PARAGUAY

Paraguay: Residency


Paraguay has become a favorite among digital nomads, entrepreneurs and “Plan B” seekers who want a straightforward, low-tax residency without huge investment or strict stay requirements. Residency gives you access to a stable, quietly growing economy in the heart of Mercosur, a very low cost of living, and an easy-going lifestyle in cities like Asunción, Encarnación or Ciudad del Este. For EU residents and other foreigners, it’s a way to secure a legal base in South America, diversify from high-tax jurisdictions and keep options open for the future.


Under the current migration law (Law 6984/22), most foreigners start with temporary residency (valid up to 2 years, usually renewable once) and can then upgrade to permanent residency after completing the temporary period. Once you file, you’re covered by “residente precario” status so you can stay legally while the card is processed. With residency you can obtain a Paraguayan ID card (cédula), open local bank accounts, register a company, sign contracts, buy property and eventually apply for citizenship if you want a full second passport later on. 


  • Tax snapshot:
  • Territorial system: only Paraguay-source income is taxed; foreign-source income is generally 0%. Personal and corporate income tax on Paraguayan-source income is typically around 10%, plus VAT at 10% on local consumption.


No classic “183-day rule”: to keep residency you usually just need to visit at least one day per year (temporary) or once every three years (permanent), and to get/maintain tax residency you either keep your tax ID (RUC) active or spend roughly 120+ days in the country in a given year.


How foreigners obtain residency in Paraguay


Most applicants use the standard temporary → permanent route. You provide a set of apostilled documents (passport, birth certificate, clean criminal record, etc.). After filing, you receive precarious resident status while the temporary permit is processed (usually a few months). Once approved, you get a 2-year temporary residency card and cédula; around the end of that period, you apply to convert it into permanent residency.


For clients who want a faster or more structured route, there are investment-based options (often around USD 70,000 over two years with job creation) that can strengthen the case for long-term residency and future citizenship. Combined with Paraguay’s 0% tax on foreign income and light physical-presence rules, residency can be positioned as a powerful anchor for global entrepreneurs and digital nomads: they can keep living mostly elsewhere while holding a legitimate, low-tax residency in a stable South American jurisdiction. (As always, clients should check how their home country treats Paraguay residency and CFC rules before restructuring their tax life.)

What is Included:

  • Full residency processing
  • Paraguayan ID
  • Tax Residency Certificate
  • 1-year rental contract + utility bill
  • Driver’s license RUC registration
  • Accounting advisory & 1-year tax declaration
  • DHL courier of final documents

Paraguay: Company Incorporation


Paraguay is emerging as a quiet favourite for founders and investors who want a simple, low-tax jurisdiction with very competitive operating costs. It offers political and monetary stability, access to the Mercosur region, and a young workforce at significantly lower wage levels than many neighbouring countries. For digital nomads and small online businesses, a Paraguayan company can serve as a cost-effective base for regional services, logistics, e-commerce, agriculture-related ventures and support operations.


The country also uses a territorial tax approach, focusing its income tax on Paraguayan-source income and offering a straightforward corporate tax structure. Incorporation of common forms such as SRL or SA is relatively fast, and foreigners can hold all the shares. For founders used to higher-tax or more bureaucratic environments, Paraguay offers a combination of low corporate tax, light wealth/estate taxation and very modest day-to-day costs of doing business and living.


  • Tax snapshot:
  • Corporate income tax is generally a flat 10% on business profits, with VAT at 10% and simplified regimes for very small businesses that can bring effective rates even lower. Dividends to non-resident shareholders are typically subject to 15% withholding (8% for residents). Paraguay operates a territorial system where only Paraguayan-source income is taxed; foreign-source income is usually exempt.


Non-resident founders


Paraguay allows 100% foreign ownership of local companies, and there is no obligation for shareholders to live in the country. An EU-based entrepreneur can set up an SRL or SA, appoint themselves or other foreign partners as directors, and manage the business remotely, provided they maintain a local registered address and comply with accounting and tax filings through local providers.


Choosing to obtain Paraguayan tax residency, you may benefit personally from the territorial system (foreign-sourced personal income is not taxed), which can be attractive for perpetual travelers. But even without moving, a non-resident can use a Paraguayan company as a low-tax vehicle for income generated within Paraguay.

What is Included:

  • SRL or EAS incorporation
  • Corporate bylaws
  • Registration with Public Registries
  • RUC registration

BENEFITS:

  • Territorial taxation: Foreign income not taxed
  • 10% Corporate Income Tax (IRE)
  • 10% VAT Easy market access in South America
  • Attractive for digital nomads & entrepreneurs