Why Brazilian Companies Are Moving to Paraguay and How to Finance the Operation

More Brazilian companies are adding factories, subsidiaries and operating entities in Paraguay.

The numbers now make the trend hard to dismiss. Poder360 reported in May 2026 that 232 Brazilian companies had entered Paraguay's Maquila regime since 2007, accounting for roughly 70% of the foreign maquila companies operating there. Brazil also remains Paraguay's largest source of foreign investment. Read the Poder360 analysis.

Recent arrivals span textiles, footwear, plastics, food, chemicals, auto parts and agribusiness. Karsten opened its first Paraguayan factory in Minga Guazú in March 2026. JBS announced a $70 million investment in Paraguay in 2025. Lupo, Dass and BOOS Mangueiras have also established production there.

Many of these companies are adding Paraguayan operations rather than abandoning Brazil. They can produce from Paraguay while remaining deeply connected to Brazilian customers, suppliers and capital.

That creates another problem once the company crosses the border: the factory may be in Paraguay, but much of the money still moves to and from Brazil.

Why Brazilian companies are expanding into Paraguay

Several advantages tend to appear together.

Paraguay's standard corporate income tax, the Impuesto a la Renta Empresarial, is 10% of net income. Paraguay's DNIT publishes the current IRE rate here.

Export-oriented manufacturers can receive much more specific treatment under Paraguay's Maquila regime. The current regime charges a 1% single tax, calculated on the higher of Paraguayan value added or the relevant export invoice value. The official program also provides customs-tax suspension and specified exemptions from IRE, dividend tax and non-resident income tax for qualifying maquila operations. Mercosur exports can receive zero tariffs when origin requirements are met.

Paraguayan officials also cite lower electricity and labor costs, geographic proximity and a less expensive operating structure when explaining Brazilian investment. Much of Paraguay's electricity comes from hydroelectric generation, giving electricity-intensive manufacturing another reason to study the market.

The result is especially attractive for manufacturers that can produce in Paraguay and sell into the wider Mercosur market.

Paraguay's new Maquila Law arrived at the right time

Paraguay updated the regime through Law 7,547/2025, which replaced the earlier Maquila law. President Santiago Peña signed its implementing decree in April 2026.

The revised framework expressly includes export services and updates administrative procedures for companies applying to the program. The Ministry of Industry and Commerce explains the current framework here.

Investment has accelerated alongside it.

During the first half of 2026, Paraguayan exports under the Maquila regime reached $717 million, 25% above the same period in 2025. Brazil bought 62% of those exports, while Argentina accounted for another 15%. See Paraguay's official July 2026 figures.

That explains part of the economics. Brazil remains the natural market for many Paraguayan factories.

Agribusiness started the relationship long before manufacturing

Brazilian involvement in Paraguay did not begin with the latest factory announcements.

Brazilian farmers have played a major role in the development of Paraguay's soybean, livestock and border economies for decades. The AgriBiz traces several waves of Brazilian agricultural migration and notes that today's expansion increasingly includes agribusiness companies, biological-input producers, meat processors and farmland operators. Read The AgriBiz report.

Manufacturing is now widening that relationship.

Textiles and apparel alone account for 89 of the 232 Brazilian maquila companies counted by Poder360. Plastics, aluminum, chemicals, food, electronics and automotive parts make up much of the rest.

The payment problem between Brazil and Paraguay

A Brazilian company can manufacture in Paraguay and sell heavily into Brazil. Its financial operations then have to keep up with its physical supply chain.

Companies today have several ways to move money across the border.

Traditional international bank transfers can use USD and SWIFT. Brazil and Paraguay also operate the Sistema de Pagamentos em Moeda Local, or SML. The system allows qualifying payments to settle in BRL and PYG without inserting the US dollar as an intermediary currency. Banco Central do Brasil explains the SML here.

The SML already handles meaningful trade. In 2024, Brazilian exports to Paraguay processed through SML totaled about R$830 million, while Brazilian imports through the system totaled roughly R$162 million.

Its operating model still feels more like a bank-based cross-border process than Pix. A Brazilian sender needs a participating financial institution and the Paraguayan beneficiary's banking information. The official procedure provides for settlement to the Paraguayan institution on D+2.

Pix works instantly in Brazil. Paraguay has built its own instant network.

The domestic infrastructure on each side is much faster.

Brazil has Pix. Paraguay's Central Bank operates its Sistema de Pagos Instantáneos, now part of the country's SIP payment infrastructure. In March 2026, Paraguay raised the maximum instant-transfer amount to ₲10 million and made those transfers available 24 hours a day, seven days a week. The beneficiary institution has up to five seconds to credit an eligible SPI payment. See the BCP payment-system information.

The missing piece is the connection between them.

Paraguay's Central Bank said in April that cross-border transfers are part of SIP's medium-term roadmap. Brazil's Central Bank said on August 10, 2026 that it is studying connections between Pix and foreign instant-payment systems.

For a company with operations on both sides of the border, domestic payments can take seconds while the international leg still requires a separate cross-border workflow.

Specie plans direct BRL to PYG business payments

Specie is working on support for direct BRL to PYG and PYG to BRL business payments, designed to remove the need to route eligible payments through SWIFT.

The planned experience is straightforward: a company operating in Brazil can fund a business payment in BRL and its Paraguayan counterparty can receive PYG through local payment infrastructure. The reverse corridor would support Paraguayan businesses paying into Brazil.

Specie's current infrastructure already supports instant BRL pay-ins and payouts through Pix, while global SWIFT remains available for international payments. Its current pricing sheet lists Pix settlement as instant and global SWIFT settlement from T0 to T3. Specie's broader platform connects local rails such as Pix, ACH, SEPA and SPEI to cross-border business payment workflows.

See how Specie's payment model works.

The BRL-PYG corridor is planned as an extension of that model. Availability, limits, pricing and settlement details will depend on the final rollout and applicable compliance requirements.

Brazil is leading, but interest extends beyond Brazilian companies

The evidence supports a broader regional trend, although Brazil remains far ahead.

Paraguay's Ministry of Industry and Commerce recently hosted a delegation of 40 Argentine businesspeople interested in the country's tax incentives, Maquila regime and Law 60/90. Argentine industrial group Corven separately explored building a new motorcycle and auto-parts facility in Paraguay in March 2026.

Maquila investment also includes capital from Argentina, Uruguay, the United States, Europe and Asia. Current reports still put Brazilian capital at roughly 70% of the sector.

So describing this as a South American rush to Paraguay would go too far. The evidence shows a strong Brazilian movement and early signs that companies elsewhere in the region are evaluating many of the same economics.

What this means for companies operating in Brazil and Paraguay

Opening a Paraguayan entity solves only one part of the operating question.

A company still needs to collect Brazilian revenue, fund its Paraguayan operation, pay suppliers, manage BRL/PYG exposure, document cross-border transactions and reconcile payments across two financial systems.

As trade between the countries grows, the payment layer should become easier to operate.

Specie plans to support that corridor directly.

If your company already operates between Brazil and Paraguay, or is setting up an entity there, talk to Specie about upcoming BRL-PYG payment support and the corridors available today.