Corporate Law at Paraguay
Corporate law in Paraguay governs the formation, operation, and regulation of businesses in the country. It is based on civil law traditions and is primarily regulated by:
🔹 Key Legal Frameworks
Civil Code of Paraguay
Commercial Code (Código de Comercio)
Law No. 1,031/83 – Regulates different types of commercial companies.
Law No. 6,380/19 – Modernized the tax system, impacting corporate structures.
Law No. 6,398/19 – AML (Anti-Money Laundering) provisions affecting corporate transparency.
🔹 Types of Business Entities
Sociedad Anónima (S.A.) – Similar to a corporation; ideal for larger businesses.
Sociedad de Responsabilidad Limitada (S.R.L.) – Limited Liability Company; preferred for small-to-medium enterprises.
Sucursal – Branch of a foreign company.
Empresa Unipersonal – Sole proprietorship.
🔹 Key Corporate Requirements
Minimum Capital: Varies by entity type.
Shareholders:
S.A. requires at least 2 shareholders.
S.R.L. allows up to 25 partners.
Directors/Managers: S.A. needs a board of directors; S.R.L. requires one or more managers.
Registered Office: Must be located in Paraguay.
Accounting & Audits: Annual accounting records required; S.A.s may be subject to audit.
🔹 Corporate Governance
General Assembly of Shareholders – The supreme decision-making body.
Board of Directors – Manages company affairs in an S.A.
Transparency & Compliance – Beneficial ownership reporting is mandatory for certain companies.
🔹 Foreign Investment
No restrictions on foreign ownership.
Paraguay offers investment incentives and operates under the Maquila Law, which provides tax benefits for export-oriented businesses.
🔹 Recent Developments
Increased enforcement of anti-money laundering (AML) laws.
Push for corporate transparency and digitization of company registration via the SUACE platform (Unified System for Business Opening).
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