Paraguay has consolidated itself over the last decade as one of the most stable destinations for foreign direct investment (FDI) in South America. In a regional context marked by macroeconomic volatility and a slowdown in global capital flows, the country has maintained a gradual and sustained growth trajectory, supported by relative macroeconomic stability, competitive costs, and increasing integration into regional value chains.
Foreign direct investment in Paraguay shows increasing diversification of origin, combining regional and extra-regional capital. In total, more than 50 countries and jurisdictions maintain investment positions in the country, which demonstrates increasing geographical diversification of foreign capital. The Asunción Times dives into the data.
Recent evolution of foreign direct investment
According to data from the Central Bank of Paraguay (BCP), foreign direct investment recorded a net inflow of approximately US$931 million in 2024, consolidating the post-pandemic recovery and reaffirming the expansion trend observed in recent years.
Between 2019 and 2021, FDI dynamics were characterised by fluctuations associated with the global context: moderate levels in 2019 followed by a gradual recovery during 2020 and 2021, in line with regional economic reactivation. From 2022 onwards, capital inflows showed a more consistent growth trajectory, reaching one of the highest levels in the recent series in 2024.
In parallel, the accumulated stock of foreign investment currently exceeds US$10 billion. This reflects not only new capital inflows, but also the permanence of established companies and the reinvestment of profits, which is a key component in consolidating the presence of foreign capital in the Paraguayan economy.
Structure of investment: countries of origin
Foreign direct investment in Paraguay shows increasing diversification of origin, combining regional and extra-regional capital.
Brazil remains the main investor, with a strong presence in agribusiness, livestock, meat processing, energy, commerce, and industrial maquila. The United States mainly participates in financial services, telecommunications and business activities, whilst the Netherlands and Ireland operate largely through corporate structures and international financial vehicles linked to logistics and services.
At the regional level, Chile and Argentina have expanded their presence in commerce, food products and agro-industry, reinforcing South American economic integration. Spain, Germany and Canada also maintain investments in sectors linked to industry, infrastructure and services.
A significant portion of FDI also originates from jurisdictions such as the Cayman Islands, which function as financial intermediary platforms channelling capital into different sectors of the Paraguayan economy, particularly agribusiness, services and infrastructure.
In total, more than 50 countries and jurisdictions maintain investment positions in Paraguay, which demonstrates increasing geographical diversification of foreign capital.
Destination sectors
The sectoral structure of foreign investment in Paraguay shows a gradual transformation towards more diversified activities, beyond the traditional weight of the primary sector.
At present, the main recipient sectors include commerce and distribution, financial services, manufacturing industry, telecommunications, and business services. Although agriculture and livestock continue to be relevant, their relative share of total FDI stock has declined compared with previous years.
Commerce and distribution have strengthened due to the growth of domestic consumption and Paraguay’s strategic position within Mercosur. Financial services have gained dynamism in a context of macroeconomic stability and banking system expansion. Manufacturing has also grown, driven by the maquila regime, which has encouraged the establishment of export-oriented industrial firms.
In parallel, telecommunications and business services have experienced sustained expansion linked to digitalisation, service modernisation, and increasing international corporate operations.
Paraguay in the regional context
Despite sustained growth, Paraguay still represents a relatively small share of total foreign investment flows in Latin America and the Caribbean, a region which attracts between US$ 150 billion and US$180 billion annually in FDI, according to estimates by the Economic Commission for Latin America and the Caribbean (ECLAC) and the United Nations Conference on Trade and Development (UNCTAD).
However, the country stands out due to its relative macroeconomic stability, lower volatility compared with larger regional economies, and a competitive business environment in terms of costs. These factors have strengthened its position as an attractive destination within specific niches such as agribusiness, services, logistics and light manufacturing.
Interpretation of the data
The recent behaviour of foreign direct investment in Paraguay reveals three main structural trends.
Firstly, there is sustained growth within a small-scale market. Although investment volumes remain modest in regional terms, the trajectory is consistently positive.
Secondly, profit reinvestment plays a central role in FDI dynamics. This indicates not only new capital inflows, but also operational continuity and long-term confidence from established firms.
Thirdly, there is increasing diversification both sectorally and geographically. Investment is no longer concentrated in a limited number of countries or sectors, but is instead more broadly distributed, contributing to greater overall stability.
Towards a more diversified investment structure
The evolution of foreign direct investment in Paraguay reflects a process of gradual consolidation rather than rapid expansion. The country does not compete in volume with the largest economies in the region; however, it has established itself as a relatively stable, predictable and growing destination within a region characterised by high volatility.
Recent flows show a consistent pattern: moderate growth in capital inflows, accompanied by sustained expansion of the investment stock. This indicates not only the attraction of new projects, but also the permanence of existing firms. The latter is particularly significant, as it suggests structural confidence in the Paraguayan economic environment.
A greater role for services, industry and commerce
Furthermore, increasing sectoral and geographical diversification represents one of the most important structural changes of the past decade. The shift from a strongly primary-sector-based structure towards a more balanced composition, with a greater role for services, industry and commerce, reflects an economy undergoing gradual modernisation and deeper integration into global value chains.
Overall, Paraguay can be characterised as a small, but functionally stable economy within the Latin American investment landscape: constrained by structural scale limitations, yet supported by clear advantages in macroeconomic stability, regulatory predictability and competitive costs. If this trajectory continues, the country has scope to further expand its foreign investment base, particularly in services, light manufacturing and logistics-related activities.
