Market overview

To the envy of its neighbours, Paraguay’s economy grew an average of 5% a year over the past decade. However, things were less rosy in 2019, and growth...

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To the envy of its neighbours, Paraguay’s economy grew an average of 5% a year over the past decade. However, things were less rosy in 2019, and growth was nearly zero as the country faced several challenges: first a drought and then floods had a negative impact on its agriculture, one of Paraguay’s main drivers of GDP. Electricity generation, another crucial source of revenue, also suffered from low water levels, while sluggish economic performance from neighbours Argentina and Brazil also affected Paraguay’s economy. However, the IMF expects growth to resume in Paraguay, hitting 4% in 2020. 

Be that as it may, there is a good number of lawyers in Asunción who understand the needs of international companies, and during the past decade law firms have had ample opportunity to build their experience in sophisticated legal work. In 2019, the trend continued. Firms had the opportunity to work on the US$658 million finance deal for the extension of two motorways under a project called Ruta del Este, which is Paraguay’s first PPP. In another landmark deal, GNB Sudameris’ Paraguayan branch became the largest bank in the country with the acquisition of BBVA’s local subsidiary for US$270 million.

But given that this is still one of the region’s smaller economies, demand for deep specialisations is still low, and the few firms capable of delivering expert services compete fiercely for relatively few deals. On more daily matters, firms have sound offerings in the core areas of corporate, banking and litigation. There are lawyers with extensive experience in tax, intellectual property, labour and, unexpectedly for a land-locked country, maritime law (the Paraguay River is an important trading route). A number of firms have a good amount of project finance and infrastructure experience that has increased with the new PPP legislation, while the growing demand for white-collar crime and compliance services is on a growing number of firms’ radars.

Paraguay’s business-friendly President Mario Abdo Benítez overcame a crisis in 2019 following ill-fated negotiations with Brazil over an energy contract involving the hydroelectric power station Itaipu, which is shared by both countries, and optimism in the legal industry about his administration remains. Many lawyers are hopeful that Paraguay will see increased Brazilian investment and that tax rates for foreign companies will remain low. The US, Brazil and Spain continue to be Paraguay’s main sources of foreign investment, primarily in the agriculture and livestock industries.

Investors are also interested in the country's infrastructure programme and the discovery of oil in the Chaco region. The government has introduced a number of legislative changes to bring in more foreign companies. These include laws for public–private partnerships and laws to stabilise the country’s tax regime with investment guarantees.

Paraguayan law firms do much to promote the opportunities brought by such reforms. For example, they have extolled the benefits of the country’s maquila law and advantageous customs rules to manufacturers in Brazil and Chile. They strive to foster foreign direct investment by seeking to change national perceptions, suggesting model legislation for important sectors and helping to clean up the country’s image. They also recognise the need for an internationally-recognised approach to providing legal services, and multiple members of this chapter are undergoing modernisation drives.

Law firms will also do what they can to make doing business as easy as possible for clients. That includes providing companies with all that they need to set up operations in the country, from office space, to board directors, to accounting services.

In 2019, Paraguay’s stock exchange commission embraced digital bookkeeping, which will facilitate the issuance of securities by local companies, also boosting the capital markets for law firms. This adds to the country’s overall goal of achieving investment status from rating credit agencies. Although signals have been positive, the legal community admits there is a long way to go in terms of international standardisation and anti-corruption controls before it happens. 

The law firms listed here are small in size when compared to others in the rest of Latin America. They are also predominantly local, with only one foreign firm, Uruguay’s Ferrere, which has had an office in Paraguay since 2003. The law firms listed in this chapter are all based in the capital Asunción. 

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