How to open a company in Paraguay

Simulation criteria

The simulation compares the same hypothetical company at two extremes: in Brazil, in the scenario that leaves the least for the partners; in Paraguay, with every benefit the law allows. The criteria below are open to critique, and anyone who wants to discuss a number can talk to the OMNI team.

Common assumptions

Revenue of R$ 500 thousand per month, or R$ 6 million per year. Twenty employees with an average salary of R$ 3 thousand and two partners with a management fee (pró-labore) of R$ 10 thousand each. Raw materials imported from a country with no trade agreement, with a CIF value of R$ 80 thousand per month (16% of revenue), and an energy bill of R$ 50 thousand per month in Brazil (10% of revenue), typical of an activity that uses a lot of both. In Brazil, the company has an operating profit of 15% of revenue before labor risk provisions, the market standard for manufacturing; the other operating costs (rent, maintenance, domestic inputs, freight, administration and sales) were calculated to close that margin, total R$ 51,971 per month and are repeated unchanged in Paraguay. Revenue is the same in both countries; taxes the buyer may pay when importing are left out of the company's calculation.

Brazil

Tax regime. The Simples Nacional does not apply, because revenue exceeds R$ 4.8 million per year. We calculated the presumed-profit regime (lucro presumido), already including the 10% increase in the presumption on revenue above R$ 5 million per year (Supplementary Law 224/2025), and the actual-profit regime (lucro real); actual profit left less for the partners and was the one adopted. Under actual profit: IRPJ of 15% plus a 10% surcharge on profit above R$ 20 thousand per month, CSLL of 9%, PIS and COFINS of 9.25% with credits on imports, energy and half of the other costs. ICMS of 18% on sales, with a credit for the ICMS on imports and energy. IPI was treated as neutral (the debit on sales offsets the credit on purchases), as were the 2026 test-phase CBS and IBS, since they are creditable.

Imports. Import duty of 35%, the ceiling Brazil may apply to manufactured goods under its WTO commitments, used here as the worst case; for most raw materials the effective rate is lower. PIS and COFINS-import of 11.75%, AFRMM of 8% on ocean freight (estimated at 10% of the CIF value) and customs expenses of 2%.

Payroll. Employer INSS of 20%, RAT of 3% multiplied by the maximum FAP of 2.0 (6%), third-party contributions of 5.8% (salário-educação, Senai, Sesi, Sebrae and Incra) and FGTS of 8%, all on salary, 13th-month salary and vacation with the constitutional one-third bonus. Collective bargaining benefits (meal voucher and net transportation voucher) of R$ 800 per employee per month.

Labor risk. Full provision for the 40% penalty on FGTS deposits; paid notice period of one salary, with FGTS, for a 40% annual turnover; and a reserve for labor lawsuits of 3% of the annual payroll, estimated from the amount paid by the Labor Courts to claimants in 2025 (R$ 50.6 billion), in proportion to the country's formal wage bill, plus court costs and attorney fees.

Partners. Employer contribution of 20% on the pró-labore; partner INSS of 11% up to the cap and income tax under the 2026 table, at the 27.5% rate (above R$ 7,350 per month there is no reduction). Dividends stay below R$ 50 thousand per month per partner and each partner's annual income stays below R$ 600 thousand, so there is no 10% withholding and no minimum tax (Law 15,270/2025).

Paraguay

Maquila. Company approved under the maquila regime, exporting its output: single 1% tax on sales, exemption from IRE and from IDU on maquila profits (Ley 7.547/2025, arts. 37 and 38) and entry of raw materials under temporary admission, with no import duty or IVA. We added 5% of the CIF value for additional freight to Paraguay, which is landlocked, and 2% in clearance expenses.

Energy. One third of the Brazilian bill. A regional survey published in July 2026 ranks Paraguay's industrial tariff as the lowest in Latin America, at about 40% of Brazil's; one third is the assumption adopted for energy-intensive activities.

Payroll. Same salaries in reais. Employer IPS of 16.5% on salary and vacation; aguinaldo of one salary per year; vacation of 12 business days per year; family allowance estimated at one child per employee.

Labor risk. Full provision for dismissal severance of 15 days' salary per year worked; preaviso (notice) of 45 days for the same 40% turnover; and a reserve for lawsuits of 1% of payroll.

Partners. Conservative assumption of IPS contributions also on the pró-labore (16.5% employer and 9% partner). The partners are directors residing in Paraguay: personal income tax applies to net income, after deducting personal and family expenses in the country, estimated at R$ 6 thousand per month per partner, in brackets of 8% to 10%.

What the simulation does not show

The Paraguay result assumes partners with tax residency in the country, that is, with a definitive departure from Brazil. Anyone who remains a tax resident of Brazil may have the Paraguayan company's profit taxed in Brazil, depending on the structure (Law 14,754/2023), and the design changes. The simulation also does not include the investment in relocating, the learning curve of the new operation or the particularities of each sector, which are covered in the feasibility study.