Looking for more information about Paraguay residency? You’re in the right place! This guide covers everything you need to know about obtaining Paraguay residency, including requirements, benefits, and the application process.
When thinking about moving abroad, Paraguay might not be the first country to come to mind, but it’s becoming more popular for those looking for an affordable, low-tax residency option.
The process to get permanent residency in Paraguay is pretty straightforward compared to other countries, and the benefits make it a smart choice for online entrepreneurs wanting to lower their tax bill.
There are different benefits, from the great tax advantages to a quiet lifestyle, and even a second passport if you’re willing to invest in the country.
Paraguay Residency – Overview
This is a complete guide to all the residency programs, but before going through all the options and the details that go with them, here is an overview of Paraguay residency.
Types of Residency Programs in Paraguay
Paraguay offers several ways to obtain residency depending on your goals, preferences, and abilities. The main types of residency programs are:
- Temporary Residency: This is the most common option for expats, giving you the right to live and work in Paraguay without constantly renewing your status.
- Permanent Residency: After two years of Temporary Residency, you can apply for Permanent Residency. This Permanent Residency is valid for ten years.
- Residency by Investment: If you have some capital to invest, you can fast-track your way to residency through investments in businesses, real estate, or government bonds.
Which Residency Should You Apply For?
Most of our clients and students secure their temporary residency first, as it is the easiest one to obtain. After two years, they can then secure permanent residency.
However, if you want to jump the queue and have some savings to invest in the country, then Paraguay offers one of the world’s cheapest and easiest paths to direct permanent residency.
To qualify, you must establish a company in Paraguay with a nominal minimum capital of USD $70,000. You will need to submit a business plan within 90 days of receiving your permanent residency, and you need to actually form the Paraguayan company and put USD $70,000 into the company.
Differences Between Permanent and Temporary Residency
Temporary Paraguay residency is only valid for two years, whereas permanent residency is valid for 10 years. After 3 years of permanent residence, you could apply for Paraguayan nationality with proof of economic activity and proof of property ownership.
If you aren’t looking to secure citizenship in Paraguay but instead simply want to secure a second residency in a territorial tax country, then the Temporary Residency will be enough to satisfy this need.
Who Can Apply for Temporary Residency?
The good news is that almost anyone can apply for temporary residency in Paraguay. Whether you’re an individual, a retiree, or a business owner, the requirements are not too restrictive.
Unlike other tax-friendly countries that sometimes require a minimum income requirement, there is no need to hit a certain income threshold or have certain professional special skills.
Temporary Residency in Paraguay
First of all, let’s talk about tax residency. One of the main reasons people choose Paraguay for residency is its tax system. Paraguay operates on a territorial tax system, which means you’re only taxed on income generated within Paraguay.
If you make your money elsewhere, you won’t have to pay any tax to Paraguay.
Tax Residence
An individual is deemed to be a tax resident in Paraguay if one spends more than 120 days in the country in a year. But at Wanderers Wealth, once we secure your temporary residency, we can then also apply to get you a tax ID number and you can start filing tax forms as a resident.
This is similar to some other countries’ tax residency rules, but the key difference is the territorial tax system, which makes it much more appealing if you earn an income from a country outside of Paraguay.
Documents Needed
When applying for temporary residency in Paraguay, you’ll need to present several key documents. These include an apostilled birth certificate, an apostilled criminal certificate, and a marriage certificate (if applicable).
No need to submit any bank statements, employment contracts, or past tax documents.
Application Process
The application process requires, since October 2024, two different visits to Paraguay. During the first visit, you apply for your temporary residency. After 45 days, you have to return to Paraguay for your second visit to apply for your ID Card.
It takes about 90 days from your first visit until you’re issued your temporary residency.
Keep in mind that once your temporary residency is issued, you need to come to Paraguay within 12 months.
Residency by Investment in Paraguay
For those with capital to spare, residency by investment is a faster route to securing your permanent residency in Paraguay.
If that’s your case, then read below, as it’s an easy way to get Paraguay residency.
Types of Investment Options
The most common option to secure Permanent Residency in Paraguay is by investing USD $70,000 into a business in Paraguay.
You will need to submit a business proposal for this new company and make the bank transfer of USD $70,000. However, it’s also possible to invest the money into a property and rent it out.
Minimum Investment Requirements
The investment threshold is relatively low compared to other countries. Typically, you’ll need to invest USD $70,000 under the SUACE program.
Documents Needed and Application
There are different documents required to apply to the residency program in Paraguay by Investment, which are:
- Proof of investment (business registration, property deed, or bond purchase receipt)
- Bank statements showing the funds for your investment
- A valid passport
- Clean criminal background check
There are legal and administrative fees that vary but are generally affordable, especially when compared to other countries offering residency by investment programs.
Permanent Residency in Paraguay
If you don’t want to go the investment route, you can still obtain permanent residency in Paraguay with a relatively straightforward process.
Requirements
Before your temporary residency expires, you can apply for your permanent residency.
However, you need to ensure that during the two years between getting your temporary residency and getting your permanent residency, you are not out of the country for more than 12 months at a time.
This means that if you don’t intend to live in Paraguay, you will have to visit Paraguay at least once during those two years.
Documents Needed and Application Process
To convert your temporary residency into a permanent residency, you don’t need any apostilled documents from your home country.
Instead, you’ll be using your Paraguayan ID and a Paraguayan Police Record. These just need to be legalized in Paraguay, and do not need to be Apostilled by any other country.
You will need to visit Paraguay for the Permanent Residency application and go to the government office to get your fingerprints taken, sign some documents, and get your photograph.
Fees for processing your application are reasonable, and you may want to hire a consultant to make sure everything goes smoothly.
Benefits of a Paraguay Permanent Residency
Living in Paraguay has many advantages beyond the lower cost of living. Once you have residency, you are free to live and work in the country with no restrictions.
Paraguay has a territorial tax system, so you will only pay taxes on income generated in the country, which can be a big saving if you’re a digital nomad.
As a resident, you also have access to the public health system and you can enroll your kids in local schools. If you are planning to stay long-term, there is a clear path to citizenship as you will be eligible to apply after three years of permanent residency.
Tax Residency in Paraguay
If you decide to get a tax ID number in Paraguay, then it is mandatory for all individuals with such a tax ID number to file tax returns.
Unlike other countries, where you need to meet a minimum stay requirement to get your tax ID number, in Paraguay, there is no such minimum stay requirement.
Once you have obtained your new tax ID number, you must file monthly tax returns. Only if you’re filing monthly returns is it possible to also obtain a tax residency certificate.
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How to Maintain Your Residency in Paraguay
The good thing about your residency in Paraguay is that there is almost no stay requirement. This means that you are free to visit other countries and spend the majority of your time elsewhere.
But remember, if you have a temporary residency, then you must return to Paraguay within 12 months of your residency having been issued.
If you’ve secured your 10-year permanent residency in Paraguay, then it is recommended to visit once every three years to keep your residency status active.
Path to Citizenship in Paraguay
After living in Paraguay for three years as a permanent resident, you can apply for citizenship. You’ll need to demonstrate basic proficiency in Spanish and knowledge of Paraguayan culture and history, in addition to economic activity and proof of property ownership.
Paraguay allows dual citizenship, so you don’t have to give up your original nationality. However, some countries may require you to renounce your Paraguayan citizenship, so it’s worth checking the rules of your home country.
Conclusion – Paraguay Residency
Paraguay’s residency options are an easy and cheap way to live and work in a territorial tax country. Whether you want a second home, a base for your international business, or a path to citizenship, Paraguay has it all.
The requirements are relatively simple and the process is easy, and that’s worth considering if you want a new home.
Be sure to get in touch with us if you would like to explore the idea of getting set up in Paraguay!
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NOTICE: The content of this article is not to be considered as a legal opinion or tax advice. Wanderers Wealth does not hold itself out as a legal or tax advisor. If you want to receive a legal opinion or tax advice on the matter in this article please contact us directly and we will refer you to a legal practitioner.
