We share the chief factors making Paraguay one of the region’s most attractive destinations for investment.
1. Youngest population in South America with great learning capacity. According to National Statistics Institute (INE) data, approximately:
- 27% of Paraguay’s population - almost 2 million people - are young (15-29 years of age);
- 35.6% (698 thousand) are from 15 to 19 years of age;
- 33.4% (655 thousand) are from 20 to 24 years of age; and
- 31.0% (607 thousand) are from 25 to 29 years of age.
2. Regionally competitive minimum wage. The current minimum wage is approximately USD 370 per month, making it the most competitive price in the region today.
3. Lowest social charges in the region. In Paraguay, contributions to Social Security and the retirement system are 16.5% of salary for employers and 9% of salary for employees. This contribution covers both health and retirement.
4. Vacation with no additional payment.
5. Outsourcing of services. There are no restrictions as to type of activity or time limit for outsourcing services and workforce.
6. Equal conditions for foreign and Paraguayan workers. The National Constitution guarantees equality in access to work for foreigners and Paraguayans, save exceptions in certain industries where the percentage may be limited.
7. Low unionization. Concentrated primarily in transportation and the public sector.
8. Tax and social security incentives on bonuses and additional benefits paid to workers based on net income of local entity. These benefits do not pay social security (IPS) contributions and can be deducted from company income (Law 285/93).
9. Simplified and expedient migration processes. The new Migration Law is geared to facilitating procedures for foreigners to obtain residence and engage in remunerated activities in the country.
10. Statutory benefits:
- annual bonus (aguinaldo) equal to one-twelfth of all wages earned during the year; and
- family allowance – applicable to persons earning the minimum salary, equivalent to 5% of the minimum salary. The allowance ceases in the event of earning twice the amount of the minimum salary (PYG 5,360,746/USD 736)
11. Annual salary adjustment per Consumer Price Index (CPI), applicable only to minimum salary. Paraguay is among the countries with the lowest inflation in the region. In the last period, the minimum wage increase was 5.1%.
12. Variety of contract arrangements and pay, according to type of business.
For more information, contact Marysol Estigarribia (firstname.lastname@example.org).