Paraguay Residency

Paraguay is a country with low bureaucratic efficiency and high corruption.

We have heard reports of people trying to do the process on their own and waiting for more than a year to get the residence permit.

On the other hand, the fact that the residence permit is so simple and has such low requirements has attracted many foreigners with money who want a paper residence permit for compliance reasons. Because of this, most emigration companies have increased their prices - it's perfectly normal to see offers for $4,000 to $5,000.

denationalize.me offers you the best of both worlds. We and our partners offer you a fair price that is well below the market average.

In addition, we have internal contacts and will guide you through the process to ensure the speed and success of your application.

Two short visits or one longer stay of around 50 days are required for the initial application. The first visit is to apply for the temporary residence permit and the second to apply for the Cedula (identity card).

We need 2 weeks in advance between the application and your travel date to Asunción to prepare documents and arrange appointments.

You will then travel to Asunción where the application will be finalized within 1-3 working days.

Once the application is completed in Asunción, the temporary residence permit will be ready in a maximum of 3-4 months or in about 50 days with fast-track procedures.

After that, the 2nd application for the Cedula begins. This is also completed in 1-3 working days, but it takes about a month until the Cedula is issued and can be sent to you.

You can then use the cédula to apply for a driver's license. And 5 days after receiving the Cédula you can apply for the RUC (tax number). The RUC will be issued on the same day.
Once you have received your RUC, you can apply for a tax certificate of residence. For this you must be present in person in Paraguay.
As already mentioned, it is possible to reduce the process for the residence permit to around 45-50 days for a fee of €300. After that, you can apply for the cedula, which will be ready in about a month. Thus, the entire process of the residence permit and cedula is reduced from 5 months to 3 months.

No. After 2 years, you can apply for a permanent residence permit. To be precise, from three months before your temporary residence permit expires, you can return to Paraguay and apply for permanent residency. This application costs €2000.

Once you have obtained permanent residency, you only need to be in the country once every 3 years and renew the document after 10 years. So, really minimal requirements!

Obtaining a Paraguayan residence permit offers several advantages, even if you remain in your country of residence:

• The calculation of time for a permanent residence permit and future citizenship by naturalization in Paraguay already starts with the issuance of the temporary residence permit.
• Allows the opening of accounts in Paraguayan banks and cooperatives
• Facilitates investment, study and business in Paraguay
• With the temporary residence permit, you can obtain a Paraguayan tax identification number to open accounts with banks, brokers and international stock exchanges. This has two advantages:
  • Brokers exchange information with the reported country of tax residence. Paraguay does not exchange banking information with other countries, which increases your financial privacy.
  • Some banks and financial platforms restrict the use of their platforms to residents of some countries. By verifying your account as a Paraguayan resident, you can access such platforms.
• Allows you to get a Paraguayan driver's license to drive in other countries
• If at some point you decide to move to Paraguay, you will already have all the documents in hand.

It depends. If you have a Paraguayan residence permit but live in your country of origin all year round, you are of course still a tax resident in your country of origin and must pay the corresponding taxes.

But if you:

• Obtain a Paraguayan residence permit,
• Give up your tax residence in your country of origin,
• subsequently become a perpetual traveler or emigrate to a tax haven,

it is quite possible to live tax-free without having to live in Paraguay.

No. You only become a tax resident in Paraguay if you stay there for more than 120 days per year. In any case, Paraguay is a country with territorial taxation, i.e. income from abroad is not taxed.

As long as you have no income from Paraguay (e.g. rent in Paraguay, salary or dividends from a Paraguayan company), you do not have to pay taxes in Paraguay.

Just having a residence and a cédula does not mean that you need to file declarations in Paraguay.

Paraguay has territorial taxation. You do not need to file or declare income tax on capital assets (real estate, shares, participations, funds.. etc) that generated capital gains abroad (outside of Paraguay). 

If you obtain residence, cédula and RUC in Paraguay, you need to file a monthly VAT return. However, you can apply for the RUC to have a tax identification number and then freeze it indefinitely. It's an easy process.

With the RUC frozen, you no longer need to file a VAT return, but you can also no longer present the RUC for invoices. VAT declarations are then suspended, but not income tax if you have taxable income over the exemption threshold.

If you are providing services as a self-employed professional abroad, you will need to inform the Paraguayan bank of the origin of the money. If the service is remotely provided to companies abroad, you do not pay VAT or income tax, but you still need to submit an invoice and submit the VAT form monthly. 

Better to use an offshore company and receive that money as a dividend 😉

The summary is: As long as you do not invoice through the Paraguayan financial system, stay under the taxable threshold for local income and freeze your RUC, you do not have to file declarations in Paraguay.

However, you can voluntarily declare part of your income by bringing it to local banks. Some financial institutions may ask for income tax returns, so having one can be useful, even if only with 0 tax.

For local income, there is an income tax exemption of 80,000,000 PYG  per year (approx. 11,000 USD). Up to this amount, no tax is declared.

For income tax, if you pass the 80 million PYG exemption in one year, you have to file returns below the exemption limit for 2 years to no longer have the obligation to declare.

After 2 years you can apply for a permanent residence permit. In addition to the Paraguayan documents for temporary residence and the cédula, you must either have applied for a RUC or have a university diploma or a professional certificate. Applying for a permanent residence permit costs €2000.

Yes, the step-by-step is as follows:

1. Temporary Residency and Cédula: This service covers your first step in Paraguay: the temporary residency and the cédula, the equivalent to the identity card. With the cédula, you can open bank accounts, obtain a driver's license, or a tax identification number.
2. Permanent Residency. Starting 3 months before you reach 2 years of temporary residency, if you want to keep your residency in Paraguay, you must return to Asunción to make the conversion from temporary to permanent residency.

Citizenship and Passport. After 3 years of permanent residency, you can apply for Paraguayan citizenship. As a Paraguayan citizen, you can obtain a Paraguayan passport.