FERRERE advised Terminal Occidental S.A. on drafting and negotiating an agreement for operation of Paraguay’s first Free Trade Zone for provision of services to entities and clients located outside the country. Execution of the agreement was authorized by Decree No. 5965 of September 13, 2021.

The investment foreseen by Terminal Occidental S.A. will be at least USD 22 million in the initial phase, with the possibility of other investments at later stages. The project involves construction of a modern 19-storey tower, where a wide variety of services will be provided, such as technical assistance, logistics, and business process outsourcing, to clients or individuals residing outside Paraguay.

In this connection, Paraguay’s Treasury Minister underscored that “the services sector has been growing rapidly over recent decades, and this sector represents close to 50% of Gross Domestic Product, so that it is extremely relevant for the country’s economy.”

It is important to note that Free Trade Zones are privately owned areas in national territory, but isolated from customs territory. Foreign trade transactions are conducted in the zones under beneficial tax, customs and foreign trade regulations.

In addition to being the first of its type, the Free Trade Zone to be built by Terminal Occidental will foster investment of local and international capital for the provision of services. In turn, it is expected to have a significant impact on employment, insofar as projections foresee the creation of 1,900 direct jobs and 2,000 indirect jobs during the construction and production phase, contributing to development of Paraguay’s Chaco region.

FERRERE’s work was led by partner Carlos Vasconsellos, together with practitioners Erika Bañuelos and Laura Magaly Fernández.