Paraguay, a country of almost 7 million people is less known in Finland but it can offer many business opportunities for Finnish enterprises
Main industrial sectors in Paraguay are agriculture and manufacturing. Paraguay is a land locked country, but it has remarkable capacity of river transportation through mainly private port activities. Forest industry development is at the starting point in Paraguay due to great climate conditions and space to plant eucalyptus. Paraguay needs support for developing sector regulation. World Bank is interested to support the process.
Developing connectivity and digitalization is much needed
In Paraguay, there is a great need to develop connectivity and digitalization. Private investments are important in developing these and other sectors in Paraguay. Digitalization of governmental services is supported by Inter American Development Bank IADB. This would also be an opportunity for private sector business development, says Ms. Kirsi Vanamo-Santacruz, Ambassador of Finland in Argentina, Paraguay, and Uruguay.
Favourable business environment and trade agreements attract foreign business to invest
Paraguay is a full and central member of Mercosur, which is also known as the Common Market of the South, a trade bloc agreement that exists between Argentina, Brazil, Paraguay, Uruguay, and Venezuela. Paraguay’s macro economy is stable and its GNB is expected to grow by 3.5 per cent in 2021. Paraguay wants to diversify its economy and exports. Paraguay is attracting foreign investors providing them advantages. European countries, the USA and the neighbouring countries have been the main investors in 2019.
Paraguay received the best position in comparison of a favourable business climate among the Latin American countries. Tax scheme is simple and competitive, and Paraguay is the leader in the generation of renewable energies. Paraguay offers many incentives in taxation, and a special regime for exports of a part or all the goods produced in the country. By PPP law, rules, and mechanisms to promote the public sector-related investments by the public-private partnership are established. The industrial parks approved by the Ministry of Industry and Commerce also offer fiscal advantages. Through Mercosur and commercial bilateral agreements companies based in Paraguay have access to markets with millions of inhabitants, states Mr. Federico Sosa, Director for Investment Promotion, Network of Investment and Export – Rediex.
Paracel and Wärtsilä – business success in Paraguay
Paracel, the partnership between a Paraguayan and a Swedish company, is constructing a sustainable pulp mill, a 3.2 Billion EUR green field investment project in Paraguay. The project expects to generate 40,000 new jobs. Although the consumption of paper is declining, cellulose is needed for example in producing toilet paper, packing materials and wipers.
The project is a transformative initiative aiming to generate value to all its stakeholders while advancing the economic and environmental well-being of the region and adhering to the highest sustainability standards globally driving positive social and environmental impact in the communities it serves, explains Per Olofsson, Executive Director, Paracel.
Paraguay has one of the biggest river going fleet in the world. Paraguay has no maritime coasts. Wärtsilä has been successful in offering engines for pushers with new technologies. The market is challenging, the environment is friendly and amicable. It takes quite a long time to get involved, and the companies should be patient. It is necessary to be present to create stable relations, says Eduardo Masciottra, Warag SRL, Wärtsilä Marine Power Agent for Argentina, Bolivia, Paraguay &Uruguay.
The Finnish Embassy in Paraguay, Business Finland in Latin America and Finnish-Latin American Business Council offer information and help for companies who would like to start business in Latin America or expand their activities there.
Presentations of the event Latin America Talks: Paraguay – time to take first steps can be found HERE.
This event was co-organized by Business Finland, Finnish-Latin American Business Council, and the Embassy of Finland in Buenos Aires. Event language was English. Ms. Heidi Virta, Director of Business Finland in Latin American Region, moderated the event.