A Look at Paraguay's Nascent but Growing Technology Scene
Landlocked Paraguay is home to roughly seven million people. It’s also home to the world’s second largest hydroelectric plant, and Paraguay is the sixth largest soybean producer in the world. The entrepreneur and technology scene is still beginning in the country, but people are taking steps to get new ideas off the ground. Here are ten facts about the business, technology, and entrepreneur landscape in Paraguay.
1. Fundación Paraguaya uses technology to eliminate poverty
Fundación Paraguaya (Paraguay Foundation) introduced a poverty assessment tool called Poverty Stoplight. Families use the tool to take a 30-minute survey, which assesses their poverty levels and provides a clear plan to overcome it. Now, more than 18 countries around the world use Poverty Stoplight to address and seek to eliminate poverty.
2. Starting and maintaining a business in Paraguay is not easy
According to the World Bank’s Doing Business report, Paraguay ranks very low. Overall, the country ranks 113 out of 190. And for starting a business, Paraguay ranks 151 out of 190. One reason for this is gaining access to credit is near-impossible, and the government actually made this process more difficult back in 2017 by limiting the distribution of historical data on borrowers.
3. The population is young and entrepreneurial
Jóvenes Empresarios del Paraguay, or Young Entrepreneurs of Paraguay, helps entrepreneurs between the ages of 18 and 40. The non-profit has partnerships with over 120 companies and seeks to contribute to the sustainable development of Paraguay. Though Paraguay ranks quite low internationally for entrepreneurial efforts, the young population seems to want to boost these figures.
4. There is substantial government investment in science and technology
Back in 2017, the government announced it would double the budget to advance the field of technological research, such as robotics and aerospace. Paraguay has experienced vast technical achievements thanks to the creation of hydroelectric power plants. The country hopes to launch its first satellite by 2021. The programs to fund and invest in science, technology, and innovation do exist, but they are outdated (signed in 2006).
5. Accelerators push innovation forward
There are different accelerators in Paraguay that help provide resources and networking opportunities in Paraguay. Startup Lab and Koga are two key organizations that seek to support local startups in the country move forward. And co-working spaces such as Loffice help bring the entrepreneurial community together.
6. The government encourages foreign investment
Paraguay’s government actively encourages private foreign investment. Furthermore, the country “guarantees equal treatment of foreign investors and permits full repatriation of capital and profits. Paraguay has historically maintained the lowest tax burden in the region, with a 10 percent corporate tax rate and a 10 percent Value-Added Tax (VAT) on most goods and services.”
7. Agtech could burgeon in Paraguay
Paraguay is an agriculture economy. In the last 14 years, Paraguay doubled its agricultural area and tripled its production. New technological solutions could put the country on the map as an agtech innovator. There are not very many startups in Paraguay, but there seems to be an opportunity in this sector.
8. Paraguay has sustained economic growth
Though roughly 30% of its population lives in poverty, Paraguay has achieved sustained economic growth. The economy grew 4.5% year after year from 2004 to 2017. Inflation remains relatively low, but Paraguay did feel an economic sting after Argentina’s crisis.
9. Taxes are low
Taxes in Paraguay are incredibly low. Up until 2012, there was no personal income tax, and now it’s only 10%. And, that tax is only for income generated inside Paraguay, so people that live in Paraguay and generate income from outside of the country, don’t actually have to personal income tax. The VAT is also just 10%, and property tax is between 0.5% and 1%.
10. Paraguay has high rates of corruption
While the country is seemingly a tax haven, corruption dominates in Paraguay. Transparency International ranked Paraguay 132/180. Likely an impediment to major economic development, corruption in Paraguay has only slightly improved in the past fifteen years. In 2004, Paraguay was listed as one of the six most corrupt countries in the world.
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