Green fertiliser specialist ATOME Energy PLC (AIM:ATOM) has achieved a significant milestone with its 145MW Villeta Project in Paraguay after being granted Free-Trade Zone (FTZ) status by presidential decree.
It is only the sixth award of its kind in the country and brings with it certain financial advantages, including exemptions from various taxes such as municipal, value-added and corporate income levies.
Specifically, ATOME will benefit from VAT exemption on sales, imports of equipment and services, and services provided by the concessionaire to the FTZ.
Additionally, the project will enjoy a reduced effective corporate income tax rate of 3% on domestic sales and a mere 0.5% Free Trade Zone tax on export revenue, with no corporate income tax applied.
The decree also exempts ATOME from local and municipal taxes and charges, and from withholding taxes on remittances of profits or dividends to third countries.
"Through successive administrations, it has been both consistently crystal clear that Paraguay is open for business and encourages and supports serious foreign investors and investments," said ATOME chief executive Peter Levine.
"We are greatly honoured by President Peña by his signing of the decree for the tax-free zone in Villeta and we are grateful for the support and trust he and his ministers have given to us in this important landmark project for the country of Paraguay."
Paraguay's economic landscape further bolsters the project's prospects, ATOME noted.
The country has demonstrated political and economic stability, with one of the strongest-performing economies in Latin America.
As of October 2023, inflation has significantly decreased to 3%, and Fitch Ratings forecasts 5.2% economic growth for the year.
Additionally, the agency has affirmed Paraguay's stable outlook at a BB+ credit rating and raised the country ceiling to BBB-, reflecting the nation's growing economic resilience and potential.
ATOME is the London Stock Exchange's only green fertiliser company.