Paraguay: Incessant growth of the maquila operations
According to data published by the Ministry of Industry and Trade, the highest numbers of the incipient Paraguayan economy are coming from the subcontracting industry under the Maquila regime and the investments made under the umbrella of the Investment Incentives regime of Law 60/1990. The US$160 million ceiling of exports in 2013 is set to be greatly exceeded in 2014.
Investments under the maquila scheme increased 204% during the first eight months of the new government term, when compared to the same period last year and 17 new maquila programs were approved for an amount of US$ 47 million.
Maquila exports increased by 39% always compared to the same period last year.
The most profitable lines continue to be leather products, textiles and auto parts which are also the sectors that most mobilize human resources and create jobs.
Act 1064/1997 created the framework to facilitate the establishment of assembly plants or maquila factories that could profit from the country’s lower industrial and labor costs compared to other countries of the region. The Act provided further incentive to export-oriented investment, and further strengthened a legal framework, which has long given foreign investors unrestricted access in all sectors of the Paraguayan economy.
The legal scope embraces both the assembly of products and the performance of services. The National Council administers the program for the Maquila Export Industry and the Program Unit, a one-stop-shop that handles the reception and processing of all applications and approvals.
Authors: Alexander Berkemeyer & Rosa Elena Di Martino
Berkemeyer Attorneys & Counselors
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