Destination · Paraguay
Paraguay: the hidden gem for entrepreneurs
A territorial tax system, a 10% business income tax with a separate tax on distributed profits, personal rates of up to 10% on local income, and a cost of living far below North America.
Overview
Why entrepreneurs look at Paraguay
As taxes rise and freedoms diminish in many countries, high-income entrepreneurs are seeking environments that better safeguard both their wealth and personal values. Paraguay is quickly emerging as a top choice with its low taxes, pro-business policies, and strong commitment to Christian values and personal freedoms.
One of Paraguay’s major draws is its territorial tax system, which only taxes income earned within its borders. For individuals, foreign-source income can fall outside Paraguayan personal income tax; the treatment depends on where the work is done and how the business is structured. A Paraguayan company follows different rules, and some of its income from abroad is taxed in Paraguay. With a personal income tax rate that can only go up to 10% on domestic income, it is a significant reduction compared to the burden many entrepreneurs face in Western countries.
The cost of living is exceptionally low. Paraguay is exposed to floods and droughts. Assess the location, water supply and property’s resilience as part of any long-term plan. Source Read the full article: Paraguay: the hidden gem for conservative entrepreneurs.
At a glance
Paraguay in six lines
| Tax system | Territorial: tax applies to Paraguayan-source income. Personal foreign-source income and company income follow different rules: a Paraguayan company is also taxed on certain income from abroad, such as returns on capital placed outside the country. |
|---|---|
| Rates on local income | Personal income tax of up to 10%. Business income tax (IRE) is 10% of net income, and profits paid out to the owners then bear a separate dividend tax (IDU) of 8% for residents or 15% for non-residents, so 10% is not the ceiling on the combined business and shareholder burden. Source: Law 6380/2019, articles 21, 43 and 69, as checked October 2026. |
| Residency routes | The ordinary route is temporary residence first, then permanent residence. Separate direct permanent-residence routes exist, including one for foreign investors under the SUACE regime. How residency works today. |
| Path to citizenship | Naturalization is possible after a period of permanent residence set by law, with further requirements. |
| Good fit for | Entrepreneurs with foreign income who value low costs, personal freedom and room for self-sufficiency. |
| Watch out for | Residency is no longer as effortless as it once was, and holding a permit is not the same as being a tax resident. |
General information, not legal or tax advice. Immigration and tax rules, amounts and processing times change; we confirm the current requirements for your specific case during your Global Strategy.
What Paraguay offers
Beyond the tax rate
Pro-business environment
A 10% business income tax, with dividends taxed separately when profits are paid out, minimal regulations and low operating costs.
Ideal for self-sufficiency
Vast fertile farmland. Paraguay is exposed to floods and droughts. Assess the location, water supply and property’s resilience as part of any long-term plan. Source
Easier permanent residency
The ordinary route starts with temporary residence and moves to permanent residence later. Investors who qualify under the SUACE regime can apply for permanent residence directly.
How residency worksDoes Paraguay tax foreign income?
Paraguay has a territorial tax system that taxes income earned within its borders. Foreign income can fit Paraguay’s territorial tax system; the treatment depends on where the work is done and how the business is structured. Personal foreign-source income and company income are treated differently: a Paraguayan company is also taxed on certain income from abroad.
How high are taxes on Paraguayan income?
Personal income tax can only go up to 10% on domestic income. Business income tax is 10% of net income, but it is not the whole bill for an owner: profits paid out as dividends bear a separate tax of 8% for residents or 15% for non-residents (as checked October 2026).
Is it easy to get residency in Paraguay?
Obtaining permanent residency is no longer as effortless as it once was, but the process remains simpler and faster than in most Latin American countries. See how it works today.
Will moving to Paraguay end my taxes at home?
For Canadians, becoming a Canadian tax non-resident can end Canadian taxation of worldwide income, while certain Canadian-source income remains taxable. See leaving Canada. US citizens remain taxable in the US wherever they live; see leaving the United States. We plan your exit and your new tax residency together.
Can I get a Paraguayan passport?
Naturalization is possible after the legal period of permanent residence and other requirements. We map the timeline for your case.
Journal
Reading on Paraguay and tax residency
Sep 23, 2024 · 3 min read
Paraguay: The Hidden Gem for Conservative Entrepreneurs
Paraguay is a top choice for conservative entrepreneurs, offering low taxes, personal freedom, Christian values, and pro-business policies.
Read article
Sep 23, 2024 · 2 min read
Millionaires Are Moving to Costa Rica–Here’s What They Know That You Don’t
As taxes rise in Canada, USA, and Europe, wealthy entrepreneurs are seeking better options. Costa Rica is a popular choice—here’s why.
Read articleYour next step
Considering Paraguay?
The Global Strategy checks the residency route that fits, plans your structure and makes sure your tax residency really moves with you.