Paraguay Tax Guide for Global Citizens

Why Paraguay?

Paraguay is a landlocked country in the heart of South America with a surprisingly compelling mix of lifestyle, stability, and opportunity. It is one of the safest countries in the region, boasting a low crime rate and a calm political environment. The official languages are Spanish and Guaraní, and the currency is the Paraguayan guaraní (PYG). The country enjoys a subtropical climate, with warm summers, mild winters, and abundant sunshine year-round.

Paraguay is also strategically located, offering quick and easy access to Argentina, Brazil, and other Latin American markets. Direct flight connections to the United States are available from major cities. The cost of living is low, and it is possible to rent or buy a home at a fraction of the cost of equivalent properties in North America or Europe. While luxury properties in the capital Asunción can be expensive, most rental prices remain very affordable, especially outside the capital.

Paraguay is increasingly attracting global citizens looking for a secure base, simple legal systems, and favorable tax treatment.

The Territorial Tax System: A Game Changer

Paraguay's tax system is built around one key principle: only income generated within Paraguay is taxed. This is known as a territorial taxation model.

If your income comes from outside Paraguay—for example, if you are a consultant, freelancer, investor, or entrepreneur working with international clients or holding assets abroad—that income is not subject to Paraguayan taxation. It doesn’t matter if you are a resident or not. What matters is where the income is generated.

This system is straightforward and extremely attractive for those with a global footprint. Paraguay does not have wealth taxes, inheritance taxes, or gift taxes. There are also no exit taxes if you decide to relocate elsewhere in the future.

This makes Paraguay not only a tax-efficient choice, but also a simple and stress-free one.

Personal and Business Taxation

If you do generate income in Paraguay (for example, through employment, local business, or real estate), the tax system remains favorable:

• Personal income tax applies only to Paraguayan-source income and is levied at progressive rates from 8% to 10%.
• Capital gains on local assets are taxed at 8%, while capital gains from foreign assets are fully exempt.
• Corporate tax is a flat 10% on Paraguayan-source income. Foreign-source income earned by a Paraguayan company is not taxed.
• Dividends are taxed at 8% for residents and 15% for non-residents.

For small and micro-businesses, Paraguay offers simplified tax regimes such as IRE Simple and RESIMPLE, which make compliance easier and reduce costs.

Residency Options

Paraguay offers two accessible residency options for foreigners:

• Temporary Residency, which is valid for two years and can be converted into Permanent Residency.
• SUACE Permanent Residency, which offers direct access to permanent status through an investment and business plan.

The SUACE (Unified System for Opening and Closing Companies) program is especially popular among international entrepreneurs. By incorporating a local company and committing to an investment of at least USD 70,000 (spreadable over 10 years), you can obtain permanent residency in a matter of months.

These programs are practical, transparent, and open to a wide range of applicants.

Citizenship: A Possibility to Explore

One of the appealing long-term advantages of residency in Paraguay is the potential access to citizenship. After three years of permanent residency, you may be eligible to apply for naturalization as a Paraguayan citizen. This depends on various factors, including your integration into the country, basic knowledge of the language, and your economic or social ties.

While citizenship is not automatic, it is a viable path for many who choose to base themselves in Paraguay.

Who Should Consider Paraguay?

Paraguay is ideal for:

• Digital nomads and remote workers who want a legal base and no tax on their international earnings
• International entrepreneurs and investors looking for a flexible jurisdiction
• Crypto holders and capital gains earners seeking a zero-tax environment on foreign profits
• Families who value low living costs, safety, and future citizenship opportunities

Practical Considerations

• Foreign income is not taxed in Paraguay, as long as it is not connected to local business or activities.
• Banking is accessible and modern, though some banks may ask for proof of address.
• Real estate is affordable and varied. From city apartments to country estates, there is something for every budget.
• Healthcare and infrastructure are improving steadily, especially in Asunción and other urban centers.

How Travels & Savings Can Help

At Travels & Savings – The Tax Firm for Global Citizens, we specialize in helping individuals and families transition to low-tax jurisdictions like Paraguay with ease, safety, and full legal compliance.

Here’s how we can support you:

• Tax planning strategies tailored to digital nomads, entrepreneurs, and globally mobile individuals
• Structuring of international income to take full advantage of Paraguay's territorial tax system
• Formation of foreign and local companies and business structuring
• Opening of personal and corporate bank accounts
• Full assistance in obtaining Temporary Residency and SUACE Permanent Residency
• Preparation and filing of local income tax returns, where required
• Issuance and support in obtaining Tax Residency Certificates
• Real estate assistance: helping you find homes for rent or purchase that match your preferences and budget
• On-the-ground support: translations, notary services, insurance, and logistics for your relocation

Whether you are just exploring options or ready to move, our firm provides the insight and infrastructure you need to make Paraguay your next strategic base.

Get in touch with Travels & Savings to start your journey into one of the most welcoming and tax-efficient countries in the world.

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