International rating agency Standard & Poor’s (S&P) Global Ratings has upgraded Paraguay’s sovereign credit rating to BBB-/A-3, officially granting the country Investment Grade status with a stable outlook. This milestone reinforces the momentum started by Moody’s in 2024, fulfilling the double investment grade threshold required by major institutional funds for large-scale capital allocation. This endorsement marks a turning point: Paraguay is no longer an emerging promise but a mature, reliable, and predictable jurisdiction for Foreign Direct Investment (FDI).
This achievement is underpinned by a series of legal reforms that modernize the country’s regulatory and operational framework. Notable updates include the new Securities and Products Market Law (Law No. 7572/2025), which provides a unified and modernized framework under the supervision of the Central Bank of Paraguay, and the enactment of the Unified National Registry (RUN) to enhance legal certainty and efficiency regarding property rights. Furthermore, Paraguay has expanded its infrastructure pipeline through a modernized PPP regime that increases fiscal capacity for major works, and a robust legal architecture for carbon credits to facilitate access to sustainable finance.
From a fiscal standpoint, the new legislative package provides strategic tax advantages designed to optimize investors’ capital structures. These frameworks offer critical benefits, such as customs duty and VAT exemptions for capital goods under the new incentive regime (Law No. 7548/2025), a modernized Maquila system with a 1% single tax rate, and exemptions from Non-Resident Income Tax (INR) on external financing interests for high-impact investment projects.
At BKM | Berkemeyer, we support this historic milestone for Paraguay. We remain committed to providing comprehensive and strategic legal advice, transforming this favorable macroeconomic landscape into efficient, secure, and long-term sustainable investment structures. Investment Grade status is more than international recognition; it is a tangible opportunity to develop high-impact projects within a framework of maximum predictability.
