PARAGUAY LAND OF OPPORTUNITIES
PARAGUAY LANDOF
OPPORTUNITIES
PARAGUAYTODAY…
TheBest
InvestmentClimateinthe
region(GV)
Top5 RegionalRanking
“DoingBusiness”(WB)
2° Countrywithbest
ROIinSouthAmerica (22%)
WorldClassFoodProducer
LogisticHubFortheRegion
YoungPopulation
(70/35)
Competitive
Platformfoodtoworld,productsand
servicesfortheregion
Stable,solvent,predictibleandreliableeconomy.
(Netcreditor2to1)
CONSOLIDATIONOFMACROECONOMICSTABILITYParaguayEconomicGrowth
1992-2014* ARecordofPriceStability
Annual Inflation
InternationalReserves (%ofGDP)ExchangeRegime
Source: Bloomberg
OURLATESTHIGHLIGHTSARE…
MostCompetitiveTaxScheme
10,10,10
Reestablishedmarketsanddiplomaticagreements
Lessthan 5%ofannualinflationforthe
past5years
60%annualgrowthin
MaquilaExports
GrowingRate ofFDI
60% NewInvestments(Paraguayancapital)
Applicationsto
opennewbusinesseshave
tripled
Monetarystabilityforthepast70years. (TheGuaraníisthemost
stablecurrencyinSouthamerica)
4,5% GDPgrowth(average)forthepast
10years
PARAGUAYINTHEWORLD
RENEWABLEENERGY
1st STEVIAPRODUCER
2ndPRODUCERANDEXPORTEROFYERBAMATE
3rdFLEETOFBARGE
3rdSOYBEANEXPORT
4thWORLDEXPORTEROFYUCASTARCH
4th
MAJOREXPORTEROFSOYBEANOIL
4thMAJOREXPORTER
OFSOYBEANEXPELLER
5thMAJORSOYBEAN
PRODUCER
6thMAJORCORNEXPORTER
6thMAJORWEATEXPORTER
10thMAYORBEEFEXPORTER
6thMAYORBEEFEXPORTER
6th
FLEETOFBARGE
3rd
CONTINUOUSIMPROVEMENTSINCOUNTRYRISKRATING
Country Risk Rating
Cre
dit R
atin
gs
OURVISION
POVERTYREDUCTION
INCLUSIVEECONOMICGROWTH
INSERTIONOFPARAGUAYINTHE
WORLD
“A World Class food producer; open and connected to the world; with high rates of development, rule of law and public safety;
environmentally sustainable; with women inclusion and young entrepreneurship as trademark; and a Government that promotes
solidarity, transparency and zero tolerance to corruption”
STRONGCOMMITTMENTTOIMPROVINGINFRASTRUCTURE
USD16,480millionoftotalinvestmentwithinthenext5years:
Fuente:MinisteriodeHacienda
MAININFRASTRUCTUREINVESTMENTS
PROJECT1:Improvementsofroads: -3,200kmofconstructionofroads -15,000kmofmaintenanceofroads -12,000mlreplacementofwoodenbridges
18212,00 1.296.000.000
PROJECTS2013-2018 LONGITUDE(KM) APROX.COST(USD)
PROJECT2:RoutesNr.1,2,6y7andnetworks 800,49 1.296.000.000
PROJECT3:WaterandSanitationProjects ------- 900.000.000
PROJECT4:Waterway ------- 104.000.000
PROJECT5:Route9andnetworks 1045,77 926.640.000
PROJECT2013-2018 LONGITUDE(KM) APROX.COST(USD)
PROJECT6:MainElectricityPlan ------- 2.573.000.000
PROJECT7:ManagementandMaintenanceSystemsforRoadNetwork-.RoadTolls(11)andfreight(10)
5300,00 560.000.000
PROJECT8:Villeta–Pilar-PasodePatriaRoutes 346,25 346.852.500
PROJECT9:Curuguaty-PedroJuanCaballeroRoutes 285,83 242.315.000
PROJECT10:AccessaSecondBridge(Paraguay-Brazil).(RuralAccess,UrbanAccess,ACI)
47,00 172.787.000
PROJECT11:UrbanElectricTrain 44,00 250.000.000
TOTALINVESTMENT 8.359.624.500
LEGALFRAMEWORKORIENTEDTOENHANCE COMPETITIVENESS
FiscalResponsibilityActPublic–PrivatePartnership
Act5074Act
Investment Security Act: In Process
TaxScheme10:10:10
ImplementationoftheVision "SimpleCountry"-“Serious
Country“
GDPGROWTH
-8%
0%
8%
15%
23%
30%
2012 2013 2014 2015 2016 2017 2018
6,8%6,6%6,8%6,6%
4,8%
13,6%
-1,2%
2,7%2,5%2,7%2,5%0,7%
GDP_Basic GDP_Addi_onal PIBTotal
AVAILABLERESOURCES
YOUNGLABORFORCE
RAWMATERIALWITHQUALITYANDLOWERCOST
GOODFINANCIALFORESCAST
CLEANELECTRICITYWITHLOWERCOST
STRATEGICLOCATION
ECONOMICSTABILITY
LOWESTTAXBURDENINTHEREGION
SUSTAINABLEECONOMICGROWTH
COMPETITIVETAXSCHEME
ParaguayhasthemostcompetitiveTaxSchemeinthe
Region
INCOME: Income on dividends and profits (For Investing> USD 5 mn for 10 years)
0%
DEBT: Tax on remittances, Capital, Interest and Commissions (Per Investment > USD 5 mn)
0%
(VAT) Capital Goods (Inside and outside the country)
0%
TariffsonCapitalGoodsImport(MachineryandEquipment).
0%TAXES PY AR UR BR
CorporateIncomeTax(*)
≤10% 35% 25% 34%
PersonalIncomeTax 10% 35
% 25% 27,5%
ValueAddedTax(VAT) ≤10% 21
% 23% 25%
(*)Obs:Ifdistributedinternationallymaybeupto
27.5%.
+ =
Source:Treasury(www.hacienda.gov.py
Sector CompetitiveFactorsParaguayvs.Brazil
• Clothing• Footwear• Autoparts• Electronics• Agriculturalproducts• ChemicalproductsandMetalwork
Labor
Trainedlaborforce
MachineOperator
Untrainedlaborforce
(-)53,2%.(-)29,3%.(-)35,2%.
Wage/Hours
(AverageinUSD)AverageWage/Month (-)20,7%.
YoungPopulation (+)8,0%.Electricitycost USD/MWh (-)63,6%.
TaxVAT (-)63,2%.
(-)60,0%.INCOMETAXSource:SupplyChainReport,IPIE-IDB,progressreport,jan2014
OPPORTUNITIESTOEXPLORE
AttractindustriesfromArgentinaandBrazil,throughtheGSP+(ExportablecompetitivenessfromParaguay)1
ARGENTINA Y BRASIL UNIÓN EUROPEA
AttractEuropeanIndustriesconsideringthedirectandpreferentialaccesstoMercosur.3
MERCOSUR+CHILE U.E.
Empowerthelocalmarketandinvestmentconsideringthe increasedcompetitiveadvantages.2
PARAGUAY UNIÓNEUROPEA
Fuente:análisisArthurD.Little
Attract European Industries to Paraguay to export to the E. U.
A BAttract European Industries to Paraguay to export to Mercosur and Chile.
B
A
CLOTHINGMANUFACTURE
FOOD
PLASTICARTICLES
INSECTICIDESANDOTHERPESTICIDES
LEATHER
ANIMALFEEDANDOTHERANIMALFOODS
SHOES
12,0% 0,0%
12,2% 0,0%
6,5% 0,0%
6,5% 0,0%
5,5% 0,0%
9,6% 0,0%
17,0% 0,0%
SECTORS MFNTARIFFS GSP+TARIFFS
Source:ANDE,Eurostat,CIER,U.S.BureauofLaborStatistics,KPMGstatistics,OandayanálisisArthurD.Little
INCOMETAX 2012
VALUEADDEDTAX (VAT)2013
ENERGYPRICING-INDUSTRIALSECTOR Year2012(USDxMWHWITHOUTTAX)
LABORCOST2012 (USDxHOUR)–SOCIALCOST
MainCompetitiveAdvantagesinParaguayforCompanies
124216
575712,9
4,2
21,9
6,0
26,3%34%35%
10%
21,4%20,5%21%
10%
-81%-29%-68%
% Diferencia de Paraguay
(2)
-54%-74%-0%
-62%-71 %-71% -53%-51%-52%
(3) (3) (3) (2)(1)
Paraguaycanincreaseitsagriculturaloutputby300%with:
Technology IrrigationSystem
TerritorialPlanning
ParaguayregaineditsstatusfromtheWorldOrganizationforAnimalHealth(OIE)asfreeofFootandMouthDisease(FMD)withavaccinationregime.
ExportsfromParaguay
0
200
400
600
800
1000
1200
1400
1600
Brasil India Australia EEUU N.Zelanda Paraguay Uruguay Canada UE-28 Argentina
TONELADAS
TONELADAS
(Source:ARPwithdataofUSDA,2013)
6°
Tons
MeatExports-2013 ValueofExportsofthemainmeatcompanies
CampoGrande
RiodeJaneiroSantos
PuntaPora
Paranagua
MontevideoBuenosAires
Rosario
N.Palmira
ASU
ConcepciónPJ
LOGISTICHUB: TRANSPORTATIONOFGRAINS,MEAT,MINING
TRANSPORTOFGRAINS
TODAY:ThroughParanaguaorSantos. Time:aprox.45days. Distance:1500kmaprox. Cost:ExpensivefreightduetoInterstatetollsandlimitedtimescheduledforfreight.
PHASE1:BitrainstransportpathwaythroughPedroJuanCaballerotoConcepcion.HidroviatoNuevaPalmira.. Time:between15y20days. Distance:800km.Aprox(Concepción). Cost:aprox.costreductionofUSD500millionperyear.
PHASE2:ExittothePacific.
8.000.000tn/year:iestimateddemandforenergy+woodenproducts
60.000hadeclared:Stockforreforestation
22.000.000tn.
2,75years,sincethenativewoodfinishes
50.000ha/year:Reforestationamountrequiredtomeetcurrent
demand
Alta
Media
Baja
SuitablesurfaceforCommercialReforestation
ORDEN DPTO. SUP.TOTALSUPERFICIE(Has.)
ALTA MEDIA BAJA
TOTALS 9.433.095,80 7,328,713,71 3.243.915,61 20.005.725,12
Mainareasofhousingdevelopment-AsunciónandVicinityAreas
Fuente:SENAVITAT
100.000newhousesperyear
300.000houses(maintenance)
800.000houses(minorrepairsandmaintenance)
ESTIMATEDDEMAND
30%annualgrowthinthesector2015/16:20newprojects-morethan
USD450millionofnewinvestments.
TotalInvestmentUSD426million
MAININVESTMENTS
FOODINDUSTRY
TEXTILEANDCLOTHINGINDUSTRY
METALLURGICALANDLIGHTMETAL
MECHANICSINDUSTRY
AUTOPARTSLEATHERANDFOOTWEARINDUSTRY
REFO
RESTAT
ION
LOGISTIC
LIVESTOCKPRODUCTION,SLAUGHTERFOREXPORT
AGRICU
LTURA
LTR
ANSFORM
ATION
PUBLICINFRASTRUCTU
RE(≥7000USDMILLION)
RIVERPORTSANDLANDPORTS
AIRPORTS WATERWAY
RAILWAY
PASSEN
GER
TR
ANSPORTAT
ION
REALSTATELIVESTOCKANDAGRICULTURALPRODUCTION
BUSINESSSERVICES
FINANCIALSECTOR
AnnualExportsMilion
i
0
56
113
169
225
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
202.073.168
159.441.560140.914.577142.011.964
102.089.020
62.587.35279.496.97674.763.559
54.688.663
27.546.3098.407.6417.930.8382.001.0621.184.351
LaborForce-Persector
ConfeccionesyTextlesAutopartes
CalzadosysuspartesProductosfarmacéutcos
ServiciosintangiblesPlástcosysusmanufacturasCuerosysusmanufacturasMaderaysusmanufacturasAlimentosparamascotasProductosalimentcios
CauchoysusmanufacturasManufacturasdiversas
Pigmento,pinturaycolorantes
0 750 1.500 2.250 3.000
13
16
19
51
140
255
509
662
804
804
1058
1784
2344
AccumulatedExportperitem(En%)
Autopartes
ConfeccionesyTextles
Cuerosysusmanufacturas
Plástcosysusmanufacturas
Calzadosysuspartes
Productosfarmacéutcos
Serviciosintangibles
Maderaysusmanufacturas
Alimentosparamascotas
Pigmento,pinturaycolorantes
Productosalimentcios
Manufacturasdiversas
Cauchoysusmanufacturas
0,00 7,50 15,00 22,50 30,00
0,10970,13240,8175
0,89251,09931,2214
4,7218
7,034611,430311,575
19,9845
20,25220,7289
52%annualgrowthinthesector
24newapprovedprojectsapproved(2014).
20%totalexportstoBrazil(BraziliancompaniesinPY).
10newprojectsinthepipeline.
PARAGUAY LANDOF
OPPORTUNITIES
Av.Mcal.López3333c/Dr.Weiss Tel:(+59521)6163028
e-Mail:[email protected]
THANKYOU