PARAGUAY | Foreign direct investment: Manufacturing change

Jul 1, 2014

Auto parts, logistics, manufacturing – these are all sectors gaining increasing interest from foreign direct investors in Paraguay

Paraguay's domestic market of 7 million inhabitants and a GDP of just $28 billion is not an obvious first choice for foreign direct investors. Yet, there is something in the air of Asunción that says that things may be changing.

The Hard Rock Café is set to open its first branch in the country by the end of year. Korean brands, like Samsung and Kia Motors, are ubiquitous - not to mention Toyota. An unprecedented 16 million mobile phones were imported last year, most of them from China.

Moreover, several car-part suppliers have recently set up shop in the country. Companies such as Yasaki are attracted by low taxation and a friendly business environment. Fujikura, another second-tier Japanese supplier for the automotive industry, says its costs at its local plant are 40% lower than in neighboring Brazil.

The strategy is to use Paraguay as a platform to import components at...

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