Oils
Energy
Infraestructure projects
Source: MOPC
Fuente: CIP
M I C
Millicom
International
Celular S.A
Fuente: CIP
BANCO DO BRASIL
