Residency in Latin America
Optimizing residency and selecting the right one is getting more and more important these days. There are multiple reasons to do that and motivations to do that can be very different. One of the main motivations can be getting more freedom in your life. Especially if you are resident in Europe where every year it is getting more and more restricted.
Generally there are couple of options where you can have a residency but we are going to focus on probably the best option these days – Paraguay.
Why to think about changing to Paraguay residency? Let’s break it down, shall we?
- Paraguay is the simplest, cheapest and fastest process in the world to obtain residency. Even though with a new immigration law that has passed late 2022 it is still the best option from all countries (such as Panama, Uruguay or other countries (islands) in Caribbean (where normally an investment is required to be able to receive residency). None of that applies in case of Paraguay.
- Having residency normally comes with many responsibilities that you are forced to abide. That is not the case for Paraguay. Being a Paraguayn resident comes with zero bothering obligations. Of course you have to abide the law, but other than that there is nothing that you have to do (except entering the country once in a while). Paraguay gives you benefits of having second home or plan B (what ever you want to call it).
- Having a residency in Paraguay also does not enforce you to stay in the country. That means you have your residency in latin american country but not necessarily living there. The only obligation is to enter the territory once a year (in case of temporary residence) and once a three years (in case of permanent residence). That’s it.
- Paraguay has territorial taxation for physical persons. That means that there is not obligation to pay taxes from income outside of Paraguay. That also applies for capital gains (such as stocks, bonds, crypto or any other assets). The only taxes that have to be paid is from local Paraguay income (if you work there) and that is 10%.
- Paraguay also haven’t signed CRS ( Common Reporting Standard) that means Paraguay does NOT report any tax or financials of their residents to other countries. As of now, Paraguay is not even planning to sign CRS in the future.
- Setting up a bank account is easy when you are resident. When you receive your ID card ( called “cedula” in Paraguay) you can easily open bank account. There are bank accounts in guaranis (local currency), Euros or US dollars available. Paraguay is not on a blocklist so there is not problem to transact between Paraguay and other countries.
- With residency in Paraguay and with cancelling your European Union residency, you are not obliged to pay European social security insurance neither state healthcare insurance. You can become an individual with your own health care insurance provider and have a global health insurance (that is often times cheaper and you get fantastic quality of services).
- With Paraguay residency it opens the door to whole Latin America. With Paraguyan cedula you can easily travel within Mercosur (Argentina, Paraguay, Uruguay, Brasil) countries without passport. That means that with your passport from your native country you can stay indefinite time in your home country. Plus with your Paraguayn residency you have another home where you can stay indefinite time too. This gives you new options.
- If you decide to live in Paraguay (for example for me it is home during Europe winter) then you can benefit from your purchasing power in Paraguay. Everything is very cheap – rent, food, transportation. I am making a spending chart every time. So I can say that my average monthly cost in Paraguay is around $1400 for family of three. Including everything – renting an apartment, food, restaurants, mobile phone plan, transportation including Ubers, tickets to Zoo and other services. It is possible to live cheaper if you need. These $1400/month for a family makes it normal life. I would say no limitations on activities, travels, etc.
What to do in case you want to become Paraguay resident?
- You have to enter Paraguay physically.
- You need to go through the immigration process to become Temporary resident. With the new law that has passed in 2022 you have to become Temporary resident first (for 2 years) and after 2 years you can get permanent residency that is for 10 years.
- To start the process of immigration you need to have several appointments with state, such as police, immigration office, etc… When you are in the process of immigration and all documents are accepted you will receive “residencia precaria” that works for 90 days while you waiting to receive temporary residence. With that you already can travel in Mercosur and do some basic errands.
- When you receive a temporary residence card you can claim the ID card (called “cedula”). When you receive cedula you are able to do anything such as open a bank account, make a mobile phone provideer contract, renting a long term house, having a work contract (if you want), basically anything you are get used to do in your country of origin.
- This process can be done by anybody but you have to expect that normally it takes a lot of time to organize all by yourself. Friend of mine who lives physically in Paraguay and has done the process by himself still has not own ID card after 17months.
If you want to be sure that all goes smooth and you will relocate/receive residency without delays and unexpected issues you might want to read this article where I explain how it can be done faster (with one visit to Paraguay) and without the burden on your shoulders.
Feel free to reach out with questions.