Why Outsourcing in Paraguay?


Paraguay is a country located in South America that offers competitive advantages:

  • Paraguay’s level of public debt is one of the lowest worldwide, 12.80 % of the GDP 2011. A low level of debt warrants stable and low fiscal pressure over the future years.
  • The labor cost in Paraguay is one of the lowest in South America (Heritage Foundation in 2012). Paraguay has an even lower cost of labor than Mumbai, India, world capital of outsourcing.
  • Paraguay has a competitive tax environment, fiscal pressure in 2013 will be about 10% on net corporate and private income, VAT is also 10%.
  • Paraguay has tax incentives to attract foreign investment. Compared with other countries in the region, Paraguay submit a tax regime with more convenient and advantageous rates for investments.
  • Paraguay’s population is about 7 million and, proportional to its population, one of the safest countries in South America (in the 2012 Global Peace index, Paraguay ranked 8th in Latin America).
  • Paraguay energy resources include one of the world largest hydroelectric dams, and it is a large producer of alcohol and bio-fuel. Low energy cost grants low cost of management.
  • Paraguay is a presidential democratic republic and enjoys relatively stable inflation levels if compared to other countries in the region and has maintained the same currency, the Guarani, in its current form for more than 68 years.
  • Paraguay enjoys an excellent geographical location in the center of South America, with free access to the MERCOSUR common market of Argentina, Brazil, Paraguay and Uruguay.

Statistical data of Paraguay

Level of Public Debt total % of GDP 2011

According to the Central Intelligence Agency World Factbook “This entry records the cumulative total of all government borrowings less repayments that are denominated in a country's home currency. Public debt should not be confused with external debt, which reflects the foreign currency liabilities of both the private and public sector and must be financed out of foreign exchange earnings.”

Source: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

GDP, Estimated 2013

After an expected contraction of -1.2% of GDP in 2012, it is forecasted a very strong rebound of the economy in 2013, with GDP growth of 13% mainly due to the rapid recovery of agriculture, the expansion of livestock and meat industry, added to the expected increase in public and private buildings.

The construction sector projects for the current period a sharply increase mainly associated with the implementation of public and private works.

The sub-sectors services recorded a positive behaviour.

In 2013 it will present an increase in gross capital formation, explained in part by the increase in foreign investment due to the "magnet effect" which (continues to exercise the best conditions found outside the country.

With this growth Paraguay would be positioned first in the region in terms of economic growth.

The dynamics of economic activity in recent years (2003-2013) has caused the expansion of the Paraguayan economy for a little more than five times.

Thus, from an economy of 6326.5 million dollars in Year 2002, it would increase to 32.936 million dollars in the year 2013.

Source: http://www.bcp.gov.py/attachments/article/1193/Presentacion_Estimaci%C3%B3n%202013,%2012%20de%20abril%20de%202013-segunda%20revisi%C3%B3n.pdf

Country Level of public debt, total (% of GDP) 2011
Paraguay 12.80
Hong Kong 39.80
Colombia 43.40
China 43.50
India 50.50
Switzerland 52.40
Brazil 54.20
USA 67.80
Spain 68.50
Germany 80.60
United Kingdom 85.30
France 86.10
Italy 120.10

All the following data is provided by the Heritage Foundation 2012.

Source: http://www.heritage.org/index/country/paraguay

Salaries 2012

In Paraguay, this includes:

a. Median Disposable Salary (After Tax): 448,31 USD/month.


Fiscal Freedom 2012

Financial Freedom 2012