Paraguay, home to extraordinary profit opportunities

Paraguay is a country the size of California, landlocked between Bolivia, Brazil and Argentina in South America. With no access to the sea, a small population (6.8 million) and economy (USD 25 billion GDP), it has historically been isolated from the world.

Nevertheless, the country is endowed with fertile lands and broad rivers; consequently, agricultural commodities and hydroelectricity account for a majority of its exports. In particular, agriculture is highly productive and accounts for a disproportionate 20% of gross domestic product. Multinational companies like Cargill, ADM and Louis Dreyfus control most of the exports of soybeans, corn and sunflower.

The economy of Paraguay is very dynamic; the GDP growth rate has averaged 5.5% in the last few years, aided by an agricultural boom as well as a surge in construction spurred by the introduction of mortgages in the mid 2000’s. Additionally, the level of taxation is quite low (under 15% of GDP) with additional fiscal incentives for new investment.

Corruption is an issue in Paraguay: bribes are typically requested by civil servants in order to speed up processes. Transparency International ranks it 150th out 170 countries for corruption perceptions. However, unlike in some other countries, an unwillingness to pay bribes will result only in a longer waiting time for obtaining a license, and not in indefinite blocking of a project.

The combination of small size, a relative isolation from world markets and a perception of high corruption have never made Paraguay a particularly popular investment destination. The foreign capital that flows into Paraguay typically does not face much competition, and is able to obtain high returns.

In fact, the United Nations ranked the rate of return to foreign investment in Paraguay among the 10 highest in the world in 2011. And this is not just a one-time event; the long term average rate of return to foreign investments is a very solid 17%:

The numbers tell a clear story: the fact that Paraguay is relatively outside of investor’s radars, together with its booming economy make for the perfect environment in which to make extraordinary profits. These returns are available to those who put a little time and effort in understanding the country. Will you be one of them?