Paraguay Moves to Extend Maquila Benefits to BPOs

Paraguayan President Santiago Peña has announced plans to expand the country’s successful maquila regime to cover digital services, a step expected to give a strong push to the nation’s business process outsourcing and knowledge process outsourcing sectors.

Originally designed to support manufacturing, the maquila program has become a key growth driver. In 2023, maquila exports surpassed $1.02 billion, accounting for 8.6% of Paraguay’s total exports. Building on this success, the government now aims to extend the framework to the services industry.

The proposal is currently under debate in the Legislative Assembly as part of a wider economic reform package.

Pablo Zabala, president of the Paraguayan Chamber of Contact Centers and BPOs, told local publication La Nación that the reform would provide much-needed legal clarity for service providers already exporting abroad. At present, only four service firms operate under the maquila system, which offers major tax advantages — most notably a 1% income tax on revenues.

Paraguay’s BPO/KPO sector employs about 12,000 workers, many of them youth, single mothers, and older adults — highlighting its strong social impact. With targeted training in English and soft skills, Zabala said, employment could expand rapidly.

He added that with sustained double-digit growth, Paraguay could eventually mirror Córdoba, Argentina, which once hosted 50,000 BPO jobs. The Chamber projects annual growth of up to 15%, strengthening Paraguay’s position as a rising outsourcing hub in Latin America.