Paraguay is among the top destinations for foreigners to reside in Latin America, like Panama.

There are many reasons, but the tax authorities reveal that Paraguay has a very simple tax rule: 10-10-10.
This formula means that the three most important taxes—value added tax (VAT), personal income, and business income—have the same rate: 10%.
This percentage is the lowest in all of Latin America for the three taxes, with the exception of VAT in Panama (7%).
This characteristic, which has become state policy, is cited by the South American country's leaders as one of the strengths for developing its economy and attracting investments that could go to other countries in the region. Above all, it attracts almost five times the amount of direct investment and eight times the number of foreign residents, attracted by the formidable national political regime. Furthermore, Paraguay is a tax haven and also applies territorial taxation, so if you are a foreigner and earn income of any value from abroad, your taxes in Paraguay will be zero and you won't even have to file annual accounts. The first step to living in Paraguay is obtaining temporary Paraguayan residency.

Tax residency in Paraguay is obtained by staying 183+ days in the country over a 12-month period. For crypto traders and stock market investors, it's an excellent place to obtain this document. If you need to establish true tax residency and want to legally pay zero taxes and be subject to territorial taxation, Paraguay, among all the countries we offer, is one of the few plausible choices, along with Panama. Panama also requires a 183+1 day stay. As with all tax residencies worldwide, Paraguay will also require you to provide your RUC (Tax Code) to apply for the certificate. The RUC is your tax code, which you can request when applying for residency with us for a fee of USD 400. Please note that obtaining temporary residency in Paraguay already provides full access to tax residency in Paraguay.

RESIDENCE IN PARAGUAY   Year 2023 : Paraguay has changed the terms for obtaining residency. Law 6984/2022 repeals Law 978/1996 on Paraguayan permanent residency. Residency is now granted quickly, with no need to open a bank account (now optional) and without having to meet requirements deemed offensive by the United Nations (absence of disability, impaired physical condition, absence of infectious diseases). Residency will no longer be permanent, but provisional or temporary for two years and then renewed to permanent from the third year. The years required to obtain a passport remain the same: three years of permanent residency, of which the last two years require at least nine months of annual residence in Paraguay.     Official link.

Temporary residency in Paraguay is very affordable. Paraguay is one of the countries to move to for the lowest taxes. Temporary residency in Paraguay is a valid and often preferable alternative to residency in Panama when you're not looking for highly professional, offshore banking or corporate services. Moving to live and work with temporary residency in Paraguay is easy for Italian expatriates. Furthermore, Paraguay is not a dangerous country and is an attractive destination for families with small children. How do you obtain residency in Paraguay? Obtaining temporary residency in Paraguay for Italians is still very simple and desirable thanks to the simple local regulations that do not require mandatory residency or the production of excessive documents. The Paraguayan residency visa is temporary for the first two years and permanent from the third year onwards. After three years of permanent residency in the country , it allows you to apply for Paraguayan citizenship and therefore a Paraguayan passport.

Permanent residence in Paraguay for Americans

The documents required to apply for residency in Paraguay, initially temporary/provisional and then permanent, are simple and easily obtained in your country of residence. Expatriating with residency in Paraguay offers exceptional benefits for Italians, both in terms of tax and bureaucratic procedures once settled in the country. Transferring residency to Paraguay, unlike Panama, allows you to use your educational qualifications without taking refresher or conversion exams in almost all cases, and without translating your documents and certifications into Spanish in over half of cases. Furthermore, the country offers excellent social security, and the extremely low crime rate means that Paraguay is not considered dangerous in any way. Therefore, you can travel in Paraguay as safely as in Italy.

Advantages of residency in Paraguay

The advantages of residing in Paraguay are very simple to understand. The country boasts great opportunities from any point of view. The Republic of Paraguay is a landlocked South American country and a member of Mercosur and Unasur. It borders Argentina to the southeast, south, and southwest, Bolivia to the north, and Brazil to the east. It is the fifth smallest and fourth least populated country in South America, with about 7 million inhabitants. Its territory includes two different regions separated by the Paraguay River: the western one, which is the most populated, and the eastern one, which is part of the Chaco, a semi-arid and sparsely populated wild region. Although it is a landlocked state, it has ports on the Paraguay and Paraná rivers which give it an outlet to the Atlantic Ocean via the Paraná-Paraguay waterway. Its capital, political and economic center is Asuncion. Its official languages ​​are Spanish and Guaraní and its official currency is the Paraguayan Guarani (PYG).

Paraguay boasts over eight million hectares of available fertile land and abundant fresh water from one of the largest aquifers on the planet, the Guaraní. The country is one of the world's leading exporters of soybeans, soybean oil, chia and soybean meal, yucca meal, corn, beef, wheat, and the largest exporter of stevia and organic sugar, as well as exporting cotton, animal feed and leather products. Paraguayan agriculture has also commercially exploited quebracho, hardwoods, cedars and orange groves, which provide petitgrains, used in perfumes and condiments.

Residence in Paraguay: living in the country of electricity 

Paraguay is also America's largest exporter of electricity. Its hydroelectric plants (Acaray, Yguazú, Corpus Christi, Itaipú and Yacyretá) cover 100% of the country's electricity needs, as well as exporting over 90% of the energy generated, mainly to Brazil.

Its mining industry is also on the rise. In recent years, large deposits of titanium, uranium and gold have been found. There are indications that the largest deposits of titanium in the world can be found in the east of the country. The country's mining is in its infancy, so there may be a very good chance of finding iron ore, diamond, gas and oil mines. Obtaining residency in Paraguay, for example, also benefits investors or those interested in exploiting these sectors. Tax residence in Paraguay allows you to have tax advantages up to zero in taxable income.

Residency in Paraguay and territorial taxation

As mentioned, Paraguay is one of the countries where to move to pay less taxes. Residency in Paraguay is also taken with a view to advanced tax optimization. As for Panama, the Residency in Paraguay also offers the same results in terms of offshore tax residence. The country also has a favorable tax regime; foreign source income cannot be taxed and local source income is subject to a 10% tax rate. This is called territorial taxation. It also has several free trade areas and incentives and tax exemptions for entrepreneurship in certain economic sectors. Its immigration policy is remarkably liberal, whereby permanent and instant residency in Paraguay can be obtained with low requirements and citizenship can be granted after 3 years very loosely.

Paraguay is a land of opportunity. Often called the heart of America. Asunción, its capital, and the border city of Ciudad del Este.

With almost no restrictions on settling down, a low and territorial tax system and an affordable cost of living allows you to pay zero capital gains taxes once you become a Paraguayan resident. The largest aquifer on the planet, abundant cheap fertile lands, and a constantly growing emerging economy with several untapped markets. With all this, Paraguay could be a place to consider for planting several strategic flags.

In Paraguay, foreign investors have the same guarantees, rights and obligations as any local. There are no restricted areas, no discrimination and there are no limitations. Paraguay is considered by the Economic Commission for Latin America and the Caribbean (ECLAC) as the economy with the best ROI in all of South America. It is a member of the Mercosur Free Trade Area, which has trade agreements with the Andean Community, Egypt, Israel, Palestine, Mexico, Cuba, India, and the Southern African Customs Union (SACU), among others. In addition to negotiating the free trade agreement with the European Union, which could be signed in two years.

How to obtain residency in Paraguay?

In Paraguay life is very good. Living in Paraguay can be very comfortable for Europeans and North Americans. The country turns out to be the most loved by Italians, Germans, Spanish and Portuguese for the undeniable cultural affinities between Paraguay and these European countries. There is no shortage of many French and Swiss people who choose Paraguay as their new home after retirement. Many decide to move to live in Paraguay mainly for the easy opportunity to obtain Paraguayan citizenship and passport. But why does Paraguay enjoy so much good fame? Essentially it is due to the calm and social peace existing in the country, which makes it the safest place to emigrate to in Latin America. The country is a haven of security but also of real and tangible cultural and historical affinities with the country that allow the foreigner to really adapt to life without any effort. Living in Paraguay is therefore easy, convenient and safe. To live and invest in Paraguay you just need to take up the easy residence we offer. Furthermore, living in Paraguay does not require any adaptation given the historical Italian, Spanish, German, French traditions already present and exported from decades of presence in Paraguay, so as to make everything particularly simple for newcomers.

The documents required to obtain temporary residency in Paraguay are:

Apostilled Cumulative Registry Certificate, Apostilled Birth Certificate Extract, Apostilled General Criminal Record, Apostilled Certificate of Pending Charges, Original Passport with over 6 months of validity, original Italian identity card.

In many customers they asked us to issue a simple guide on how to residence in Paraguay and what documents to ask. One of the peculiarities of Paraguay is that it offers the same type of residence to all the citizens of the world without distinguishing a nation from the others in a specific way / procedure (such as Panama does). This generic procedure, albeit simpler because it no longer requires open an account or company, offers excellent residence that is initially provisionally and which after 2 years becomes permanent by making it requested with a new procedure to be redone of Vento. The guide to residence in Paraguay is therefore essentially being able to obtain the documents described in the previous point and being able to enter the country with a passport with 12 months of minimum validity. From this moment you can rely on our experiences and immigration, without therefore having doubts or uncertainties about the outcome. Contact us to receive specific advice on Paraguay, because this country offers many advantages compared to Panama on some fronts and it is not easy to compare the two nations if it is not necessary by case to case on the customer's personal needs that requires the tax residence service.

To convert temporary residency in Paraguay (which lasts two years) into permanent residency, follow these steps:

You must begin the process within three months of your temporary residency expiring. If you miss the deadline, you can still apply within one month, subject to a small fine. Applying to renew your residency in Paraguay requires submitting the same documents you initially provided for temporary residency. Renewing your residency from temporary to permanent does not pose any particular acceptance issues. In Paraguay, if you have maintained the requirements with which you applied and finally obtained your first temporary residency in Paraguay, you will automatically be upgraded to permanent residency in Paraguay. There are a few exceptions. For example, if you applied for an upgrade to permanent residency after the month your temporary residency expired, in which case you will be granted a new temporary residency for another two years, and you will have to pay a small late fee. Always contact us at least three months in advance before renewing your residency. With our service, renewing to permanent residency takes three days, compared to the average 80-day process. When you renew your Paraguayan temporary residency to permanent residency, you will also need to renew your identity card. Upgrading your Paraguayan temporary residency to permanent residency allows you to meet the requirements for naturalization as a Paraguayan citizen. Remember that in Paraguay, permanent residency must also be updated every 10 years, and to become a Paraguayan citizen, you must wait three years of permanent residency, living in Paraguay for at least nine months of each year for the last three years.

Suece in Paraguay is a government office designed to facilitate foreign investments. It works as a single door where an investor can open a company, record the activity and start the process to obtain the residence, all in the same place and with fewer bureaucracy. It was created to make the arrival of new entrepreneurs in the country easier and faster. The residence that is issued with Sueace is immediately permanent. The requirements to be met are to open a business, which uses minimum 5 citizens of the Paraguay to which to salary and pay the local mutual as any other employee formally used. The minimum investment for Suace is from USD 70,000.

If your goal is to take a residence that conducts citizenship without onerous investments and without tax obligations and the use of local employees, it is not convenient to do Suace. The reason is that to access naturalization, first of all it is needed with 3 years of permanent residence in the country. So if you access the normal residence program that consists of 2 years of provisional residence plus a third year of permanent residence you will only have to wait for another two years for naturalization for a total of 5 years, or if you access Suace and do three years in a period of permanent residence, you can equally access naturalization. There will always be 3 years of permanent residence to be respected. So if you are not entrepreneurs and do not want to invest a large amount of money via suace and your goal is only the naturalization with a passport then proceed only to the common residence. It should be remembered that, unlike Panama, Lately Paraguay has clarified and established that to access the naturalization you need to live 3 years as a permanent resident in the country, and you lose a year every time you are absent for more than three months.

The naturalization or obtaining of the citizenship of Paraguay is the process that leads to a permanent resident of the country to become a citizen of Paraguay and therefore also obtain the passport of Paraguay. The primary condition for naturalization is to obtain permanent residence and then then live 3 years within the borders of the country with this permanent residence. It is important to understand that during the 3 years of permanent residence you cannot leave the country for over 3 months per year. If you do it, lose one year for each year in which you spend over 3 months outside. So to access citizenship you have to live in the territory 9 months per year at least for 3 years from the achievement of the permanent residence. Unlike Panama that allows you to live outside the country always without even a day calculated in the country, and access citizenship and passport, Paraguay requires your presence in the territory compulsorily to be able to access naturalization.

Important note : Paraguay does not allow double citizenship to any citizen of the world except two countries. The only two only countries in the world that can enjoy the double citizenship are Italy and Spain, as they have unique countries to have entered into a treatise on the right to double citizenship with Paraguay. The remaining citizens of other countries must abandon their citizenship in favor of that of Paraguay if they decide naturalize.

As mentioned, there are no restrictions on foreign ownership of local companies in Paraguay. There are also no limits to remittances of profits and capital flows abroad. The company in Paraguay should be opened only if you apply for residency as an investor. For Italians it is not a mandatory step.

Open company and account in Paraguay

The most common forms of business among foreign investors taking up residence in Paraguay are:

• Sociedad Anónima (SA): equivalent to a public limited company. Minimum of two shareholders required, individuals or corporations. There is no minimum capital requirement, except for public companies. The capital is divided into bearer or registered shares and these can be freely traded. The share capital must be fully subscribed. Commercial law requires companies to establish a legal reserve of 20% of the share capital, established annually with at least 5% of the profits. The appointed directors may be of Paraguayan or foreign nationality, but must be resident in Paraguayan territory. The supervision of the Administration and Management of the Company is entrusted to one or more trustees. It can be opened even if you do not have a residence in Paraguay.
• Sociedad de Responsabilidad Limitada (SRL): similar to an American single-personnel LLC and an Italian SRL. A minimum of two partners up to a maximum of 25 with limited liability for their contributions to the capital of the company. There is no minimum capital requirement, which can also be incorporated into assets or fixed assets. The share capital must be fully subscribed and at least 50% paid up. Shares cannot be traded freely. The commercial law provides for a legal reserve of 20% of the capital, which will be established annually with at least 5% of the profits. The SRL cannot carry out banking, insurance, capitalization or savings activities.
• Empresa Individual de Responsabilidad Limitada (EIRL): equivalent to an Italian SRL. The owner is responsible for the contributed capital, which must be at least PYG 82,000,000 (USD 15,000).
• Branch: Foreign companies that want to operate regularly in Paraguay can open a branch or a representative office with domicile in the country. These are authorized to carry out all the operations of which the company is capable in their own country. A branch must meet local business disclosure and tax requirements. A minimum allocated capital of USD 25,000 is required. The branch manager must be resident in Paraguay. The establishment of a company takes approximately 30 to 60 days, and its cost depends on the share capital and services to be listed with respect to its establishment and operation. Setting up a public company takes longer and is more expensive.

Account opening in Paraguay

Opening an account in Paraguay was necessary to be able to demonstrate the economic solvency of 5,000 USD to be deposited in cash in the country when the residence in Paraguay still provided for the requirement of own economic solvency until 2022. To open an account in Paraguay you need a bank reference and its physical presence in the branch. Opening an account in Paraguay is a very simple and easy procedure to do locally during your stay to obtain residency in Paraguay. Furthermore, taking up residence in Paraguay requires the opening of a bank account in Paraguay as mandatory.

Documents required for opening an account in Paraguay

The documents required for opening an account in Paraguay are :

•  Bank reference issued by the Italian or foreign bank where you have been account holders for at least 2 years. The reference must be issued in English and only 2 weeks before your trip to obtain residence in Paraguay.
•  Bank account extract in the last six months from the same issuing bank, the bank reference.
•  Passport and identity card or original license

Alternatives to residency in Paraguay

If you are interested in a tax residence in another country with the same advantages, find out how to take up residence in Panama

You may also be interested in opening an offshore account with your residence in Paraguay

How many Italians live and legally reside in Paraguay?

According to the migration of Paraguay it is estimated that around 28,000 Italians live in Paraguay with a legal residence. Few are AIRE members.

How much does residency in Paraguay cost?

Temporary residence in Paraguay costs 2500 USD .

Obtaining residency in Paraguay is very advantageous financially and is cheaper than in Panama; however, it clearly doesn't offer the same level of banking services and doesn't include the mandatory Panamanian company fees, nor does it include opening a bank account, which Panamanian residency requires by law.

Is the company compulsory for residency in Paraguay?

No. In fact, for this reason, residence in Paraguay is cheaper than in Panama

Do I have to open an account in Paraguay?

Until 2022 it was mandatory, from 2023 with the derogation from the passed law, it is no longer necessary to open an account in Paraguay. However, we offer the account in Paraguay to anyone who wants to open it anyway for practical and economic reasons.

What is required to obtain residency in Paraguay?

Residency in Paraguay is easily obtained. Paraguay's immigration policy is considered liberal. A permanent residence permit in Paraguay can be obtained immediately. Paraguay is among the countries where it is easy to move legally and where many Italians live who are very well received and integrated.

To obtain permanent residency in Paraguay, it is not even required to have previously resided in or visited the country. At an embassy or consulate, an individual must apply for a visa to enter the country (if applicable). Italians are under no obligation to apply for such a visa before leaving. Once done, the prospective resident must travel to Paraguay to process the application through our law firm in Paraguay. The initial procedure to proceed with the application for residence in Paraguay starts from Italy. It all starts at least 2 months in advance.

What are the economic requirements for residency in Paraguay?

The economic requirements were anecdotal until 2022, a bank deposit into the account we will open for you in the amount equivalent to 35 monthly minimum wages, currently totaling PYG 24,554,600 (≈ USD 4,500). The deposit could be made at the Central Bank (non-interest bearing) or any commercial bank. Once the procedure is completed, the deposit can be withdrawn in full. From 2023 there is already no economic requirement.

It is possible to invest 70,000 USD in a company and employ local citizens (SUACE) in order to be able to directly claim permanent residence in Paraguay.

Documents to obtain residency in Paraguay

The necessary documents are: valid passport with entry visa (if applicable), birth certificate, criminal record of the country of residence, civil status certificate, life and residence certificate, health certificate and Declaration of conformity with article 23 of the Law 978/96 (we do it). Initially send us the PDF copies via email to facilitate translations, and then travel with the originals later.

The application for Paraguay residency takes one week to complete. Legal assistance is absolutely necessary if you don't speak Spanish. During the entire follow-up process, it is possible to delegate the power of attorney to one of our legal representatives. At Studio Panama Italia we have qualified lawyers for immigration in Paraguay. Contact us for more information or start emigrating to Paraguay. It is possible to include dependents, both parents, spouses and children whenever and when you have parental authority in the case of minors.

Paraguay offers good tax residency, so many wonder if Paraguay is also a good place to open a bank account. While Paraguay has excellent requirements for tax residency on paper, it lacks banking skills. Bank accounts in Paraguay are subject to too many clauses and requirements, primarily requiring a tax code, a pay slip, and receiving funds primarily locally. Foreign funds must be substantiated with proof of funds and invoices, as banks are quite susceptible to high amounts from abroad, even from digital nomads. Due to a nascent banking system that is yet to fully develop, if you're looking for a winning combination of residency and a bank account, we recommend Panama, which has a world-renowned offshore financial and banking center. Ultimately, opening an offshore bank account in Paraguay is possible, but subject to special scrutiny and tax and financial requirements, and the account will initially be in a local currency.