Move to Paraguay and become tax resident
Overview
Paraguay is a landlocked country in South America, bordered by Argentina, Brazil, and Bolivia. Known for its stable economy, low cost of living, and business-friendly environment, it offers attractive residency programs, including a permanent residency option with minimal requirements.
Paraguay is increasingly popular among expatriates and investors due to its favorable tax policies.
Its official languages are Spanish and Guarani and its official currency is the Paraguayan Guarani (PYG).
The country offers great social security and a very low delinquency rate.
Paraguay’s cost of living is generally considered to be lower than in many other South American countries. However, it will inevitably vary depending on the city and region you decide to live in, and your chosen lifestyle. Asuncion is 60% less expensive than Milan and 75% less expensive than New York.
The cost of renting a one-bedroom apartment starts from $300 and up.
Read more about the cost of living in Paraguay here: https://reframed.it/en/living-in-paraguay-how-much-does-it-really-cost/
Paraguay
Taxation
Friendly tax system
Paraguay stands out with its tax benefits.
Paraguay applies a 10% income tax on anything you earn inside Paraguay and a 0% income tax on anything you earn outside the country. So your foreign pension or any foreign income will be free of tax in Paraguay.
Paraguay also has no wealth tax, no inheritance or estate tax, and no capital acquisitions tax.
The V.A.T. standard rate is 10%. A 5% reduced tax rate applies to the supply of certain goods and services.
Paraguay taxes corporate income on a territorial basis. Resident entities are subject to tax only on their income derived from Paraguay at a flat rate of 10%.
Financial Privacy
No CRS reporting on bank assets or other deposits.
Asuncion, Paraguay
Paraguayan Residency
Temporary Residency (2 years) + Permanent Residency (3 years)
When you first apply for residency in Paraguay, you will receive a 2-year temporary permit (Temporary Residency). Then, after those 2 years, you can apply for Permanent Residency.
After 3 years of Permanent Residency, individuals can apply for citizenship.
SUACE: Fast-Track Residency Path to Citizenship
The SUACE Program
The SUACE program in Paraguay offers a fast-track solution for obtaining permanent residency, bypassing Temporary Residency. It requires an individual to invest at least $70,000 spread over a 10-year period. The program allows participants to live and work in Paraguay.
Once an individual obtains the Cédula (ID card), they are permitted to travel visa-free to Mercosur countries, including Brazil, Argentina, and Uruguay.
After 3 years of Permanent Residency, individuals can demonstrate a bond with Paraguay and apply for citizenship.
Process within the 3-year period of permanent residency
1. First visit: Residency and SUACE application;
2. Second visit: Residency card and Cédula (ID card) issued usually in 50 days.
So… Why Paraguay?
- The most attractive tax system in South America;
- Permanent residency option with minimal requirements (physical presence);
- Lower cost of living than in Europe and North America;
- Great hospitality: the atmosphere in Paraguay is very peaceful and the country is friendly and open to expats people;
- Delicious and diverse cuisine;
- Stunning and unique landscapes that will appeal to nature lovers and photo enthusiasts;
- An open and dynamic economy.
Weather
Paraguay has an agreeable climate with not too many extremes—summer from October through March, and winter from May until August. The coldest month is July, with average temperatures of about 17°C , while January, the warmest month, sees temperatures typically close to 30°C.
Asunción presents a great climate because of its position in the region. It enjoys a Tropical Savannah Climate, which makes its temperatures stand between a cozy 18 C°, and 25 C°.
Summer going from late November to late March, this is the warmest station of the year. Temperatures and humidity tend to be high, and precipitations peak during this period.
Iguazu
Nature
Because of its biodiversity, Paraguay is an appealing destination for ecotourism.
13000 species of plants have been recorded in Paraguay, including many threatened species. Deforestation represents a significant threat to the biodiversity of Paraguay. The lapacho rosado is the national tree of Paraguay. 13000 species of animals have been recorded in Paraguay, including many threatened species. It is also a popular destination for birdwatching.
View of a residential neighborhood at Asuncion, Paraguay.
Asuncion
The city is known as the “Mother of Cities,” as it is one of the oldest in South American. As with many large cities in region, Asuncion has a bit of a unique and tumultuous past. The city is also quite young, over 65% of the population is under 30, leading to new sets of skills being developed and an eye on the future.
Situated along the bank of the Paraguay River, the city can be quite scenic. You will find parks with lush foliage and trees along the roadside. The small but rolling hills in the area offer nice views of the city.
Services provided
If you are interested in Paraguay, feel free to contact us!
We can provide several services thanks to our Relocation Concierge approach, including:
- Company incorporation;
- Corporate bank account;
- Business plan & legal processing;
- Permanent residency & Cédula (ID card);
- On-site bureaucratic assistance;
- Paraguayan driver’s license;
- Utility bill;
- Rental agreement;
- Tax residence certificate;
- Citizenship application.
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