12 mar 2019
Business meeting at CEOE

PARAGUAY’S MINISTER OF INDUSTRY AND TRADE ANALYSES BUSINESS AND INVESTMENT OPPORTUNITIES IN THE COUNTRY

The meeting was organized by CEOE, the Secretary of State for Trade and the Spanish Chamber of Commerce, in collaboration with the Embassy of Paraguay in Spain.

Today, Paraguay’s Minister of Industry and Commerce, Liz Cramer Campos, highlighted the business and investment opportunities for Spanish companies with interests in the country, during a meeting at the headquarters of the Business Confederation. The meeting was attended by the vice president of CEOE and president of CEPYME, Gerardo Cuerva; the Secretary of State for Trade, Xiana Méndez; the Director of Corporate Development of the Spanish Chamber of Commerce, Andrés Pereda, and the Ambassador of Paraguay to Spain, Antonio Rivas. The Paraguayan Minister was accompanied by her country’s Deputy Minister of Industry, Luis Alfredo Lamosas.

Business meeting Paraguay
Paraguay’s Minister of Industry and Commerce, Liz Cramer Campos, in a business meeting at CEOE — ©CEOE

The vice president of CEOE and president of CEPYME, Gerardo Cuerva, said that the strong commitment shown by the government of Paraguay through its efforts to improve market access conditions for foreign investors is valued very positively by Spanish businessmen.  The latter are paying more and more attention to this country, since it offers great competitive advantages thanks to the lower labour cost and energy abundance.

He also noted that Spanish companies, leaders in sectors such as infrastructure and energy, could make a decisive contribution to the improvement of internal communications and regional structuring, in order to improve the competitiveness of Paraguayan exports and to obtain more benefit from the country's energy potential, derived from its large water resources.

He also highlighted the importance of trade negotiations between the EU and MERCOSUR, since " this type of agreement would enable a market of more than 750 million consumers, it would help boost trade and investment and foster closer integration between the MERCOSUR economies", he said. In this regard, he also mentioned the importance of reaching an agreement to avoid double taxation, since it would help in consolidating the Spanish business presence in the country.

 

Economic situation in Paraguay

The Secretary of State for Trade, Xiana Méndez, stressed that our bilateral trade is still small, but the situation is changing. Spanish exports to Paraguay have quadrupled in recent years.  It is a country open to trade and it is expected to be the country in the region with the second highest economic growth this year, behind Bolivia. Méndez highlighted the advantages of the Paraguayan market for Spanish companies, such as the absence of restricted sectors, plenty of skilled labour, reduced taxation, the numerous energy resources and the laws to attract foreign investment.

In addition, she mentioned that the South American country has seven infrastructure tenders scheduled for the first half of this year worth €1.5 billion: She mentioned the importance of concluding the EU-MERCOSUR agreement, and the importance of strengthening air connections between Madrid and Asunción.

The Director of Corporate Development of the Spanish Chamber of Commerce, Andrés Pereda, said that Paraguay is a macro-economically stable country, since the government has made an important effort to reduce public burdens, simplify bureaucratic procedures and improve public services. He also highlighted the importance of the infrastructure plan that is being implemented in the country and mentioned key sectors for Spanish companies, such as engineering, infrastructure or services.

The ambassador of Paraguay in Spain, Antonio Rivas, emphasized the close relationship between both countries and that it has been reinforced by the efforts made by the authorities, increasing institutional and business visits. He also reported that Spain was the fifth investor in Paraguay until 2017 and, as of last year, it has become the third.

 

Business Opportunities

Paraguay’s Minister of Industry and Commerce, Liz Cramer, insisted that in order to maintain the economic stability model in the country, it is essential to continue fostering and facilitating foreign investment. "Paraguay has a population of seven million inhabitants, with a GDP growth of 4% in 2018, inflation of 3.2% and a public debt that represents 16% of GDP," she explained.

In this regard, she stressed the diversification of the economy, which has gone from concentrating on primary products to manufacturing, infrastructures and services. The Minister stated that producing in Paraguay is cheaper. In fact, she recalled that, ten years ago, an agreement to lower taxes was reached, establishing the personal income and corporate rate at 10% and VAT also at 10%

Cramer also pointed out that Paraguay represents an excellent platform to access markets such as Brazil and Argentina, due to its strategic geographic location. With regard to the benefits offered by the country, the Minister of Industry said that a system would be put in place to favour MSMEs in the country (they represent 80% of the business sector), by reducing taxes.

She also noted that the Latin American country is one of the largest producers of renewable energy worldwide and that there is a very young population that must be trained. Finally, she mentioned advantages for foreign investors interested in investing in the country, such as the "Maquila Scheme", Law 60/90, the raw material and national employment scheme, the tax advantages in the automotive sector, Law 5,542 for investments, the PPP Law (to promote, through public-private participation, investments related to the public sector) and the existing duty-free areas.