Paraguay
AI Agent Legal Status: undefined · Autonomy: low
Legal Framework
Paraguay is a significant crypto mining hub due to cheap hydroelectric power from the Itaipú dam. A crypto regulation bill was vetoed by the president in 2022 but mining-specific regulations exist. The Central Bank has issued warnings on crypto but not prohibited it. No AI-specific legislation.
Key Laws & Regulations
- ◆Ley de Comercio Electrónico (draft/pending)
- ◆BCP (Central Bank) crypto warnings and circulars
- ◆Ley 6534 - regulating crypto mining and energy usage (proposed/partial)
Business Formation
Sociedad Anónima (SA) and SRL are common structures. Registration through the Abogacía del Tesoro and commercial registry. Process is moderately bureaucratic. No specific provisions for digital or AI entities.
Tax Implications
Corporate income tax at 10% — one of the lowest in the region. VAT at 10%. No specific crypto tax framework. Territorial tax system (only domestic-source income taxed). Cheap electricity makes crypto mining economically attractive.
Opportunities
Cheapest electricity in the region for compute-intensive operations. Favorable tax regime. Growing crypto mining infrastructure. Potential as a low-cost operational base for AI compute.
Highlights
Major crypto mining hub powered by cheap Itaipú hydroelectric energy. Very low corporate tax rate at 10%. Territorial tax system favorable for international operations. Growing crypto ecosystem.
Risks & Challenges
Regulatory uncertainty — crypto regulation bill vetoed. Limited legal infrastructure for digital innovation. Corruption concerns. Small domestic market. Brain drain of tech talent to neighboring countries.