Advances in Fintech Regulation in Paraguay

According to data published by The Global Findex Database 2021 survey, Paraguay had a bank account ownership rate of 54%.[1] Furthermore, according to the latest data published by the Central Bank of Paraguay ("BCP") in August 2023, the population's bank account ownership rose to approximately three-quarters of the country's population, at 76%.[2]

This substantial surge in account ownership in recent years can be attributed not only to the growth of traditional financial institutions in the country but also to the emergence of Fintech companies in the Paraguayan financial market.

Fintech companies have become key tools for financial inclusion. The Fintech industry has generated disruptive alternatives for financial inclusion all around the world, which governments have been regulating and adopting in their inclusion efforts.

We will provide a brief summary of the latest advances in the regulation of the current main Fintech tools in Paraguay, including aspects closely related to these tools, such as personal data and its treatment. The summary will be delivered in four sections.

In this first section, we will highlight relevant aspects of the regulation of one of the most effective financial inclusion tools offered by the Fintech industry: digital wallets or, as referred hereafter: e-wallets..

  1. e-wallets

Entities that provide e-wallet services in Paraguay are known as EMPE or EMPEs. EMPEs are companies authorized and supervised by the Central Bank of Paraguay to process, manage, and, in general, provide services related to mobile money and e-wallets. Through e-wallets, users can make payments to businesses and transfer electronic money, whether to users of the same e-wallet, different e-wallets, or even to individuals who do not have accounts with any of the e-wallets operating in the country.

With approximately 2.7 million active accounts and monthly transactions of approximately $160 million, e-wallets play a significant role in the country's digital transformation and serve as a tool for financial inclusion.[3]

1.1. Applicable Law

Regulation of e-wallets in Paraguay consists of a set of resolutions issued by BCP and the Secretariat for the Prevention of Money Asset Laundering ("SEPRELAD").

Among the BCP's resolutions are Resolution No. 6/14 and its amendment, No. 6/20, which establish the general conditions for the operation and registration of EMPEs in Paraguay. Additionally, Resolution No. 10/2019 contains provisions related to the information that EMPEs must provide annually to BCP as the regulatory authority.

In addition, SEPRELAD Resolution No. 77/20 outlines the operational framework of measures to combat money laundering and the financing of terrorism that EMPEs must implement, as well as the authorities responsible for supervising these procedures within their structure.

1.1.1. BCP Resolutions

BCP issued Resolution No. 6 in 2014 which -along with its amendment, Resolution No. 6, issued in 2020- currently serves as the national regulatory framework for EMPEs and e-wallets. Through this resolution, BCP declares that e-wallets should be considered as financial inclusion tools that aim to integrate the unbanked population into the national financial system. In this scenario, e-wallets seek to address market needs related to small-scale commercial financing.

In that sense, the documentation requirements for user registration with e-wallets are straightforward, and the registration process is entirely digital.

The Resolution mandates that EMPEs may provide e-money provisioning services and non-bank electronic transfers ("remittances") among their users and the general population through their e-wallets. It also establishes that electronic money will be accepted as a means of payment and will be convertible into cash.

It's worth noting that EMPEs are not authorized to engage in financial intermediation activities or to grant loans from their own funds to users. Also, the funds deposited by users in their accounts do not constitute bank deposits.

Instead, e-wallets function more as a platform for storing electronic money, allowing users to convert their cash into electronic money that can later be converted back into cash, usually for a commission fee charged by the EMPE.

In line with BCP's focus on small-scale activities, the limit on the amount of electronic money that users can store in their accounts is quite limited. Funds exceeding this limit are deposited in a financial institution.

A monthly limit for sending and receiving money transfers is also set for users. If this limit is exceeded, these transactions are made through accounts opened with financial institutions.

As mentioned above, e-wallet users can send money to individuals who do not have an e-wallet account. In that case, the funds can be withdrawn, or the individuals can register with the e-wallet through which the transfer was sent and use the funds from their new e-money account.

Regarding the security of e-money stored in e-wallets, the BCP's regulatory policy stipulates that all funds held by each account holder, agent and point of sale must be held in trust or deposited with the BCP. In fact, EMPEs may secure these funds using both methods, provided that the trust and BCP deposits cover all funds held by account holders, agents, and points of sale. In practice, most EMPEs in the country have chosen to establish trusts as their method of securing funds.

1.1.2. SEPRELAD Resolutions

EMPEs have their own Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Rules and Regulations, issued by SEPRELAD through Resolution No. 77/20. This resolution includes, among other measures, the requirement to conduct due diligence on e-wallet users.

In addition, the resolution mandates the existence of an AML and CTF Committee, which must include at least two members of the EMPE Board of Directors. This committee will be chaired by the EMPE's Compliance Officer, who must have a direct, full-time and exclusive employment relationship with the EMPE or its economic group and hold a top management position.

[1] This includes accounts owned at any regulated institution, such as banks, credit unions, microfinance institutions and e-wallets.

[2] Financial Inclusion Indicators and Data. August 2023. Central Bank of Paraguay.

[3] Statistical and Financial Bulletin of EMPEs. July 31, 2023. Central Bank of Paraguay.

Paraguay, at the forefront of carbon credit regulation

Law 7190/2023 "On Carbon Credits" (the "Law"), enacted on October 12, 2023, marks a significant milestone for Paraguay and positions it at the forefront of Carbon Credit regulation in the region.

The Law regulates, among others, the ownership of Carbon Credits generation projects and the creation of the Carbon Credit Registry, to be administered and supervised by the Ministry of Environment and Sustainable Development (Mades) as the enforcement authority for the Law.

The Law establishes that the ownership of Carbon Credits belongs to the owners of the property, or the assets assigned to the project, including the surface rights’ owners pursuant to Law 4890/2023 on Surface Rights, or to those to whom the rights have been assigned.  

The Carbon Credit Registry, pending to be regulated by Mades, will register the projects generating carbon credits, the holders of such projects, any modification, transfer, or assignment of carbon credits by the holders, as well as credits generated outside the country and acquired by residents in Paraguay. Among the main objectives of this registry, it is worth mentioning the prevention of double counting of carbon credits in registered projects and the publicity of the projects and the carbon credits generated by them. The Law does not restrict the registration of carbon credits before other national or foreign registries or carbon standards.

Carbon credits may be transferred in full or in fractions, except for a percentage of 3% to 10% (to be determined by Mades) that may not be transferred to ensure compliance with Paraguay's Nationally Determined Contributions (NDC) . It is important to note that the transfer of carbon credits is exempt from Value Added Tax (VAT).

The Law also establishes the possibility of requesting Mades to issue a Certificate of Non-Objection to the transfer of carbon credits abroad, to avoid double accounting of credits, prior to their registration in the Carbon Credit Registry. In addition, the Law establishes as a requirement that the Project Developers (professionals or companies in charge of elaborating the project to be submitted to the Carbon Standard, as defined in the Law) must have a participation of at least 50% of Paraguayan labor.

Potential infringement of the Law and applicable regulations, such as failure to register in the registry, providing false information, failure to withhold NDCs, and others, will be sanctioned with temporary or permanent disqualification from registration in the registry and fines.

In our view, the inclusion of a regulation on this matter benefits both the public and private sectors. The law provides clarity and reliability to the local carbon market, which should encourage investments in carbon mitigation projects in Paraguay.

Vouga Abogados is participating in several of the largest carbon credit projects in the country. For further information, please contact our team: Rodrigo Fernandez ( , Rodolfo G. Vouga ( and Cecilia Vera (

Developments In Carbon Sector and Sustainability

Our partner Rodolfo Vouga discusses the dynamic landscape and opportunities in the carbon sector, touching on policies and initiatives that are shaping the future of Paraguay during the Paraguay Investor Day organized by @Citibank in New York.

Watch the video!

TAX NEWS - August 2023

Executive summary

Law N° 7143August 04, 2023The National Directorate of Tax Revenues ("DNIT" per its Spanish acronym) is created.
Decree N° 83August 18, 2023The Presidency of the Republic appoints Mr. Oscar Orué, former Vice-Minister of the Undersecretariat of State for Taxation ("SET"), as National Director of DNIT.
Decree N° 82August 18, 2023The Presidency of the Republic establishes the validity of Law No. 7143/2023 creating the DNIT.
Resolution N° 99August 29, 2023The DNIT establishes administrative measures regarding the subscription of certain administrative acts issued by the DNIT, the General Management of Internal Taxes and its dependencies.
Binding consultationAugust 2023The SET issued its opinion on the inapplicability of Value Added Tax ("VAT") to the provision of call center services through the Internet for customers located abroad.
Administrative Court Ruling N° 174/2023August 2023The First Chamber of the Administrative Court ruled to admit a lawsuit against the Municipality of José Félix Estigarribia, which sought the taxation of the municipal patent tax for agricultural and livestock activities.

More information:

► Law No. 7143/2023 – Though which the DNIT is created

On August 4, 2023, the Executive Branch enacted and published Law No. 7,143/2023 (the "DNIT Law"). This law created the DNIT, which is a new public law entity. For that purpose, the former SET was separated from the then Ministry of Finance (now the Ministry of Economy and Finance) and merged with the National Customs Directorate ("DNA").

The purpose of the DNIT is to collect both customs and internal taxes, and it has all the functions and powers previously held by the SET and the DNA over the respective taxes corresponding to each area.

The DNIT is an autonomous public law entity communicating with the Executive Branch through the Ministry of Economy and Finance but is no longer part of the latter. You can access a more extensive analysis we prepared on the Law of the DNIT through the following link.

► Decree No. 83/2023 – The Presidency of the Republic appoints Mr. Oscar Orué, former Vice-Minister of SET, as National Director of DNIT.  

Through Decree No. 83/2023, the Presidency of the Republic appointed Mr. Oscar Orué, who previously served as Vice Minister of SET, as National Director of DNIT.

With this appointment, the National Director has continuity in the functions he previously performed as the highest authority of the SET and will be in charge of implementing the DNIT Law, by which the SET and the DNA are merged.

As the first official act after his appointment, the National Director appointed Braulio Ferreira as Executive Manager, Ever Otazú as General Manager of Internal Taxes and Juan Olmedo as Customs Manager.

► Decree N° 82/2023 – The Presidency of the Republic establishes the validity of the DNIT Law and other provisions on the functions of this entity

Through Decree No. 82/2023, the Presidency of the Republic established that the DNIT Law and the transitory rules for its effective implementation are in force. While the merger process between the former SET and the former DNA takes place, the institutional continuity of the entities that are in the process of integration is necessary, as well as legal certainty for taxpayers and users of foreign trade.

In this sense, as a reason for the decree mentioned above, the Presidency of the Republic explains in the reasons for the Decree that it is necessary to appoint a person in charge to carry out the merger process until the organizational structure and the manual of functions of the DNIT and its divisions are approved. Consequently, the DNIT Law became effective from the day following its publication in the Official Gazette on August 22, 2023. However, several provisions of the DNIT Law will enter into force at a later date, as follows:

On the other hand, until the implementation of the units and operative departments that will be established by regulation, the temporary structure of the DNIT will be as follows:

Finally, through the referred Decree No. 82/2023, the Presidency of the Republic designated the Executive Management as the unit responsible for organizational restructuring and regulation of the Law of the DNIT. The National Director must report to the Executive Branch through the Ministry of Finance on the progress made in merging or amalgamating the organizational structures of SET and DNA.

► Resolution No. 99 issued by DNIT – Whereby administrative measures are established with respect to the subscription of certain administrative acts issued by the DNIT

Through Resolution No. 99 of the DNIT (the "RG 99") it was established that the highest authority of the DNIT, which is the National Directorate, will take over the competences of the General Internal Revenue Directorate with respect to certain administrative acts, among which we mention the following: (1) Resolution of requests for tax credit refund and repetition of undue or excess payment; (2) Resolution of appeals for reconsideration filed against (2.1) the particular resolutions of tax assessment and application of penalties, (2.2) the response to binding consultations and (2.3) resolutions on tax credit refund and repetition of undue or excess payment; (3) Issuance of executive title or debt certificate, among others.

Avocation is an administrative law technique used in the public administrative organization to transfer the powers to resolve a specific matter from a hierarchically inferior body to a superior one. This technique is only effective between organs of the same administration.

On the other hand, the highest authority of the DNIT delegates to the head of the General Directorate of Internal Taxes the powers to execute the following administrative acts: (a) Audit orders, together with the Intervening Director; (b) Resolution of administrative proceedings for tax assessment and application of penalties; (c) Execution of the guarantee in the accelerated tax credit refund system of the exporter; and, (d) Answers to binding and non-binding consultations, among others.

In addition, the highest authority of the DNIT establishes powers to perform certain administrative acts to the following entities: (a) Directorate of Taxpayer Assistance and Tax Credits; (b) General Directorate of Tax Auditing; (c) General Directorate of Collection and Regional Offices; (d) General Directorate of Large Taxpayers; and (e) Directorate of Tax Planning and Technique.

► Response to Binding Consultation on the non-applicability of VAT to the provision of call center services via internet to foreign customers

Through a response to a binding consultation issued during August 2023, the SET established its position on the non-applicability of VAT on call centre services provided from Paraguay to customers outside the country.

For VAT not to be applied to this type of service, the operation must be within the digital services category and used outside the Paraguayan territory. According to the provisions of Law No. 6,380/2019 (the "Tax Law"), digital services are those services that are made available to the user through the internet or any adaptation of protocols and that are essentially characterized by being (a) automatic and (b) not feasible in the absence of information technology. Decree No. 3,107/2019, which regulates the VAT of the Tax Law, establishes that call centre services are digital services if they are provided through the internet or other networks.

Thus, for the service in question to be considered as provided to customers abroad and used outside the country, it is necessary that none of the following elements are located in Paraguay: (a) IP address of the device used by the customer; (b) country code of the SIM card; (c) billing address of the customer; (d) bank account used for remitting the payment; (e) billing address of the customer available to the bank; (f) financial entity issuing the SIM card; (g) bank account of the customer; (h) bank account of the customer used for remitting the payment; (i) bank account of the customer used for the payment; (j) bank account of the customer used for remitting the payment; (k) bank account of the customer used for remitting the payment; and (l) bank account of the customer used for remitting the payment.

Consequently, the SET responded by endorsing that call centre services that meet the indicated conditions may issue an invoice without generating a VAT tax debit.

► Administrative Court Ruling N° 174/2023 by which the First Chamber of the Administrative Court ruled that the municipal patent tax for an agricultural company was inapplicable

The First Chamber of the Administrative Court resolved a contentious administrative action brought by a company engaged in agricultural activities against the claim of the Municipality of Mariscal Estigarribia to collect the municipal trade tax on the assets that this company has in such Municipality. As the primary basis for filing this action, the taxpayer argued that the company does not carry out industrial, commercial or professional activities and, therefore, is not obliged to pay the municipal trade tax, as provided for in Law No. 620/1976.

The representative of the defendant Municipality answered the contentious administrative lawsuit mainly arguing that the plaintiff company is constituted as a mercantile entity in the General Directorate of Public Registries and that it has a merchant's registration and, therefore it is obliged to comply with the obligations related to such condition. Consequently, such formalities are, in themselves, acts of commerce, and for this reason, all entities of a mercantile nature are obliged to pay the municipal patent tax.

The First Chamber of the Administrative Court resolved the matter in a majority (vote of two of the three members), upholding the action filed by the plaintiff company, since it understood that the agricultural production activity is not included in the factual assumption of the tax and, therefore, is not taxed by it. Consequently, it ordered the revocation of the contested administrative acts, by which the plaintiff was ordered to pay the municipal patent tax.

Although this ruling is favorable to the plaintiff company, it cannot be ignored that the Municipality may appeal this resolution and submit it to review the Penal Chamber of the Supreme Court of Justice. It is essential to note that the position of the Supreme Court of Justice on this point has varied over time, and there is case law supporting the arguments of the plaintiff company in the present case, as well as case law against such claims, the latter being the trend in recent years.

The Paraguayan Senate approved the "Carbon Credits" Bill

Breaking news - The Paraguayan Senate approved the "Carbon Credits" Bill during the session held yesterday.

The Bill will now pass to the House of Representatives. The Carbon Credit Bill seeks to set a legal framework that would provide certainty on the ownership of carbon credits generated by projects located in the country and to avoid double counting of carbon credits. The Ministry of Environment and Sustainable Development (MADES) would act as enforcement authority, and will be in charge, among other, of keeping a registry of carbon credits generated by projects in Paraguay and those acquired from abroad. The registry will not imply double counting of credits.

With this initiative, Paraguay seeks to position itself as a leading jurisdiction in the regulation of carbon credits, in order to promote the access of high-quality projects to global carbon markets. According to estimates, Natural Based Removals projects located in Paraguay could represent more than 50% of the carbon credits to be issued over the next 5 years in this sector worldwide. Additionally, Paraguay has great potential to develop carbon projects in the energy, transportation, and other sectors.

The Bill is available in the following link

Vouga Abogados is participating in several of the largest carbon credit projects in the country. For further information, please contact our team: Rodrigo Fernandez (, Rodolfo G Vouga ( and Cecilia Vera (

We will keep you updated on this important news in development.

New requirements for registration as Insurance Brokers and Claims Adjusters

The Superintendence of Insurance through Resolution SS.SG. No 168/23 dated August 9, 2023, has expanded Article 4, item e) of Annex No. 1 of Resolution No. 14/96, which establishes the requirements for legal entities to operate as insurance brokers or claim adjusters in the insurance industry.

Pursuant to said extension, legal entities wishing to operate as insurance brokers or loss adjusters shall, in addition to attaching to their application for registration or renewal, prove the suitability required by the Insurance Law of their administrators and legal representatives by means of any of the following requirements:

  1. Proof of academic training (undergraduate degree) and work experience in the insurance or financial field for at least 5 years;
  2. Proof of compliance with Article 2 - literal g) foreseen for registrations, of Annex 1 of Resolution No. 14/96, Annex 1; or
  3. Proof of work experience in the insurance or financial field, in positions of Executive and/or Senior Management, for at least 10 years.

The Superintendence of Securities amended provisions of the General Regulation of the Securities Market regarding tariffs

On August 21, 2023, the Superintendency of Securities (the "Superintendency") issued Resolution CNV No. 41/23, in order to set forth with greater clarity the processes exempted from the collection of fees.

Among the most relevant provisions, the Superintendency established that Certificates of Savings Deposits issued by financial institutions under the supervision of the Superintendency of Banks, Quota Shares of mutual funds and Financial Derivative Contracts are exempted from the payment of fees for the registration of securities issued, provided that the latter are traded or listed in a stock exchange authorized by the CNV.

In addition, the Superintendency clarified that Stock Market Advisors, operators of brokerage firms, operators of commodities brokers and Multilateral Organizations, where the Republic of Paraguay is a party, are exempted from the payment of fees for the application for registration and maintenance of the registry.

It should be noted that this Resolution was formally issued by the National Securities Commission, which was replaced in its functions by the Superintendence of Securities, created on September 1, 2023 with the enactment of Law No. 7162/2023.

The Superintendency of Securities regulates stock market advisory services in the General Regulations of the Securities Market.

The Superintendence of Securities (the "Superintendence") issued on August 17, 2023 Resolution CNV No. 40/23, in order to establish the conditions and requirements for the provision of stock advisory services in Paraguay. In this regard, such resolution incorporated a new title within the General Regulations of the Securities Market (the "Regulations"), number 34, especially dedicated to regulate these services.

General Provisions

The Superintendency defined securities advisory or stock market advisory as the making of personalized recommendations to a client with respect to one or more transactions related to financial instruments. It also excluded from this definition recommendations of a generic nature.

Next, it established that advisors must make an evaluation of their clients, preparing a personalized investment profile, for which purpose they must request, at least, certain data established in the resolution. These profiles must be available to the Superintendency.

The resolution also establishes that advisors must classify the investment products included in their offerings into complex and non-complex investment products, and establishes the classification parameters for each category. Complex investment products may only be offered to qualified investors or institutional investors.

Additionally, advisors must establish policies and procedures aimed at ensuring that the client understands the relationship between the risk and return of the products and that the client's financial situation allows the investments to be financed. Furthermore, they may only offer the client services and products that fit his or her profile.

Registration of advisors with the Superintendency

The Superintendency will set up a registry of persons providing stock market advisory services, called the Advisors Registry. These persons will be subject to the supervision and oversight regime of the Superintendency. In this sense, the advisors must provide the service themselves and may not delegate their functions.

The resolution establishes the documents to be submitted for registration in the Advisors Registry.

It should be noted that this Resolution was formally issued by the National Securities Commission, which was substituted in its functions by the Superintendence of Securities, created on September 1, 2023 with the enactment of Law No. 7162/2023.

Creation of the Superintendency of Securities in Paraguay

On September 2, 2023, Law No. 7162/23 "That creates the Superintendence of Securities in substitution of the National Securities Commission and grants it greater powers" was enacted, whereby the National Securities Commission ("CNV") is replaced by a new entity called the Superintendence of Securities, which will have a more robust and autonomous role in the supervision and regulation of the stock market.

The most relevant provisions implemented by Law No. 7162/23 are:

Chapter I: Creation and Structure of the Superintendency of Securities

As mentioned above, this law establishes the creation of the Superintendence of Securities, which will assume the responsibility of regulating, supervising and controlling the securities market in substitution of the CNV. Although this new entity will be part of the Central Bank of Paraguay ("BCP"), it will have functional autonomy to perform its functions.

As part of this change, the law provides that the Superintendence of Securities will be headed by a Superintendent of Securities, whose appointment will be the responsibility of the Executive Branch. The Superintendent will have a term of office of five years, with the possibility of being re-elected.

The selection of the Superintendent of Securities will be based on criteria of Paraguayan nationality, university degree and proven experience in areas related to economics, finance, law or other related fields.

The regulations prohibit the appointment of persons who have direct links with the entities supervised by the BCP, as well as those who may present conflicts of interest in relation to the decisions of the Superintendency of Securities. In addition, restrictions are established for persons with a history of fraudulent bankruptcy, convictions for financial crimes, among others.

Chapter I: Functions and Attributions of the Superintendency of Securities

In addition, the Law No. 7162/23 exclusively attributes to the Superintendency of Securities several functions and powers, including the supervision and inspection of the entities under its jurisdiction, the oversight of compliance with securities market regulations, the promotion of competition and transparency in the market, as well as the protection of investors.

The law also establishes that the Superintendency of Securities will assume the same functions and attributions previously held by the CNV, including those set forth in previous laws. In addition, all the properties, rights and powers that the previous laws granted to the CNV will be transferred to the BCP.

The internal structure and operational functioning of the Superintendency of Securities will be defined by the Board of Directors of the BCP.

Chapter II: Access to and Exchange of Information

In relation to the access and exchange of information, the Law No. 7162/23 establishes the powers of the Superintendency of Securities. This includes the ability to request, obtain and share information related to activities affecting the securities market, both nationally and internationally. In addition, confidentiality conditions are imposed on the information shared.

Chapter III: Securities Advice

It is also important to emphasize that the Law No. 7162/23 also introduces regulations in relation to stock advisory services within the Paraguayan territory. Those persons interested in providing this service must register in the records of the Superintendence of Securities and be subject to the regulations issued by this entity. Criminal penalties are established for those who provide advice without the proper registration.