Paraguay’s Maquiladora System releases the way for overseas businesses to launch themselves in the country or to delegate another corporation already present, for the finishing goods or purpose of processing and services intended for re-export, with the consequent value added.
Simultaneously, the regimen agrees to the business to import raw materials, machinery and essential inputs under a system of provisional admission in which payment of duty is balanced. It also offers for contracting limited workers and services, and the re-export of the product to the local as well as global market. Even though the purpose of the maquiladora system is to sell abroad the complete production, it is possible to sell a small part of it nearby without trailing the tax advantages reveal above.
The maquiladora operations are accepted from all taxes or extra charges having to do with the production development, including the Value Added Tax (VAT). A small tax of one percent is charge on the value added to the product with in Paraguay.
Common Uniqueness of Paraguay’s Maquiladora Industry
The Maquiladora industry is directed by Law 1064/97 which describes the Maquiladora Industry of Exports and by verdict number 9585/00 which includes the execute convention for the law.
In a “Maquiladora Contract,” an overseas-based business or “Matriz” agreements the services of a local Paraguayan corporation, the “Maquiladora Firm”, in order for the latter to perform industrial processing, in total or in part, or in the course of lending its services, for the purpose of repairing, transforming or assembling merchandise of overseas origin. The official modality is referred to as global subcontracting.
Lawful Position of a Maquiladora Firm
This may work under some of the official forms establish by Paraguayan law. This contains status as either a legal or a physical entity, national or foreign, local in the country.
The Maquiladora Program
In order to work as a maquiladora firm, agreement is essential for the Maquiladora curriculum, which would consist of a full clarification of the entire actions related with the Maquiladora Operation, as well as which would match the set of Maquiladora agreement between the Matriz and the Maquiladora Company.
The Maquiladora Curriculum and interrelated authorizes required by the maquiladora regime, are accepted by means of a decree authored by the Ministry of Finance and the Ministry of Industry and Commerce.
