Paraguay residence: One of the most accessible and convenient countries for obtaining a second residency. Its favorable tax system and straightforward residency process make it attractive not only for individuals but also for some businesses.
Types of Residence programs in Paraguay
Paraguay offers two main residency options:
- Temporary Residency: Valid for 2 years, with the possibility of renewal and conversion into permanent residency.
- Permanent Residency: Grants indefinite residency with a requirement to renew every 10 years.
Both options provide the same rights, with the key differences being their validity periods and specific requirements. Currently, the easiest and most cost-effective approach is to start with temporary residency and later convert it to permanent residency.
Temporary Residence in Paraguay
Temporary residency is accessible to anyone without ongoing criminal charges. It is a popular choice as it doesn’t require investments or proof of income. The process consists of three main stages:
- Document Preparation: Before arriving in Paraguay, applicants must prepare required documents (e.g., background check, birth certificate, valid passport) and have them apostilled.
- Application in Paraguay: Upon arrival, applicants visit various offices (Police, Interpol, IT Department, Ministry of Foreign Affairs, Department of Migrations) to obtain the carnet de radicación temporal (residency card), which typically takes 1-2 months to be issued with our service. In case you decide to go through the process on your own you should expect approx. 3-5 months to obtain residence card.
- Obtaining the ID Card (Cédula): After receiving the residency card, applicants apply for the cédula at the Paraguayan Police Identification Department. With our service it takes approx. another 2 months to obtain the document.
Once these steps are completed, temporary residents enjoy all residency benefits, including opening a bank account, establishing a business, purchasing property, and gaining access to Paraguay’s tax system (if desired).
Permanent Residence in Paraguay
Permanent residency allows indefinite residence in Paraguay with a renewal every 10 years. There are two main pathways:
- Conversion from Temporary Residency: After 21 months of temporary residency, you can convert it to permanent residency by providing proof of economic activity.
- Residency by Investment: Alternatively, permanent residency can be obtained by investing at least $70,000 in Paraguay. Applicants must present a business plan and show a bank account with over $70,000, and then they have six months to execute the investment. This route is open to citizens from any country and offers benefits like quicker processing of residency and ID cards and a faster path to citizenship after 3 years of permanent residency.
Minimum Stay Requirements in Paraguay
One of the most attractive features of Paraguay’s residency program is its minimal stay requirement. To maintain residency, the only requirements are:
- For temporary residency, avoid being absent from the country for 365 consecutive days.
- For permanent residency, avoid being absent for 3 consecutive years.
Applicants can either briefly enter Paraguay before the deadline. Failing to meet these requirements may result in losing residency status.
Benefits of Residence in Paraguay
Paraguay’s residency program offers several advantages, particularly for individuals seeking a favorable tax environment and a growing economy. Key benefits include:
- No Physical Presence Requirement: Residents are not required to live in Paraguay to maintain their residency.
- Foreign Income Exemption: No tax on income earned abroad.
- Low Capital Gains Tax: 8%, with no tax on crypto profits and capital gains earned abroad.
- Low Corporate Tax: 10% on net profits or 3% on revenue for small businesses incorporated in Paraguay.
- Banking Secrecy: Ensures privacy in financial matters.
- Low Costs: The residency process is one of the most affordable in the world.
- Entrepreneur-Friendly Environment: Favorable laws for businesses, especially those bringing in foreign capital.
- Stable Currency: The Paraguayan Guaraní has been Latin America’s most stable currency, with an average inflation rate below 3% over the past 5 decades.
- Low Labor and Energy Costs: Ideal for setting up manufacturing businesses.
Ideal for Nomads and as a PLAN B
For digital nomads, Paraguay’s residency program is particularly appealing. You can legally shift your residence to Paraguay, travel the world, and still retain formal residency, taking advantage of Paraguay’s low taxes.
In the case of PLAN B it is great to have a “safe haven” in another country in case something goes wrong in your home country. The requirements to maintain residency are very low, which makes Paraguay very attractive for this plan. Plan B is more and more important these days and it is a great idea to execute it while you still can.
You can read more about PLAN B in this article.
Paraguay’s residency program offers a straightforward and highly beneficial path for individuals looking to establish a second residence. Whether you’re seeking a temporary base or long-term relocation, Paraguay’s favorable tax system, stable economy, and flexible residency options make it an attractive choice.
Having helped many clients from around the world, we aim to provide a detailed overview of the options available for residency in Paraguay. If you need personalized assistance, feel free to contact us for a one-on-one consultation.