Securing a second passport in Paraguay offers many benefits, including a favorable tax regime, low cost of living, and access to a stable, growing economy. However, the process involves gaining legal residency, meeting specific criteria over time, and in time, qualifying for citizenship. It is important to note that obtaining Paraguayan citizenship is not easy and requires a long-term commitment, and in this blog post, we will dive into the details of obtaining your second passport in Paraguay.

Step 1: Obtaining Residency

To start the journey toward Paraguayan citizenship, you must first obtain permanent residency. Paraguay offers a relatively straightforward residency process compared to many other countries. Foreign nationals can apply for permanent residency through the following pathways:

1. Documentation: You can obtain residency in Paraguay via two trips to the country and the proper documentation. No bank deposit or minimum investment amount is needed for option, which allows two years of temporary residency before transitioning over to permanent.
2. Investment: Foreign nationals can invest 70,000 USD in a business or property in Paraguay, and can gain immediate PR from this investment.

Once you have obtained permanent residency, you are required to live in Paraguay for three consecutive years, with minimal absences, before you can apply for citizenship.

The Benefits of Paraguayan Residency

Residency in Paraguay comes with several perks, particularly for those looking to optimize their tax situation. Paraguay operates on a territorial tax system, meaning residents only pay taxes on the income they earn within Paraguay. Income earned outside of the country, including investments, dividends, and salaries, is not subject to Paraguayan taxes.

This tax-friendly environment makes Paraguay an attractive option for digital nomads, business owners, and retirees looking for a second residency with minimal tax obligations.

Additionally, the cost of living in Paraguay is significantly lower than in North America or Europe, allowing residents to enjoy a comfortable lifestyle for much less.

Step 2: Applying for Paraguayan Citizenship

Once you have lived in Paraguay as a permanent resident for at least three years, you may become eligible to apply for citizenship. However, the process to obtain Paraguayan citizenship is not as simple as obtaining residency.

According to Article 148 of the Paraguayan Constitution, the requirements for naturalization are:

1. You must be of legal age (18 years or older).
2. You must have resided in Paraguay for at least three continuous years after receiving your permanent residency. These three years must be consecutive, and you can be absent from the country for no more than 90 days per year.
3. You must demonstrate good conduct, which includes passing a background check and being free of criminal records in Paraguay and your home country.
4. You must practice a recognized profession, trade, or industry that contributes to Paraguayan society. Simply living in Paraguay and paying taxes is not enough; you must prove that you have contributed to the local economy or community in some way.

In addition to these constitutional requirements, applicants must pass a citizenship exam that tests their knowledge of Paraguayan history, geography, national symbols, the Constitution, and government structure. The exam is written in Spanish, and applicants must score a minimum of 21 out of 30 points to pass.

Documents Required for Citizenship

When applying for citizenship, you will need to provide a comprehensive set of documents, including but not limited to:

• Proof of residency in Paraguay for at least three continuous years
• A clean criminal record from both Paraguay and your home country
• Proof of employment or economic activity in Paraguay
• Birth certificate and other identification documents
• Any additional documents requested by the Paraguayan Supreme Court

Since the citizenship process can be complex, it is highly recommended to hire a lawyer to assist you with the application and ensure that all documents are in order. Be cautious when selecting a lawyer, as some may charge exorbitant fees or make promises they cannot keep.

Challenges of the Citizenship Process

The process of obtaining Paraguayan citizenship can take anywhere from two to eight years, depending on various factors such as the thoroughness of the document review, the responsiveness of the Supreme Court, and whether any additional documents are requested.

The citizenship exam is another potential challenge. Applicants must study Paraguayan history, government, and geography in detail, and the exam is conducted in Spanish. Non-Spanish speakers may need to dedicate time to learning the language in order to pass the exam.

After passing the exam, the Supreme Court will conduct additional background checks and may request more documentation. The final step involves obtaining signatures from all nine judges on the Paraguayan Supreme Court. If even one judge refuses to sign, your application for citizenship will be denied.

However, once you successfully complete the process and obtain Paraguayan citizenship, you will be entitled to all the rights and privileges of a Paraguayan citizen, including the right to vote, hold public office, and travel freely within the Mercosur region.

Special Considerations for Dual Citizenship

One important factor to consider when applying for Paraguayan citizenship is that Paraguay recognizes dual citizenship under certain conditions. If you are a citizen of Spain or Italy, you can retain your original citizenship and hold Paraguayan citizenship at the same time.

However, for citizens of other countries, Paraguay does not officially recognize dual citizenship. While you may be allowed to retain your original citizenship, in Paraguay, you will only be recognized as a Paraguayan citizen.

The Importance of Hiring a Lawyer

Given the complexities of the citizenship process, it is highly advisable to hire a reputable lawyer to assist you. A lawyer will not only help you gather the necessary documentation but also navigate the legal intricacies of the Paraguayan system. Be cautious of lawyers who make unrealistic promises or charge exorbitant fees. The process is long, and there are no shortcuts to obtaining Paraguayan citizenship.

At Work, Wealth and Travel, we offer comprehensive services to guide you through every step of the process, from obtaining residency to applying for citizenship. Our experienced team of legal experts in Paraguay can help ensure a smooth and successful application process.

Conclusion

Obtaining a second passport in Paraguay is a lengthy but rewarding process. Paraguay offers one of the most favorable tax systems in the world, making it an ideal destination for those looking to minimize their tax liabilities.

While citizenship is difficult to obtain and requires a long-term commitment, the benefits of Paraguayan residency and eventual citizenship are well worth the effort for those seeking a second passport and a new life in this beautiful, tax-friendly country.