PARAGUAY LAND OF OPPORTUNITIES PARAGUAY AND SOUTH AFRICA TRADE AND - PowerPoint PPT Presentation

PARAGUAY LAND OF OPPORTUNITIES

PARAGUAY AND SOUTH AFRICA TRADE AND BUSINESS OPPORTUNITIES

TRADE BALANCE BETWEEN PARAGUAY AND SOUTH AFRICA COMMERCIAL EXCHANGE - USD MILLION 120 100 High exports of 80 soybeans and corn in 2015 and 2016 60 40 20 0 2013 2014 2015 2016 2017 2018 2019 Jan-Jun 2020 IMPORT EXPORT Datos: BCP / MIC

POTENCIAL DE SUSTITUCIÓN DE IMPORTACIONES DESDE ASIA COMMERCIAL EXCHANGE BETWEEN PARAGUAY AND SOUTH AFRICA YEAR 2019 PARAGUAY EXPORTS TO SOUTH AFRICA SOUTH AFRICA EXPORTS TO PARAGUAY PRODUCT USD MILLION PRODUCT USD MILLION Polymers of propylene 2.91 Paper and paperboard 1.32 Flour of meat 0.28 Spirits, liqueurs and similar 1.17 beverages Rice 0.25 Pneumatic tyres 0.60 Television cameras 0.29 Animal bile and glands for 0.15 pharmaceutical production FUENTE: BCP Y VUE

POTENCIAL DE SUSTITUCIÓN DE IMPORTACIONES DESDE ASIA EXPORT POTENTIAL FROM PARAGUAY TO SOUTH AFRICA TOP 6 PRODUCTS OIL CAKE OF CRUDE CORN SOYBEANS WHEAT RICE SOYA-BEAN SOYBEAN OIL OIL FUENTE: https://exportpotential.intracen.org

POTENCIAL DE SUSTITUCIÓN DE IMPORTACIONES DESDE ASIA EXPORT POTENTIAL FROM SOUTH AFRICA TO PARAGUAY TOP 6 PRODUCTS INSECTICIDES, DIESEL RODENTICIDES TELEPHONES PEACHES, MOTOR POWERED , FUNGICIDES, BEER AND MOBILE PREPARED OR VEHICLES FOR TRUCKS HERBICIDES & PHONES PRESERVED PASSENGERS SIMILAR FUENTE: https://exportpotential.intracen.org

PARAGUAY - YOUR BUSINESS PLATFORM IN THE REGION

PARAGUAY IN THE CENTER OF SOUTH AMERICA

COUNTRY PROFILE (DEMOGRAPHY AND GEOGRAPHY) OFFICIAL NAME Republic of Paraguay CAPITAL Asunción 17 Departments and POLITICAL DIVISION Capital District SURFACE 406,752 km2 OFFICIAL LANGUAGES Spanish and Guarani Paraguay CURRENCY Guarani (PYG) POPULATION (2020) 7,252,672 GOVERNMENT SYSTEM Presidential Republic Mario Abdo Benítez PRESIDENT (2018-2023) LITERACY RATE 94.3% UNEMPLOYMENT RATE 5.8% (2018) SOURCES: BCP, DGEEC

MAIN ECONOMIC INDICATORS GROSS DOMESTIC PRODUCT - GDP USD 38.6 bn (2019) GROSS DOMESTIC PRODUCT PER USD 5,513 CAPITA (2019) GDP GROWTH (2019) 0.0% GDP GROWTH for 2020 -2.5% (BCP projection) INFLATION (2019) 2.8% FOREIGN CURRENCY RESERVES USD 8.5 bn (may 2019) EXCHANGE RATE (May 2020) 6,518 (Gs./USD) PUBLIC EXTERNAL DEBT USD 7.8 bn (december 2019) (18.5% of GDP) ECONOMICALLY ACTIVE 3,659,982 (51.2% of POPULATION (2019) total Population) SOURCES: BCP / DGEEC

GROWTH OF PARAGUAYAN GDP 45.000 14,0 40.000 12,0 35.000 10,0 30.000 8,0 GDP USD Millions) Variiation % 25.000 6,0 20.000 4,0 15.000 2,0 10.000 0,0 5.000 -2,0 0 -4,0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (Proyección) PIB (Millones USD) Variación del PIB Paraguay maintained positive growth despite the volatility of Brazil and Argentina in recent years and has the lowest projected decline in the region for 2020. FUENTE: BCP, año base: 2020

GDP COMPOSITION Agriculture 7% Taxes 8% Livestock 2% Governmental services 10% Forestry, fishing, mining 1% Manufacturing 19% Home services 5% Restaurants and hotels 3% Company services 3% Real estate 7% Construction 6.0 Finance 6% Electricity and water 8% Telecommunications 3.0 Transport 4% Trade 11% SOURCE: BCP, yaer: 2019

EXPORT COMPOSITION VALUE AND COMPOSITION OF THE EXPORTS VALUE AND COMPOSITION OF EXPORTS EXPORTS WITH ADDED VALUE (Millions USD) USD 2.500 millions / 2003 USD 2,500 millions / 2003 1.200 Manufactures of 999 Industrial Origin Primary Primary Manuf. of 1.000 MIO Energy Energy MAO MIO products Products Agrarian Origin 4% 50% 50% 17% 4% 29% 29% 17% 800 752 Maquila Regime 600 Exports USD 7,962 millions / 2019 USD 7.962 millions / 2019 400 295 Primary Primary Manufactures of MIO MAO Energy Energy MIO products Products Agrarian Origin 13% 200 33% 24% 24% 13% 31% 31% 33% 53 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 MAO: Manufactures of Agrarian Origin MIO: Manufactures of Industrial Origin SOURCE: BCP

FDI Evolution FDI STOCK IN MILLIONS USD 8.000 7.214 6.735 7.000 6.172 6.000 5.000 4.000 3.000 2.000 1.000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 FUENTE: BCP

FDI COMPOSITION BALANCE OF FDI IN MILLIONS USD AT THE END OF 2018 MAIN COUNTRIES OF ORIGIN MAIN INVESTMENT SECTORS 1400 1400 1,266 1,154 1200 1,091 1200 1000 916 1000 904 780 800 735 713 800 600 387 355 326 314 294 237 600 363 489 400 431 155 140 124 99 400 309 307 269 264 252 222 220 205 150 200 0 200 0 SOURCE: BCP

COUNTRY RISK QUALIFICATION EVOLUTION OF THE RATING OF PARAGUAY SOURCES: Standard and Poor’s, Moody’s, Fitch Ratings

TAX SCHEME TAXES 10%* 30% 25% 34% 25% Top corporate tax rate 10% 35% 36% 28% 13% Maximum personal tax rate 10% 21% 22% 17% 13% Common indirect tax rate (e.g. VAT) Total referential of taxes and social 35% 106% 42% 65% 84% contributions (according to the World Bank) * If the utilities are converted in dividends, there is a tax of 15% of the remaining amount. Together, these three taxes reach a top of 23.5%. SOURCES: FDI Intelligence, Ministry of Finance

TAX REFORM IMPACT ON THE TAX EFFECTIVE CHARGE FOR FOREIGN COMPANIES VIGENTE HASTA 2019 VIGENTE A PARTIR DE 2020 10% 10% 15% 5% TAX ON TAX ON PROFITS PROFITS TAX ON DIVIDENDS 0% TAX ON THE 15% DISITRIBUTION TAX ON PROFIT TAX ON PROFIT OF PROFITS REMITTANCES REMITTANCES IRE IDU 0% 10% 13,5% IRACIS REMITTANCES 14,5% 12,8% OR TAX ON NON-RESIDENTS INR TOTAL CHARGE = 27,3% 13,5% TOTAL CHARGE = 23,5% SOURCE: Ministry of Finance

LABOR REGIME Established according to the Paraguayan Labor Code (Law 213/93 and ammendments) PAYED HOLIDAY OTHER IMPORTANT DATA WORKING HOURS: 48 per week • TIME IN COMPANY PAYED HOLIDAY CHRISTMAS ALLOWANCE: 1 allowance at • end of year (the 1/12 part of the yearly 0 to 5 years 12 working days obtained salary) LEGAL MINIMUM WAGE (07/2019): Gs. • More than 5 to 10 years 18 working days 2,192,839 (USD 336) Permits for maternity and nursing • More than 10 years 30 working days Social Insurance (IPS) Employer: 16.5% Employee: 9% * For further information about the labor legislation, see the Law 213/93 (Labor Code), and their amendments and implementation rules.

ENERGY COST IN CENTS OF USD PER KWH (2019) MEDIUM INDUSTRIAL TENSION Bolivia 21.58 Uruguay 16.93 Colombia 14.40 Chile 14.16 Brazil 14.07 Peru 11.79 Ecuador 10.09 Argentina 8.57 Paraguay 5.17 0 5 10 15 20 25 The surplus of electricity produced by the Itaipú and Yacyretá hydroelectric plants, corresponding to Paraguay, is exported to Brazil (78%) and Argentina (22%). In July 2019, the National Congress approved a new program to strengthen the With this, Paraguay is one of the largest producers and exporters of transmission of electric energy that includes two new 500 kV lines, in addition renewable energy in the world. to the expansion and improvement of the distribution system that allows the Electric power is currently the second export product in the country. full supply of large parts of the national territory. SOURCES: ANDE, CIER

PREVENTION MEASURES COVID-19 Inteligent Quarantine – Phase 3 (June 14 to August 19) AUTHORIZED ACTIVITIES RESULTS Openings of businesses • (AS OF July 28, 2020) Private and public works CONFIRMED CASES: 4548 • • Corporate offices (50% of staff) RECOVERED: 2905 • • Artistic, cultural and sports (without spectators) DEATHS: 43 • • Industry in general With an incidence of 0.146 deaths per 100,000 • inhabitants, Paraguay is among the least affected Services delivered to homes related to essential • countries in the region. activities The import and export flow of goods is allowed. The borders remain closed to foreigners, except with special authorization from CODENA. No commercial flights are allowed. The return of Paraguayan citizens and residents, with mandatory supervised quarantine is allowed. * Sources: Ministry of Health and Public Welfare

INCENTIVES FOR NATIONAL AND INTERNATIONAL INVESTMENTS

KEY FACTS FOR INVESTMENT IN PARAGUAY Greater projected Economic Lower indirect Lower corporate Lower energy economic resilience to tax rate in the rate in the costs in the growth in Latin external effects region region region America between (crisis in Argentina and Brazil) 2020 and 2014 (according to IMF) Structural Macroeconomic Growing reforms of the Youngest Low public debt discipline economic National population in level (fiscal deficit limit diversification Government in the region set at 1.5% of GDP) implementation SOURCE: MIC/REDIEX

60/90 Investment Incentive Law Import tax on Capital Goods 0% (Machinery and Equipment) Value Added Tax (VAT) on Capital Goods 0% (Local or foreign acquisition) DEBT: Tax applied on remittances and payments of Interests (for investments equal or 0% higher than USD 5 million) GAINS: Tax applied on remittances dividends and utilities 0% (for 10 years for investments equal or higher than USD 5 million) SOURCE: MIC/REDIEX