Author: dev_

By Resolution MH N°150/2018, issued on November 27 of the current year, the Ministry of Finance decided to suspend the application of sanctions, fines and non-punitive measures derived from Law N° 5895/2017 “Establishing transparency rules in the regime of companies incorporated by shares” and Regulatory Decree N° 9043/2018, until February 17, 2019.

The aforementioned decree establishes the formalities and mechanisms for the execution of the exchange of bearer shares for registered shares, the transfer of shares and the application of fines generated as a consequence of non-compliance with the law. Among the consequences of non-compliance with the new regulations, there are also non-punitive measures such as the blocking of the company's RUC or the suspension of the economic rights of the shareholders.

The application of these measures had been previously suspended by other resolutions of the Ministry. However, the Treasury Attorney's Office and the Undersecretariat of State for Taxation are currently working on the technical adjustments that will allow the payment of fines through the Marangatú system, and require more time to carry out work and tests on such system.

In addition, the significant increase in the number of procedures initiated as from the enactment of the new law and its decree has increased the average number of virtual procedures to around five thousand, and the number of telephone requests has also increased, with more than one thousand calls per day to the Department of Registration and Control of Companies. Consequently, the Ministry of Finance has found it prudent to extend this suspension to allow these institutions to regularize the relevant computer procedures that are overdue.

If you would like to know more about the requirements for joint stock companies, please do not hesitate to contact Perla Alderte (palderete@vouga.com.py) or Marco Colmán (mcolman@vouga.com.py)  

The joint work of the National Cadastre Service (SNC) and the Association of Notaries of Paraguay (CEP) seeks to simplify the structure of cadastral data and facilitate the processing of report requests through the incorporation of technology. The two institutions agreed to expand the topics of the Agreement of Intent for Public-Private Participation (APPP) signed in January 2016 to achieve this.

It is expected to reduce the time required to process files and to remedy cases of discrepancy between the certificates issued by the SNC and those registered with the General Directorate of Public Registries. This will facilitate the exercise of the property owner's ownership rights. It is also expected to reduce in 45 days the analysis of some 75,000 files through coordinated work with other institutions.

The CNS Director also informed that the files cancelled for exceeding the 365-day term in the possession of the appellants may be reentered into the CNS completely free of fees.

The formalization of small and medium-sized enterprises (MSMEs) is one of the government's objectives and, therefore, several actions have been undertaken to promote it. Among these actions, the creation of an inter-institutional round table between the Ministry of Industry and Commerce (MIC), the Undersecretary of State for Taxation (SET) and the Ministry of Labor, Employment and Social Security (MTESS) a few weeks ago stands out. In addition, the MIC's “Paraguay Trabaja Formal” program was launched, which will allow companies to register late without paying the corresponding fine until December 31.

The Vice-Minister of Employment pointed out that 90% of the companies that are registering fall into the category of MSMEs. Notably, 85% of them were in a state of informality. This is largely due to the lack of knowledge and clarity about the requirements needed to form a formal company. For this reason, the working group will consider the amounts and requirements necessary for formalization, in order to make them clearer and more accessible to citizens.

These steps are intended to boost the formalization of MSMEs and promote the creation of decent jobs.

If you have any questions about business start-ups or SMEs, please do not hesitate to contact Rodrigo Fernandez (rfernandez@vouga.com.py) or Marco Colmán (mcolman@vouga.com.py) 

The National Directorate of Intellectual Property (DINAPI) informed that, since November 2018, Resolution DINAPI RG No. 20/2018 is in force, which expands and establishes new requirements for registration in the registry of importers of magnetic and optical media and raw materials.

The receiving office of the documentation will be the Importers Registration Unit -depending on the General Directorate of Enforcement-. The main task of this office is the authorization of prior import license applications for the products described in Decrees No. 603/2003 and No. 4212/2015.

The forms can be downloaded from the website (https://www.dinapi.gov.py/index.php/formularios) in both Word and PDF format.

If you need more information on this or any other Intellectual Property topic, please do not hesitate to contact Laura Lezcano (llezcano@vouga.com.py)

The Procurement Operating Unit (UOC) of the National Directorate of Public Procurement (DNCP) launched the first call for bids whose bidding terms and conditions were generated electronically, as a pilot project. This is the bidding process for the acquisition of computer equipment for the DNCP -published in the portal www.contrataciones.gov.py- and the gradual implementation of this modality in the purchasing processes of the other State entities is foreseen for 2019.

The electronic bidding documents are generated through a system that facilitates their preparation and control by the UOC -which selects the clauses and conditions- and allows the bidder to view the document in PDF format. Likewise, the bidding process has a new functionality that allows bidders to download the Bid Form with the bidding data preloaded. This avoids errors at the time of submission.

A new electronic consultation module is also available, which allows bidders to inquire about a specific bid through the system and receive responses through the same channel. Both the inquiries and their responses will be publicly accessible, and will eliminate delays in intermediate processes and unnecessary paperwork. The electronic consultation module is available for calls for bids issued by the DNCP, and will be extended to all bids at a later date.

To protect the consumer, the Ministry of Industry and Commerce (MIC) will inspect e-commerce providers to verify that they comply with all legal provisions such as the correct indication of the price and characteristics of the product.

The objective is to establish secure trade and protect Paraguayan consumers who use the internet to make their purchases. According to data from the industrial portfolio, the number of such consumers is around 15 percent and generated some US$255 million for international suppliers in 2017.

It is also intended to enforce compliance with the E-Commerce Law passed in 2013. Although the intention “is not to sanction”, the ministry warns that non-compliance with the regulation may result in the imposition of sanctions after the opening of an administrative summary.

The control will be carried out randomly by means of a computer system that will select the Internet pages to be controlled, and there will also be on-site inspections. The inspections will be carried out by the General Directorate of Digital Signature and Electronic Commerce of the Ministry, which will also receive complaints and claims from citizens for infringements in this type of exchanges.

If you would like to know more about the legal provisions with which e-commerce providers must comply, please do not hesitate to contact Walter Vera (wvera@vouga.com.py) or Marco Colmán (mcolman@vouga.com.py) 

The renowned directory The Legal 500, which has been analyzing the legal market and the capabilities of law firms around the world for almost thirty years, has once again highlighted our firm in its 2018 edition, which is currently online, ranking Vouga Abogados in all practice areas listed for Paraguay.

The publication has rated our firm in the Tier 1 category for Corporate and M&A, Dispute Resolution and Environment, and in Tier 2 for Banking & Finance, Intellectual Property, Labour and Employment and Tax.

In each of the areas, the following colleagues were highlighted:

Corporate and M&A

Rodolfo Vouga – Leading lawyer

Carlos Vouga – Next generation lawyer

Rodolfo Guillermo Vouga – Next generation lawyer

Dispute Resolution

Mirtha Dos Santos – Leading lawyer

Rodolfo Guillermo Vouga – Next generation lawyer

Environment

Marta Martínez – Leading lawyer

Banking and Finance

Rodolfo Vouga – Leading lawyer

Carlos Vouga – Next generation lawyer

Intellectual Property

Laura Lezcano – Next generation lawyer

Labour and Employment

Perla Alderete – Leading lawyer

Walter Vera – Next generation lawyer

Tax

Andrés Vera – Next generation lawyer

The Legal 500 assesses the strengths of law firms in more than 100 jurisdictions, basing its rankings on a range of criteria and highlighting the teams that provide the most innovative and cutting-edge advice in the respective practice areas. Its research is based on feedback from 300,000 clients worldwide, law firm submissions and interviews with leading private practice professionals, thanks to a team of researchers with extensive experience in the legal market.

From Vouga Abogados we are always grateful for the trust placed by our clients, which are the basis of the achievements of the firm and its professionals.

Learn more about our firm's profile in The Legal 500 here: https://www.legal500.com/firms/53201/offices/56981

We are pleased to announce the incorporation of GEORG BIRBAUMER, who will bring his expertise in financing and capital markets, which will add great value to our Corporate and Banking & Finance areas. This new incorporation is a valuable reinforcement to our human resources in order to always provide our clients with the best service.

Georg holds a law degree from the Universidad Nacional de Asunción and an LL.M. in International Legal Studies from the Georgetown University Law Center in Washington D.C. During his LL.M. studies Georg also worked as a Legal Intern in the Washington D.C. office of Dechert LLP. In addition, he served as a Teaching Assistant for the Foundations of American Law summer class, following the completion of the LL.

Prior to joining the team, Georg worked as an International Lawyer in the Buenos Aires office of Cleary Gottlieb Steen & Hamilton LLP. Georg has been involved in a large number of international transactions, focusing on different types of financing transactions, including transactions related to sovereigns, public entities and private companies from different Latin American countries, such as Argentina, Chile, Paraguay and Uruguay. Georg is fluent in Spanish, English and German.

We welcome Georg and wish him success in his new role.

If you would like to know more about our Corporate area, please do not hesitate to contact Georg at his e-mail address (gbirbaumer@vouga.com.py).

With the aim of helping companies to formalize their employees and bring their labor obligations up to date, the Ministry of Labor, Employment and Social Security (MTESS) and the Social Security Institute (IPS) have decided to grant a grace period, authorizing the exoneration of fines established in the legal provisions for a term of 60 calendar days. Thus, from November 1 to December 31, 2018, the payment of fines for late registration in the Employer Labor Registry and late submission of annual payrolls will be exonerated.

This provision, established in Decree 553/2018, arose as a result of numerous companies being in arrears with their obligations, which is punishable by a fine of 10 to 30 minimum daily wages - in accordance with Decree 8304/2017, as amended by Decree 9368/2018.

It is important to note that, although not expressly mentioned in the decree, this exoneration will not be applied retroactively. For this reason, fines that were generated before November 1 will not be exonerated from payment.

For more information on timely compliance with current labor obligations, please do not hesitate to contact Walter Vera (wvera@vouga.com.py) or Daniela Leguizamón (dleguizamon@vouga.com.py).

In order to facilitate the operation of Micro, Small and Medium Enterprises (MSMEs), the Government plans to simplify the formalities and the process of formalizing operations to position the sector in the local market. Currently, many companies operate in an irregular manner, not even having a Single Taxpayer Registry (RUC). Others are moderately formalized -i.e., they have a RUC- but are not registered with the Instituto de Previsión Social (IPS) and do not have a commercial license, which hinders the hiring of personnel and the formalization of products.

In order to position Paraguayan products in the domestic market, inter-institutional work is required, headed by the Ministry of Industry and Commerce (MIC). The line to be particularly strengthened is the food industry, since Paraguay currently processes juices, sweets and foods that are marketed both in Asunción and in other major cities in the country.

The first step will be to break down the barrier of access to information to provide microentrepreneurs with the necessary knowledge about how to formalize their operations. Vice Minister Isaac Godoy added that they will then insist on reducing bureaucracy and breaking down current tariff barriers. Godoy commented that he expects to see the first results within six months to a year, as some resolutions and decrees need to be modified to simplify the relevant regulations before any action can be taken.