Paraguay remains significantly underexplored, which has, in part, been a reflection of the difficulties international operators have had in establishing operations. Nevertheless, recent moves have sought to make the oil & gas environment more transparent.
June 16, 2021
Americas - South
Paraguay operates a sliding scale royalty, that starts at 10% and increases to 14% at 50m bpd; the gas royalty is flat 12%. Profits are taxed at 30%, some 20% above the prevailing general corporate tax rate. Depreciation rates are 25%
Paraguay scores at the mid-range or lower in most competitiveness indicators. Judicial insecurity hinders the investment climate, and trademark infringement and counterfeiting are major concerns. Since President Mario Abdo Benitez took office, his government passed several new laws to combat money laundering. Previously, the government has taken measures to improve the investment climate, including the passage of laws addressing competition, public sector payroll disclosures, and access to information. A number of U.S. companies, however, continue to have issues working with government offices to solve investment disputes, including the government’s unwillingness to pay debts incurred under the previous administration and even some current debts.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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