Legal Market Overview
A strict lockdown and strongly enforced measures in the early months of the pandemic had kept the virus’s impact relatively low in Paraguay, but insufficient access to vaccines for its population and an ailing health system saw a new peak of infections and deaths in late spring 2021.
The economic impact and efforts to mitigate Covid-19 remain uncertain. Prior to the pandemic, the country had seen stability and continual, measured growth. However, as an export-heavy economy, the region’s health is important to the country and with other countries struggling too this is likely to hinder recovery efforts.
This uncertainty has seen a slowdown in what was a maturing M&A market, while corporate law instructions were dominated by firms needing to keep clients abreast of relevant legal and regulatory changes throughout the lockdown and pandemic.
The relatively new competition law is also becoming increasingly important for companies to consider and as such The Legal 500 has introduced a new Competition and Antitrust list reflecting firms’ growing focus on this area and the formation of dedicated departments in the area.
As seen in legal markets across the world, labour and employment teams were in high demand since the onset of the pandemic, and in Paraguay firms have been advising on major restructurings, mass suspensions and layoffs as government support during and after the lockdown was late and of a low value. Furlough pay was only put in place after the lockdown period, and with no employment insurance in Paraguay, major changes were needed across a range of sectors.
The introduction of major international banks into the Paraguayan market should bolster efforts to maintain a boom in infrastructure projects across the country despite the pandemic. Transport and healthcare projects in particular will look to continue as soon as possible, and should domestic banks struggle to provide as much financing as in previous years then further international investment will be crucial.
In tax, a slew of reforms that had been introduced in January 2020 were subsequently delayed or watered down as a result of the lockdown, with the government not wanting to risk further economic damage. Transfer pricing rules have been implemented as of January 2021 and multinationals have looked to Paraguay’s leading law firms for advice on compliance.
The local legal market has been stable in recent years and a group of full-service law firms handle the majority of the complex, cross-border matters in most areas. Regional giant Ferrere is now thoroughly established in the country, while domestic firms Estudio Jurídico Gross Brown, BKM | Berkemeyer and Vouga Abogados all now offer robust services across the range of practice areas, growing year-on-year.
Other firms with a broad service offering include Peroni Sosa Tellechea Burt & Narvaja, Moreno Ruffinelli & Asociados, Olmedo Abogados and MERSAN Abogados. Also worthy of note is the emergence of Vinclum Abogados & Consultores, which – founded in 2019 with the specific intention of offering a one-stop shop service – is beginning to gain traction in the market. Paraguay also counts a number of notable boutique practices, particularly in the environment, labour and IP disciplines.