Egypt and Paraguay established diplomatic relations in 1959, on non - resident basis on the part of Egypt while Paraguay has a resident Embassy.

Political Relations
Egyptian Ambassadors, residing in Uruguay, had continuous relations with Paraguay.Ambassadors travel twice a year at least to discuss bilateral relations. The last visit was from July 17 to 19, 2010. Also, some members of the Egyptian Embassy’s staff travel to Paraguay in case there are consular issues concerning the Egyptian community living there or delegations visiting the country.In March 2007, the Foreign Ministry agreed to aid Paraguay with 150.000 Egyptian pounds worth of medical and health assistance during the Dengue Fever that plagued the country at the time.

Mutual Visits
The last official visit to Paraguay was the Assistant Foreign Minister for the Americas Ambassador in November 2009, heading political consultations. An Agreement on Scientific and Technologic Cooperation was signed on the 10th.Former Foreign Minister of Paraguay Alejandro Hamed visited Egypt twice, the first in March 2009 upon invitation of Foreign Minister, to hold political consultations and the second was in July 2009, heading the Paraguayan delegation to participate of the 15th Meeting of Non Aligned countries held in Sharm El-Sheikh.
 
Economic Relations
 The trade between both countries is limited because of geographical distance and cost of freight.
Paraguay is a member of MERCOSUR and an FTA has been signed between MERCOSUR and Egypt in August 2010.

Paraguay exports mainly beef to Egypt.
According to available statistics the balance of trade between both countries has risen from an average of US$ 215.000 to US$4.500.000 in 2007, and to 19.600.000 dollars in 2008.
The Embassy has succeeded through members of the Egyptian community in Paraguay to export fridges and electric ovens.
The Embassy keeps constant and regular contacts with the Chamber of Commerce in Paraguay in an attempt to increase exports.  However, in light of the Paraguayan situation as a landlocked country and the high freight costs, they all limit the enthusiasm of the Egyptian businessmen to enter the Paraguayan market
At the moment, the Embassy is trying to reach joint ventures in manufacturing and exporting pharmaceuticals.
Soya oil tops the list of Paraguayan exports to Egypt, with a percentage of 72% of the total exports to Egypt, followed by beef with a 15% and fertilizers with 11%.
The total amount of Paraguayan imports from Egypt amounted to US$ 5.000, in 2003, raising to US$ 339.000 in 2007 and falling in 2008 to US$ 270.000.
Tobacco heads the Egyptian exports to Paraguay with 46% of the total exports to Paraguay, followed by shaving blades and machines with 20%, cooking utensils 17%, electric and housing appliances and cotton products and carpets 17%.

Contractual Framework
A commercial agreement was signed on May 11, 1977 and became effected on June 15, 1978.
Memorandum of Understanding on Consultations between the Foreign Ministries of both countries was signed on June 14, 2006.
Memorandum of Understanding between the diplomatic institutes of both countries was signed on March 5, 2009.
Agreement on Scientific and Technologic Cooperation between both countries on November 10, 2009.
Agreement on the exemption of visas on diplomatic, official, service and special passports was signed on September 14, 2006 and became effective June 28th, 2010.
 
Scientific and Cultural Cooperation

 Paraguay takes advantage of three scholarships per year from the Egyptian International Center for Agriculture in addition to the participation in other cultural activities.