Why 800+ Brazilian Companies Have Already Moved to Paraguay

As you read this, Brazilian executives are crossing the Friendship Bridge not to shop, but to sign factory installation contracts. The corporate exodus from Brazil to Paraguay is no longer a trend, it's an established reality.

The Difference Nobody Explains

Everyone knows corporate tax in Brazil is high, around 34%, versus 10% in Paraguay. But that comparison hides what really matters: the tax base.

In Brazil, several taxes are levied on gross revenue: PIS, COFINS, ISS, among others. You pay before even knowing if you made a profit. Made R$ 1 million in revenue? You pay tax on that million, regardless of how much was left at the end.

In Paraguay, taxation is on net profit. Made R$ 1 million in revenue but had R$ 900k in costs? You pay tax on the R$ 100k profit, not on the million. For companies with tight margins, and that includes practically all retail, manufacturing, and services, this difference can mean business survival.

Additionally, Paraguay adopts a territorial tax system. Income generated outside the country is not taxed. Zero. If you're Brazilian working remotely for a foreign company, in Brazil you pay tax on that income. In Paraguay, you pay nothing.

According to the World Bank, companies in Brazil spend about 1,500 hours per year just complying with tax obligations, nearly ten times the OECD average. In Paraguay, it's less than 400 hours. The infamous "Brazil Cost" of bureaucracy and taxes was estimated at R$ 1.7 trillion in 2023, almost 20% of GDP. That's money that could be generating jobs and growth.

Who Has Already Made the Move

We're not talking about small businesses. Giants of Brazilian industry already operate in Paraguay.

Lupo started producing socks and underwear in the country in June 2025. Riachuelo has maintained apparel operations since 2010. Buddemeyer manufactures bed, bath, and table linens. The Marisol and Malwee groups transferred part of their textile production. Even JBS, the food industry giant, has operations in the country.

According to Rediex, Paraguay's Investment and Export Network, over 800 Brazilian companies already operate in the country under various arrangements.

The Maquila Law

The Maquila regime is the main driver of this migration. For companies that export their production, taxation drops to just 1% on value added in Paraguayan territory. One percent.

The results speak for themselves: in 2024, exports under the maquila regime totaled USD 1.109 billion. In 2025, a new record of USD 1.309 billion. Maquiladoras now represent 66% of Paraguay's manufactured exports.

Energy and Labor

But taxes are only part of the equation. Paraguay hosts Itaipú Binacional, one of the world's largest hydroelectric plants. Result: the average energy cost for industries is 60% lower than in Brazil. For high energy consumption sectors like textiles, metallurgy, and refrigeration, this is decisive.

Labor costs also help. According to World Bank data, the total cost of hiring a worker in Paraguay can be up to 30% lower than in Brazil, considering taxes and benefits.

Combining lower taxes, cheap energy, and competitive labor, companies can reduce operating costs by up to 40%. That's significant.

And Brazil Just Keeps Complicating

As if that weren't enough, Brazil is implementing a tax reform running from 2026 to 2033. New taxes with new acronyms (IBS, CBS, IS), 10% withholding on dividends paid abroad, CSLL increase from 9% to 15% for financial institutions, and years of transition requiring dual compliance.

While Brazil adds layers of complexity, Paraguay maintains its simple, predictable system. A 10% tax on profit, period.

What This Has to Do With Real Estate

Here's the connection few people make: companies bring people.

Every factory installed in Asunción or Ciudad del Este brings Brazilian executives who need temporary housing. Brings technicians and managers on three-to-six-month assignments. Brings suppliers on frequent trips. Brings families of relocated employees who need a place to stay while looking for permanent housing.

These professionals don't want hotels. They want comfortable apartments with good internet, near shopping centers, with flexibility. They want a kitchen so they don't depend on restaurants every day. They want space to work. They want privacy for video calls. Exactly what a well-managed Airbnb offers.

The 91% boom in Paraguayan tourism isn't just leisure. A good portion of that growth is business tourism, executives coming and going to supervise operations that didn't exist before.

If you have property in Asunción, especially in neighborhoods like Villa Morra, Carmelitas, or Las Mercedes, your potential audience has changed. It now includes executives in transition staying one to three months, company technicians staying weeks or months, business owners evaluating the market with recurring short stays, and families in relocation who need months until finding permanent housing.

This audience pays well, takes care of the property because they're professionals, and often the company covers the costs.

The Flow Won't Stop

The tax difference is too large. The energy is too cheap. The "Brazil Cost" is too heavy. The flow of Brazilian companies to Paraguay won't stop.

The question is: will you ride this wave or watch from the sidelines?

Contact us and discover how to prepare your property for this new corporate guest profile. Demand is growing, and your property could be generating income from it.