Paraguay Residency: The Ultimate Guide from Locals Who’ve Done It

Introduction

When I first arrived in Paraguay, I was drawn to its opportunities, friendly people, and strong economy. But what really caught my attention was how straightforward and beneficial the Paraguay residency process was—especially compared to other countries.

Over the years, we’ve helped many expats and entrepreneurs secure their residency in Paraguay, and the process can be done in as little as few months time.

If you’re looking for a low-tax, flexible residency option, Paraguay should be at the top of your list. Not only do you gain a speedy residency card, but you also open the door to citizenship in just three years—all without any major investment requirements.

And the best part? Paraguay no longer requires a $5,000 bank deposit, making the process even more accessible.

In this guide, I’ll walk you through everything you need to know about getting residency in Paraguay—from the required documents to the tax benefits and the new streamlined process.

Why Paraguay Residency?

I’ve lived in Paraguay for the past two years… long enough to see why so many nomads and entrepreneurs choose to establish their residency in this small but stunning country.

Whether you’re a digital nomad, an entrepreneur, or simply looking for a second residency as a Plan B, here’s why Paraguay stands out for many.

Live Freely & Affordably

Paraguay offers a low cost of living compared to North America and Europe. Housing, groceries, and services are significantly cheaper than most Western countries, making it an ideal place for those looking to make their income last long while maintaining a high quality of life in a new country

Fast Residency Process

Unlike many other countries, Paraguay doesn’t require you to buy property, start a business, or invest large sums of money to obtain residency in the country.

The process is now faster and easier than ever, with approvals typically within 3-5 months, and only a small number of documents needed to get the process started. And the best part is that you don’t even need to live in Paraguay to maintain your residency or tax residency.

Low-Tax & Business-Friendly Environment

Paraguay operates under a territorial tax system, meaning that only Paraguay-earned income is taxed. This makes it an attractive option for:
✔ Digital nomads earning income online.
✔ Entrepreneurs with international businesses.
✔ Investors looking to diversify their tax residency.

Not only this, but Paraguay also has no wealth tax, no inheritance tax, and no worldwide income tax, allowing you to legally minimize your tax burden.

Path to Paraguayan Citizenship & Passport

One of the biggest advantages of residency in Paraguay is that it can lead to qualifying for citizenship in just three years.

Unlike many other countries that require 10+ years of residency before applying for naturalization, Paraguay has a faster track to citizenship via naturalization… but you want to ensure you are planning to live in Paraguay full-time before starting your residency process planning to gain citizenship, as the citizenship process isn’t always easy.

Visa-Free Travel to Paraguay

Citizens of most countries, including the U.S., Canada, UK, EU, and Australia, can enter Paraguay visa-free.

This makes the process of applying for residency hassle-free with no tourist visas needed prior to your arrival on the ground.

Paraguay’s Tax Benefits: How You Can Legally Reduce Your Taxes?

Living in Paraguay has given me a firsthand experience of its favorable tax and business environment. Here are some of the key points for how establishing Paraguay residency here can help you minimize your tax obligations:

Territorial Tax System

Paraguay operates on a territorial tax system, meaning only income generated within Paraguay is subject to tax.

Foreign-sourced income, such as earnings from overseas investments or remote work, is not taxed. This structure is particularly advantageous for digital nomads, freelancers, and international entrepreneurs.

With this structure, we recommend setting up a business and bank accounts elsewhere in the world, as Paraguay isn’t quite as beneficial for company formations and banking. You want to ensure you have your assets diversified across many jurisdictions as a global citizen, not just Paraguay.

No Capital Gains or Wealth Taxes

Paraguay offers an attractive no capital gains tax on profits from the sale of assets, nor are there wealth taxes on any of your global assets if held in the proper jurisdiction.

Low VAT and Corporate Taxes

The Value Added Tax (VAT) in Paraguay is a flat 10%, which is quite a bit lower than in many other countries.

Not only this, but the corporate income tax rate is also 10%, making it an attractive destination for businesses seeking a tax-efficient base of operations. Not to mention that the Paraguayan government is open to business and foreign investment coming into the jurisdiction.

Double Taxation Agreements

While Paraguay currently has some double tax agreements, this is not a key selling point of the country. Paraguay offers limited DTA agreements, so you want to ensure you have proper tax planning set up before your tax residency is obtained.

The Old vs. New Residency Process

Having assisted numerous clients through the residency process over the years, we’ve seen various changes in the Paraguay residency process, which typically occur every few years. Below is one of the latest residency updates.

The Old Residency Process

Previously, obtaining permanent residency in Paraguay required applicants to make a deposit of approximately $5,000 USD in a Paraguayan bank. Not only this, but the residency process was quite a bit longer than it currently stands, at only a few months.

The New Residency Process

The Paraguayan government has reformed its immigration policies to make residency more accessible. Since the end of 2024, there is no longer a need for the $5,000 USD bank deposit.

However, you now need to hold temporary residency for two years, after which you can apply for permanent residency on your next trip into the country.

Required Documents for Temporary Residency

Below are the current required documents you will need to start your residency process in Paraguay. Be aware these documents can always change based on any new updates to the residency process from the government.

• Valid Passport: Up-to-date and has sufficient validity.
• Birth Certificate: An apostilled copy from your country of birth.
• Police Clearance Certificate: An apostilled certificate from your country of residence or place of birth.

Note that you may also need marriage, death, or widow certificates, all with apostilles, if applicable to your case.

You will also need all the documents translated into Spanish in Paraguay, which our team handles for you as part of the residency process.

Step-by-Step Process to Get Paraguay Residency

Since we live in Paraguay and have gone through this process ourselves—both personally and with our clients—we know exactly what it takes to get residency in Paraguay the right way (the fastest way)!

While the process has been simplified in recent years, there are still important steps to follow to make sure your residency process goes smoothly. Here’s exactly how to do it:

Gather Your Documents

Before arriving in Paraguay, you’ll need to prepare and apostille several key documents. These must be translated into Spanish and apostilled for use in Paraguay.

Required Documents for Temporary Residency:
✅ Valid Passport – Your passport must be valid for at least six months.
✅ Birth Certificate – Apostilled from your country of birth.
✅ Police Clearance Certificate – An apostilled certificate from your country of residence or place of birth.

We assist with document translation, legalization, power of attorney. and ensuring that everything is prepared correctly before your residency submission. This is one of the most important parts of the process, as if the documentation is incorrect for the process, we cannot proceed with the residency process in Paraguay.

Submit Your Residency Application

Once you arrive in Paraguay, we take you to submit all documentation. We handle the entire process, and your physical presence is only required for about 2-3 hours.

✔️ Visiting the Immigration Office in Asunción – All paperwork is submitted here.
✔️ Fingerprinting & Biometrics – As part of your application, you’ll need to complete biometrics at the immigration office and Interpol.
✔️ Document Verification – Immigration officers review your documents and ensure they meet Paraguay’s legal requirements before submitting them for residency.

Receive Your Residency Card

Once approved, you’ll receive your temporary residency card (valid for two years). This allows you to live, work, and open bank accounts in Paraguay.

After two years time, you can apply for permanent residency, which is valid for ten years in Paraguay and requires a short stay requirement every three years to remain valid.

Get Your Paraguayan Cedula (National ID Card)

The cedula is Paraguay’s national ID card, and while it’s not required for residency, we highly recommend getting one.

The cedula makes life in Paraguay much easier—you’ll need it to open bank accounts, sign contracts, and prove your residency status. We help all our clients obtain their cedula as part of the process once the residency is completed.

Paraguay Residency & The Path to Citizenship

One of the biggest advantages of securing residency in Paraguay is that it opens the door to citizenship and a second passport.

Unlike other countries that require 10 years of residency before you can apply for naturalization, Paraguay has one of the fastest paths to citizenship… although this process is not straightforward.

How Long Until You Can Apply for Citizenship?

After holding permanent residency for just three years, you can qualify for Paraguayan citizenship. However be aware that just because you qualify for citizenship, does not mean that it will be granted within coming years.

The citizenship process in Paraguay takes time, patience, and a good attorney.

Requirements for Citizenship

To apply for Paraguayan citizenship, you must:
✅ Hold permanent residency for at least three years.
✅ Show ties to Paraguay (such as work, investments, or local activity).
✅ Pass a basic Spanish language and history exam (we can guide you through this).
✅ Maintain a clean criminal record.

Once approved, you’ll receive your citizenship certificate, followed by a Paraguayan passport—giving you access to one of the world’s best residency-to-citizenship programs.

Final Thoughts: Why Paraguay Residency is the Best Option

After living in Paraguay and helping countless clients secure residency, I believe it’s one of the best second residency options in the world.

Paraguay residency requires no major investment, offers a low tax environment with a pro-business and investment government, has an affordable cost of living, and is a free, liberal country that is friendly to foreigners.

Whether you’re looking for a Plan B residency, a tax-friendly jurisdiction, or a pathway to a second passport, Paraguay residency is one of the smartest moves you can make in Latin America.

Ready to Start Your Paraguay Residency Process?

We’re here to guide you every step of the way. From document preparation to handling your residency application in Paraguay, our team makes the process simple and stress-free.

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