Simplified Stock Companies Legislation

CONTEXT:

Paraguay has significant challenges in the business climate.

The “Doing Business 2019” ranking shows that the country is ranked 113 out of 190 countries, although it is in a better position than Argentina and Bolivia in that year, the country has significant challenges regarding business opening , obtaining credits and resolution of the insolvency of companies.

SUPPORT MECHANISM:

This Law of Simplified Stock Companies (EAS for its acronym in Spanish) is the sum of efforts to articulate solutions to the barriers reported by the stakeholders of the entrepreneurial ecosystem: the bureaucratic difficulties for the creation and formalization of new companies. In collaboration with entrepreneur organizations, there was public analysis of the draft EAS Law with a view towards further developing and articulating the business ecosystem.

This Law seeks to facilitate the opening of companies and the increase of new formal companies, increase productivity and at the same time create a greater number of employment with social security.

MSMEs are the largest creators of employment in the country, so 3 out of every 4 people employed (76%) are employed in companies with up to 50 people.

This law allows the rapid, simple, digital and free formal registration of new companies. In addition, the restructuring the country’s investment and export network gives entrepreneurs access to international market opportunities, facilitating participation in overseas trade missions.

IMPLEMENTING AGENCIES:

This law will be implemented in a coordinated manner by the following institutions:

  • Ministry of Finance 
  • Ministry of Industry and Commerce (MIC):
    • Unified System for Opening and Closing Companies (SUACE)
    • National Entrepreneurship Directorate (DINAEM)
  • Ministry of Labor, Employment and Social Security (MTESS)
  • Institute of Social Security (IPS)
  • Court of Justice:
    • General Directorate of Public Registries
ELIGIBILITY:

The Law of Simplified Stock Companies (EAS for its acronym in Spanish), may be constituted by one or more natural or legal persons, who make contributions in order to carry out a lawful lucrative activity in an organized manner, participating in the benefits and bearing the losses in the form provided for in this Law. The unipersonal EAS cannot constitute or participate in another unipersonal EAS.

Timeline:

March 2019: The Executive Branch presented a package of projects to strengthen the country's business climate.

November 14, 2019: The Law was approved in the House of Representatives

December 11, 2019: The Senate then unanimously approved it.

January 8, 2020: The President signed the bill into Law on

August 28, 2020: Official Publication of the Regulatory Decree of the Law

November 2020: Implementation expected to begin.

KEY ADVISOR(S) OR LEADER(S):

The enforcement of the law was the result of a coordinated work between the Ministry of Finance, the Ministry of Industry and Commerce, the Management Unit of the Presidency of the Republic and relevant legislators in both Chambers of the National Congress.

NOTES + ADDITIONAL CONTEXT:

The Simplified Stock Companies (EAS for its acronym in Spanish), is a type of company, very innovative in Paraguayan corporate law. Its objective is to stimulate entrepreneurship, due to the facilities and flexibilities proposed for its constitution and operation.

The EAS can be constituted by one or several natural or legal persons, its nature is commercial, it is created by a standard form and it is born after the registration of the Ministry of Finance. The process is completely digital and free.

CURATED BY

Ministry of Industry and Commerce of Paraguay, Transferteq - Technology Transfer and Innovation
Paraguay
Ministry of Industry and Commerce of Paraguay, Transferteq - Technology Transfer and Innovation
Paraguay
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