# Paraguay

 Country code: PY · Currency: PYG · Language: Guaraní

**Pros**
- Low tax burden with a simple 10% flat rate for corporate and personal income.
- Territorial taxation system exempting foreign-sourced income from domestic levies for residents.
- Abundant and affordable hydroelectric power reducing operational costs for industrial activities.

**Cons**
- Systemic institutional corruption and weak judicial independence affecting contract enforcement and property rights.
- Underdeveloped physical infrastructure and logistical bottlenecks increasing transportation costs for landlocked trade.
- Significant informal economy and security risks in border regions linked to illicit activities.

Long story short: In Paraguay, the state pretty much leaves you alone: tax rates that barely sting, a company set up in a few days, and zero interest in what you earn abroad.

The catch: customs officers and judges expect their cut without any shame, and the banking system, solid as it is, gets stingy the moment you ask for credit.

Beyond that: the nice neighborhoods of Asuncion stay calm, the grilled beef is excellent, the scenery stays flat, but the farming potential is massive.

## Will your income be taxed?

Long story short: YES, BUT LIGHTLY.
Income tax in **Paraguay** is already light (**10%** at the top), and the *territorial* regime shrinks the net further: foreign-source income doesn't even enter it.

Friendly sticker, friendlier machinery.

**01.1 Income tax**

| Metric | Value | Detail |
| --- | --- | --- |
| Personal income tax | 8 → 10% | progressive · 3 brackets |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 8,350 | 8% |
| 8,350 – 25,050 | 9% |
| 25,050 + | 10% |

**01.2 Tax residence test**

_A single active rule is enough to make you tax-resident._

| Metric | Value | Detail |
| --- | --- | --- |
| 183-day rule | does not exist here |  |
| Economic interest | does not exist here |  |
| Family centre | does not exist here |  |
| Habitual abode | does not exist here |  |
| Extended-stay test | exists here |  |

## Will your wealth be taxed?

Long story short: YES, BUT LIGHTLY.
**Paraguay** takes a light trim on capital gains (**8%** at the top), with no annual wealth levy and no inheritance regime.

Your portfolio compounds with barely any friction; the state only shows its face when you sell. And even then, politely.

**02.1 Investment income**

| Metric | Value | Detail |
| --- | --- | --- |
| Capital gains | 8% | flat |
| Dividend tax | 8% | flat |
| Interest income | 8% | flat |

**02.2 Wealth & estate**

| Metric | Value | Detail |
| --- | --- | --- |
| Wealth tax | NONE | no annual wealth tax · no real-estate wealth tax · no net-worth assessment |
| Inheritance system | NONE | no estate tax · no heir-based duties · no succession tax framework. Wealth transfers across heir-classes are not taxed in this jurisdiction. Only standard probate / registration fees may apply. |

**02.3 Crypto**

| Metric | Value | Detail |
| --- | --- | --- |
| Crypto · tax regime | UNREGULATED | Fallback rate: 8% · Paraguay lacks specific crypto legislation after the 2022 presidential veto of a regulatory bill. Crypto-assets are treated as intangible property under general tax law (Law 6380/19). Individuals are taxed at 8% on capital gains (IRP-RGC). Professional traders and miners are taxed at 10% (IRE). A small exemption applies if total annual sales of movable assets are under 20 million PYG (approx. USD 2,700). Sources: Law 6380/19, Decree 3181/19, BCP Statement 2022. |
| Crypto-to-crypto | TAXABLE | each swap counts as a disposal — gains realised at every trade |
| FATF travel rule | NOT SIGNED | no information-sharing obligation on VASP transfers |

## Easy to run a company there?

Long story short: YES.
Corporate tax in **Paraguay** sits at a *low* **10%**, VAT included in the good mood. Setting up and running a company is cheap; whatever ends up killing your venture here, it won't be the tax bill.

**03.1 Rates**

| Metric | Value | Detail |
| --- | --- | --- |
| Corporate tax | 10% | flat |
| VAT standard rate | 10% | 2 distinct tiers in force |

| VAT family | Category | Rate |
| --- | --- | --- |
| Food & drink | food | 5% |
| Food & drink | non-alcoholic | 10% |
| Food & drink | alcohol | 10% |
| Print media | books | 10% |
| Print media | ebooks | 10% |
| Print media | newspapers | 10% |
| Culture | cultural events | 10% |
| Culture | cinema | 10% |
| Culture | theatre | 10% |
| Culture | museums | 10% |
| Culture | sports | 10% |
| Transport | public transit | 10% |
| Transport | rail | 10% |
| Transport | air | 10% |
| Hospitality | hotels | 10% |
| Hospitality | restaurants | 10% |
| Hospitality | takeaway | 10% |
| Health | pharma | 5% |
| Health | medical dev. | 10% |
| Energy | electricity | 10% |
| Energy | natural gas | 10% |
| Energy | district heat. | 10% |
| Energy | domestic fuel | 10% |
| Utilities | water | 10% |
| Utilities | waste | 10% |
| Clothing | kids clothing | 10% |
| Digital & telecom | digital | 10% |
| Digital & telecom | telecom | 10% |
| Digital & telecom | broadcast | 10% |
| Construction | construction | 10% |
| Construction | social housing | 5% |
| Agriculture | farm inputs | 5% |
| Agriculture | animal feed | 5% |
| Personal services | funeral | 10% |
| Personal services | hairdressing | 10% |
| Finance | insurance | 10% |
| Finance | financial svc. | 10% |

**03.2 Regime & registry**

| Metric | Value | Detail |
| --- | --- | --- |
| IP Box · Patent Box | NONE | no IP regime · IP income taxed under standard corporate rules |
| Misuse of corporate assets | NO CRIMINAL | no criminal liability · In Paraguay, the closest equivalent to misuse of corporate assets is 'Breach of Trust' (Lesión de Confianza) under Article 192 of the Penal Code (Ley 1160/97). This crime requires the violation of a duty to protect the property interests of a 'third party' (tercero). In a solvent company where the director is the sole shareholder, the owner's consent negates the criminal nature of the act as there is no third-party victim. Such conduct is treated as a civil matter (confusion of patrimony) or a tax issue (irregular dividend distribution) rather than a criminal offense. |
| Shareholders privacy | PUBLIC | Dirección General de Personas y Estructuras Jurídicas y Beneficiarios Finales (DGPEJBF) |
| Directors privacy | PUBLIC | Dirección General de Personas y Estructuras Jurídicas y Beneficiarios Finales (DGPEJBF) |

**03.3 Incorporation cost**

_In this country, the most standard company form is called Empresa por Acciones Simplificadas (EAS) (Simplified Joint Stock Company). The costs below are for incorporating a company in its simplest form, for reference only._

| Metric | Value | Detail |
| --- | --- | --- |
| Government Registration & Registry Fees | USD 250 |  |
| Professional Incorporation Service (Legal, RUC, Rep) | USD 3,757 |  |
| Total | USD 4,008 |  |

## A good fit for a holding?

Long story short: YES, BUT THIN.
**Paraguay** runs a *full participation exemption* (**100%** on qualifying dividends and gains), but the treaty network is *skinny* (**6** agreements): in plenty of geographies your dividends get clipped at the source before they ever reach the holding.

Fine for a regional play, undersized for a global one.

**04.1 Substance & exemptions**

| Metric | Value | Detail |
| --- | --- | --- |
| Territorial · individuals | TERRITORIAL | territorial — foreign-source income generally untaxed |
| Territorial · corporates | WORLDWIDE | worldwide corporate taxation |
| Participation exemption | 100% | no minimum threshold · no holding period |
| CFC rules | NONE | no controlled foreign corporation regime · foreign-source corporate income out of scope |

**04.2 Withholding tax · non-resident**

| Metric | Value | Detail |
| --- | --- | --- |
| WHT · dividends | 15% | non-resident outbound |
| WHT · interest | 15% | non-resident outbound |
| WHT · royalties | 15% | non-resident outbound |
| Tax-haven WHT | 15% | penalty rate · blacklisted destinations |

**04.3 Treaty network**

| Metric | Value | Detail |
| --- | --- | --- |
| Treaties signed | 3 | active |
| Treaties pending | 3 | in negotiation |

## Easy to come and go?

Long story short: LITTLE.
Coming and going from **Paraguay** costs you nothing worth mentioning. *Territorial* regime (foreign income stays foreign), *no exit tax* at the door.

You show up with your stuff, you leave with your stuff, plus whatever you earned abroad in between. Borders the way they should all work.

**05.1 Exit & dual nationality**

| Metric | Value | Detail |
| --- | --- | --- |
| Exit tax | NONE | no triggers active · residence change tax-free · no deemed-disposal mechanism |
| Dual citizenship | ALLOWED | naturalised citizens may keep their existing nationality |

**05.2 Citizenship paths**

| Metric | Value | Detail |
| --- | --- | --- |
| Residence | 3 years | available path to naturalisation |
| Marriage | — | not available |
| Birth | jus soli | available path to naturalisation |
| Descent | 1 gen | available path to naturalisation |
| Investment | — | not available |

## Is your money watched?

Long story short: NO.
Foreign tax offices see next to nothing of what you do in **Paraguay**: it has signed *few exchange frameworks*.

But the *corporate registries are public*: your shareholdings and directorships are one search away for anyone curious. Invisible from abroad, on display at home.

**Multilateral reporting frameworks — 1/9 active · 2 pending**

| Item | Status | Detail |
| --- | --- | --- |
| CRS | None | — |
| CARF | None | — |
| FATCA | None | — |
| MLI | None | — |
| BEPS | Signed | — |
| MAAC | In force | 2021 |
| GLOBAL FORUM | Signed | — |
| EOIR | None | — |
| CRYPTO TRAVEL RULE | None | — |

## Is it blacklisted?

Long story short: NO.
**Paraguay** sits on no major blacklist, though it's *outside* the FATF club.

Some counterparties will run a bit of extra due diligence out of habit, but there's no formal stigma: you won't get hassled for dealing with it.

**Blacklist exposure — Clear everywhere**

| Item | Status | Detail |
| --- | --- | --- |
| EMBARGO | Clear | un / us / eu sanctions |
| FATF | Clear | grey / black list |
| EU | Clear | non-cooperative list |
| FRANCE | Clear | ETNC list |
| SPAIN | Clear | tax-haven list |
| PORTUGAL | Clear | favourable regimes |
| BRAZIL | Clear | low-tax list |

## Do you feel free there?

Long story short: PARTLY.
**Paraguay** sits in the *middle band* of the RSF press-freedom index (rank **\#84**): civil society functions, but the walls are real and you'll learn fast where they stand.

Crypto lives in the standard regulated tier.

**08.1 Press freedom**

| Metric | Value | Detail |
| --- | --- | --- |
| Press freedom · RSF index | 84/180 | score 56 · ↑ 31 ranks year-on-year |

Central bank digital currency

    Program Status Cross-border Sources     Paraguay CBDC

Central Bank of Paraguay

   RESEARCH   —   [announce →](https://www.bcp.gov.py/criptomonedas-privadas-y-monedas-digitales-n1643 "Announcement")

 programs 1

## Connected to the world?

Long story short: POORLY CONNECTED.
The two rails that matter are both dead in **Paraguay**. *Stripe* won't onboard you, so card payments mean a foreign structure or a local processor with its own rules. *Amazon* doesn't deliver either.

Some secondary services run (**4/11**), but for an online business this is swimming against the current.

**Accept payments — 2/6 available**

| Item | Status | Detail |
| --- | --- | --- |
| Stripe | Not available | card payments |
| PayPal | Available | wallet payments |
| Adyen | Not available | enterprise psp |
| Mollie | Not available | eu payments |
| GoCardless | Not available | direct debit |
| Paddle | Available | merchant of record |

**Bank and move money — 1/3 available**

| Item | Status | Detail |
| --- | --- | --- |
| Wise | Available | multi-currency |
| Revolut | Not available | personal banking |
| Revolut Business | Not available | business banking |

**Buy and sell on Amazon — 1/2 available**

| Item | Status | Detail |
| --- | --- | --- |
| Amazon | Not available | consumer delivery |
| Amazon Seller | Available | marketplace selling |

  SEE ALSO## Other jurisdictions worth comparing

Picked by similarity of strategic profile to Paraguay. No editorial ranking — neighbours in the same scoring space.

  PROFILE-ADJACENT Same shape, comparable overall friction.

 [   Kosovo XK  → ](https://stateless.sx/en/country/xk) [   Guatemala GT  → ](https://stateless.sx/en/country/gt) [   Albania AL  → ](https://stateless.sx/en/country/al)

  NOTABLY MORE FAVORABLE Same family of strategies, higher total score.

 [   United Arab Emirates AE  → ](https://stateless.sx/en/country/ae)

  NOTABLY LESS FAVORABLE Same family of strategies, lower total score.

 [   Albania AL  → ](https://stateless.sx/en/country/al) [   Costa Rica CR  → ](https://stateless.sx/en/country/cr) [   North Macedonia MK  → ](https://stateless.sx/en/country/mk)