In this article, you will find the general information covering most of the topics where we have expertise. This compilation is the result of years of experience helping clients and observing their main areas of interest.

The residency visa process is the cornerstone of our business and we take great pride knowing that we never had an application rejected. Since it is also the starting point for many clients wishing to plant a flag in Paraguay, the process is explained in great detail.

Other topics are covered more superficially, either because they are too broad to outline in this document, or too dependent on the client’s specific circumstances.

If you have a non-trivial question that is not covered here, you may want to schedule a basic consultation with a member of our team. Our video-conference consultations last up to one hour, and we will later follow-up on any lingering questions by email and instant messaging applications. Unfortunately, we cannot start discussing your case or call you before an initial consultation.

Temporary and Permanent Residency

In this article, we cover the standard immigration procedure which starts with an application for the temporary residency visa. An investment visa with a direct path to permanent residency also exists.

Our immigration service requires your visit in Asunción on two separate occasions, for up to 5 business days each time. At the end of the process, you will become a temporary resident of Paraguay.

In each visit, we will take you to and accompany you in various government institutions for the necessary immigration procedures. The timing between the first and the second visits is, on average, 4 to 6 months, under the regular service. An express service is also generally possible, where the second visit is scheduled for no longer than 45 days after the first. This may be convenient if you plan to stay in the region until the time for the second visit.

There are two documents that you will receive at the end of a successful application:

• The resident card;
• The national identity card (“cedula”).

On your second visit to Asunción, we will deliver the resident card to you, marking your official status as a temporary resident of Paraguay. The national identity card may take up to 2 months from your second visit to be issued. Once it is ready, we will mail it to your current location by courier service, free of charge.

The documents required for the temporary visa application are:

• • Passport photo;
  • Original birth certificate + certified copy with the Hague Apostille;
  • Original marriage/divorce certificate + certified copy with the Hague Apostille (only if married/divorced);
  • Passport with your entry stamped by the Paraguayan immigration authorities upon your arrival;
  • National certificate of criminal records with the Hague Apostille:
    • It must have been issued less than 21⁄2 months before your first arrival in Asunción;
    • It must be issued by a federal entity – state and provincial certificates are not acceptable;
    • A certificate is needed for every country which you were a resident of in the past 5 years.

Countries not participating in the Hague Convention, must substitute the Apostille by a consular legalization, which is a more time consuming and complex process. We cannot assist with the legalization steps outside Paraguay. A full list of participating countries can be found here.

Generally, you will not be required to produce sworn translations of your documents – we will do it on your behalf. Please do not make translations of any documents without our prior request.

All applicants, except Mercosur citizens, must request and purchase a visa on arrival at the airport upon entering the country, even if they are entitled to a free entry without visa. It is a very important step that cannot be overlooked as there is no way to start the residency process without the visa, which can only be acquired upon arrival.

Once you become a temporary resident, eligibility for permanent resident status becomes possible after 2 years.. Following 3 years of effective residency, an optional naturalization process can be filed in the Supreme Court to become a citizen of Paraguay.

In order to maintain your resident status, you must not be absent from Paraguay for more than 3 years. In other words, one visit every 3 years is enough to maintain the resident status.

The temporary residency visa application has a service fee (regular or express) and a document analysis fee. The payment is made in two steps:

• Document analysis fee upon acceptance of these terms and formal start of the process;
• Service fee when your documents are approved and the trip booked.

Depending on your specific circumstance, which may include your nationality and other added complexities, there could be additional charges. These charges will be communicated to you and agreed upon mutually.

The costs outlined above are per applicant. Children under 14 have a 50% discount on the service fee when applying with both parents (maximum two discounted fees per family.)

We work to the best of our abilities to achieve your immigration goal, but the ultimate decision to grant the visa lies with the government of Paraguay. Our fees are charged regardless of the outcome. Nevertheless, we have never had an immigration client turned down.

Citizenship

The obtaining of citizenship allows the individual to create deep socioeconomic and political ties in the country. Both direct descendants of Paraguayans and foreigners can apply for citizenship, fulfilling different requirements.

The process of acquiring citizenship for foreigners is called naturalization. The first step for a foreigner to obtain a Paraguayan citizenship is to have a residency visa for a minimum period of three years. Furthermore, demonstrating good conduct and establishing ties to the country are essential requirements.

By obtaining citizenship, the individual will have the same rights and obligations as Paraguayan citizens, including the right to vote and to be voted in the country’s elections.

It is important to point out that the process to obtain citizenship is potentially long and bureaucratic, being filed directly at the Supreme Court of Justice.

While Paraguay only expressly recognizes dual citizenship with Spain and Italy, it does not require the renouncing of other citizenships. Once granted, the revoking of Paraguayan citizenship may only be determined by the courts.

Paraguay Solutions has the necessary experience and qualification to make the process as transparent as possible.

Informally, it can be said that Paraguay approaches the concept of a tax haven, with the advantage of not being classified as such by international organizations. The country has a territorial taxation system, taxing only local income (e.g., rents), and exempting gains from abroad. For individuals, there is one exemption range and two tax brackets, of 8% and 10%; and for companies, there is a rate of 10%, as well as a special regime for small businesses.

Subsidiaries that remit profits to the parent company abroad are required to withhold 15% as well as pay 5% tax on the distribution of dividends.

There are two indirect taxes, the Value Added Tax (VAT) and the Selective Consumption Tax (ISC). VAT is generally 10%, with reductions and exemptions in some areas, while the ISC has a variable rate and focuses on imports of some products such as cigarettes and alcohol.

Social charges represent 26% of the payroll, with 16.5% applicable to the employer and 9.5% to the employee.

Other rates are historically low (e.g., real estate) or even nonexistent (e.g., inheritance).

Paraguay’s tax burden is low, especially when compared to its larger neighbors, such as Brazil and Argentina.

Due to the low tax regime, obtaining (and maintaining) tax resident status in Paraguay can be an integral part of efficient tax planning. Achieving this objective involves steps that depend on each person’s particular situation; however, one of the steps common to all is obtaining a residence visa in the country.

Only in possession of a residence visa can the individual create the RUC (Single Taxpayer Registration): a tax identification number necessary for the resident to start declaring and contributing taxes in the country. Your request is a personal and face-to-face procedure. However, clients who decide to incorporate companies in Paraguay can have the corporate RUC requested by means of a power of attorney.

Documentary demonstration of tax resident status is often a requirement required by other countries to stop taxing the income of their non-resident citizens. In these cases, the individual must demonstrate the new tax bond in Paraguay to his country of origin, breaking the previous bond.

In other cases, the country of origin allows the untying without the need for documentary evidence of tax status in another country – it suffices, for example, that the individual officially communicates his definitive departure and the new status of non-resident.

It is important to realize that tax residency in Paraguay, by itself, it has no effect on other tax residences that the individual may already have. It is the responsibility of the individual to carry out his tax planning in such a way that Paraguay is their only tax residency.

US Persons

The examples provided in the previous section may not entirely apply to citizens and residents of the United States of America, as this country imposes taxes on its taxpayers regardless of their place of residence.

Unless citizenship is renounced, US citizens and residents continue to be tax resident in the United States and report income in the United States. In this way, exclusive tax residency in another country is not possible, but this does not prevent obtaining an additional tax residency.

Indeed, in the case of North-Americans, there are benefits in establishing fiscal ties with other countries, such as Paraguay. The benefits, as well as the conditions for obtaining them, are outlined in theForeign Earned Income Exclusion (UGG). FEIE allows US taxpayers to enjoy tax exemption on part of their income, provided that certain requirements are met. The value of the exemption band is adjusted annually according to inflation.

There are two ways to qualify for FEIE:

• By physical absence from the US: the individual qualifies by being physically present in another country(ies) for at least 330 days during any consecutive 12-month period.
• By tax residence: the individual qualifies if he or she obtains, for an uninterrupted period that includes a full US tax year, genuine tax residency in another country.

It is important to note that among the two forms of qualification for FEIE, only one establishes a minimum number of days that the taxpayer must remain outside the US territory. Qualification via tax residency does not contain the 330-day absence restriction; in fact, she does not mention any specific period of absence.

On the other hand, the qualifying criterion based on tax residence is less objective than that of physical absence, leaving room for interpretation. It is plausible, therefore, that the authorities will be stricter with regard to proof, the longer the length of stay in the US.

However, with the right planning, obtaining tax residency in Paraguay can benefit US citizens who wish to qualify for the FEIE but are unable to meet the physical absence criterion.

More information about FEIE can be found at this link.

Paraguay Solutions can help you with your tax planning and other issues related to Paraguayan tax residency, but cannot help you with your tax situation in your country of origin.

For our immigration clients that wish to establish a permanent presence in Paraguay, we offer a separate, exclusive service which covers a flexible tenancy contract with a utility bill under the client’s name, and a mail handling concierge.

The legal address is ideal for Paraguayan residents that travel often but need a base in the country. We manage a portfolio of properties in and around Asunción with excellent location and easy access to basic services.

The Legal Address service has high demand and we suggest it’s pre-arranged by the start of the immigration application due to its limited availability.

For entrepreneurs, Paraguay is an attractive space, as labor, rent and energy costs are low. In fact, the energy self-sufficiency status has led the country, once primarily agrarian, to become a hub for ventures in areas as sophisticated as energy-intensive cryptocurrency mining.

As an open country, Paraguay does not limit the undertaking of business activities to foreigners in any sector of the economy. There are three types of companies:

Sociedad de Responsabilidad Limitada (SRL): The equivalent to Limited Liability Companies;

• Sociedad Anónima (SA): Traditional corporations;
• Sociedad por Acciones Simplificada
• (EAS): Simplified Joint-Stock Companies (EAS).

In all cases, the company must have at least one of the directors as a local resident.

SRLs apply to most activities and their creation is almost immediate. SAs, on the other hand, are entitled to carry out some exclusive activities in the financial sector and have their shares listed on the stock exchange. Finally, EAS are part of a new legal regime similar to that of SAs, with simplifications and fewer ancillary obligations.

Bank accounts for residents can be opened in guaranies and US dollars, but the banks are free to impose additional requirements, such as a proof of local income. Bank accounts for companies are also possible, but may require extensive documentation and persistence.

The main banks in Paraguay include: Sudameris, Itaú, Vision Banco, BBVA and Atlas.

If interested, we have banking relationships outside Paraguay and we can facilitate introductions after you become a resident.

Although small, the Paraguayan Stock Exchange (BVPASA) has been operating since 1993 and offers mainly bond issues in dollars and in the local currency, guaraníes. Bonus offers are in great demand due to the rates practiced, and USD returns above 7% are not unheard of. Currently, more than a dozen brokers, called Casas de Bolsa, are authorized by the National Securities and Exchange Commission to operate.

If you are the holder of a Paraguayan bank account, you may also open an account at an authorized broker.

Paraguay Solutions can provide general advice but does not have the power to guarantee the opening of bank accounts in Paraguay.

In recent years, Paraguay has experienced economic growth with a stable political environment, low inflation, and a favorable tax regime. This scenario has favored a real estate boom, with opportunities in both urban and rural areas. Although real estate prices have already increased, they are still low compared to its regional peers, opening up an opportunity for capital appreciation.

Foreigners can buy all types of real estate in Paraguay, including residential, commercial, and industrial properties, with little to no restrictions. The acquisition process is straightforward. In order to ensure a smooth experience, we offer a turnkey solution, accompanying clients from the search phase until the title deed.

In the capital and other bigger cities, medium and high standard developments with competitive prices spring up. Some of the cities that offer good opportunities include:

• Asunción: The capital is the most important city, with dozens of fresh new developments;
• Ciudad del Este: Right on the triple border with Brazil and Argentina, it is a growing and developing city with a thriving free zone;
• Encarnación: Encarnación is a tourist city in the south, known for its beaches;
• Lambaré: Close to Asunción, with potential due to its strategic location and rapid urban growth;
• Luque: Another city close to Asuncion, with quick access to the Silvio Pettirossi International Airport.

Paraguay also has opportunities in agricultural, livestock and forestry lands. The country has a diversified agricultural economy and is one of the largest producers of soybeans, beef and pulp in South America. In the north, the Chaco is sought after by investors looking for cheap land and the promise of underground water. In the south, arable and productive lands abound.

Rural properties are sold by area, with prices varying depending on the location, type of land and general market conditions. It is critical to conduct a thorough research, analyzing access to infrastructure, soil quality and the availability of water. We recommend working with a broker specialized in rural properties.

When investing in Paraguay, the following fees should be considered:

• Real Estate Transfer Tax (ITI): 1%;
• Real Estate Registry Fees: from 0.3% to 0.7%;
• Notary fees: from 0.5% to 1%;
• Legal and administrative fees: variable cost.

Paraguay Solutions helps you find the best property and maximize the potential return. We assist throughout the entire purchase cycle. If you are outside the country, virtual visits can be arranged in order to speed-up decision-making.

Regardless of the location, the application itself includes a health check, an eye exam, a driving test and the presentation of a few documents.

Paraguay Solutions may assist immigration clients in obtaining their driving licenses. We offer a turnkey solution for the fastest possible delivery.

The full course is arduous and takes months, but all theoretical classes may be attended virtually, greatly reducing the amount of time one must stay in the country.

It is mandatory to be a Paraguayan resident and undergo a simple medical evaluation to do the course. Only basic Spanish knowledge is needed, as there are classes for English speaking students.

Paraguay Solutions has partnered with the leading pilot school in the country and we offer exclusive conditions to our clients.

To apply for homologation, it is necessary to present documents such as the diploma, academic curriculum, and others. In some cases, a diploma revalidation exam conducted by a Paraguayan university may be required, which aims to verify the equivalence of the foreign diploma with the country’s teaching standards.

Once the documents are received by the Paraguayan MEC, an evaluation is carried out by a special committee to verify that the foreign diploma meets the homologation requirements. If the diploma is approved, a certificate will be issued equating it to a diploma from a Paraguayan higher education institution.

It is worth mentioning that the procedures and requirements for approval may vary according to the institution that issued the diploma and the country of origin. In addition, the homologation does not automatically guarantee the right to carry out professional activities in the country. For that, it is necessary to obtain professional qualification from the competent body, which may require the fulfillment of specific examinations and courses.

Paraguay Solutions is prepared to accompany you in all stages of homologation of the diploma in order to qualify you for the legal exercise of your profession in the country.

You may be required to show a proof of COVID-19 or yellow fever vaccine, depending on the sanitary policies in force.

The visa and sanitary policies change from time to time, and we do not keep up to date with the latest changes. Please do your own research before hiring our services and booking your trip.

Paraguay Solutions cannot help you with your tourist visa, but in some cases, we can arrange a business visa. If you need a business visa, please get in touch with our team.

Visa, Mastercard and AMEX credit cards are widely accepted in the country – you rarely need to use cash for purchases. Uber is available in the capital and neighboring cities. Asunción is a safe city.

If you wish to pay for a certain fee in cash while in Paraguay, note that cash payments are possible, but only in guaranies or brand new US dollar bills of USD50 and USD100 denominations, without the slightest marks or folds, and the USD100 bills must contain the distinctive blue stripe. We do not accept Euro, Pound and Brazilian Reals bills, but you may attempt to exchange your foreign currency at a local shop.

While you may withdraw cash using your debit card in ATMs in Paraguay, the rates are unfavorable and the maximum amount per withdrawal is low. We do not recommend using ATMs for attempting to withdraw large amounts. You are responsible for making prior cash arrangements and you must not attempt to arrange cash for service fees on the same day of your appointment.