Paraguay Residency Program: How it works in 2024

Paraguay stands out as one of the easiest and most convenient countries to get a second residency. Furthermore, its favorable tax system makes it a popular destination for those seeking a secondary residence, not just for themselves, but also for their business. The laws regulating the residency process in Paraguay have undergone significant changes, notably in 2020 and again in 2022, introducing various updates concerning the prerequisites and steps to obtain residency. This guide is already updated to reflect all these changes, including the ones that happened after September 2024 and that specifically concern the Paraguayan ID card.

Over the years, our team has assisted over 500 people from all over the globe in leveraging the Paraguay residency program. In this guide, we will go through all the available options and their requirements. If you are seeking a 1-on-1 consultation, we also remind you that it is possible to get in touch with us and receive dedicated assistance.

Temporary and Permanent Residency

The first thing to know about the Paraguay residency program is that there are two main options:

• Temporary residency is valid for 2 years, with the possibility of renewal and conversion into permanent residency.
• Permanent residency grants indefinite residence in the country and requires renewal every 10 years.

The rights that you get with both options are exactly the same. The only distinctions between the two types of residency are their validity periods and the requirements. Currently, the most straightforward and cost-effective route is to first obtain temporary residency and then convert it to permanent residency.

Temporary Residency

Anyone without ongoing criminal charges can obtain temporary residency. It is a popular way to start the residency process in Paraguay, as it does not require making investments or proving a certain level of income. All you need are a few documents to begin the procedures.

The process slightly varies for citizens of MERCOSUR countries as opposed to other countries. In general, however, the procedure always unfolds in three stages:

• Before arriving in Paraguay, one must prepare the necessary documents and have them apostilled. For most foreign nationals the required documents are a background check, the birth certificate and a valid passport;
• Upon arrival in the country, one must navigate through a series of offices (Police, Interpol, IT Department, Ministry of Foreign Affairs and Department of Migrations) to obtain the carnet de radicación temporal. This document, commonly referred to as “residency card”, takes on average 95 days to be issued in 2024.
• After the carnet de radicación temporal, one can approach the Paraguayan Police Identification Department to obtain the ID card (cédula). As of September 2024, it has now become strictly necessary to personally apply for and collect the cédula once the residence card has been received. Previously, it was possible to apply for it immediately after submitting the application for the residence card, but unfortunately, this process is no longer possible. As a direct consequence, to apply for a cédula now requires either making a second trip or waiting in Paraguay until the residence card is issued.

At this point, all the benefits of a residency are granted. One can acquire a driving license, open a bank account, establish a business, purchase property, and based on specific circumstances, become subject to Paraguayan taxes.

For a deeper understanding of all the documents needed, we recommend reading our guide on temporary residency in Paraguay.

Permanent Residency

Permanent residency grants the right to reside indefinitely in Paraguay, with the provision of renewing it every 10 years.

There are two pathways to achieve permanent residency:

1. The most straightforward method is to first obtain temporary residency and then convert it to permanent residency. You are allowed to change your temporary residency for a permanent after 21 months. In this case you will need to show a very basic proof of solvency. To know more about the process, check out our guide on converting temporary to permanent residency.
2. Alternatively, one can directly obtain permanent residency by investment. This requires the commitment to invest at least 70.000$ in the country, presenting a detailed business plan that shows how the money will be invested. To obtain permanent residency this way it is only necessary to show a bank account with more than 70.000$ in funds, then the applicant is given 6 months to execute their business plan.

The residency by investment program remains consistent regardless of whether the applicant is citizen of a MERCOSUR country or not. Some benefits of obtaining permanent residency by investment include:

• Better opportunities to open a bank account in Paraguay;
• Faster processing of the residency card and the ID card, that on average are ready within 30 days;
• Faster route to citizenship in Paraguay, after 3 years of permanent residency.

Minimum stay requirements

One of the key perks of Paraguay’s residency program is that it doesn’t require you to physically live in the country to maintain your residency status. The only requirements are the following:

• Avoid making an unjustified absence from the country of 12 consecutive months during temporary residency;
• Avoid making an unjustified absence from the country of 36 consecutive months during temporary residency.

This means that, every 12 or 36 months, you are just supposed to enter the country. Theoretically, you could then leave again immediately after. You could also justify your absence instead of visiting the country, which is a straightforward process that you can carry out also from abroad. This justification has to be sent and accepted before the deadline for visiting the country. If a person does not visit the country during this term and they don’t justify their absence either, then they risk losing their temporary or permanent resident status.

What are the benefits of Paraguay’s residency program?

Paraguay offers a unique suite of advantages, especially for those scouting for an attractive tax system and a swiftly growing economy. Among the reasons that drive thousands to relocate their residence here every year include:

• A corporate tax rate of 10% on net profit or a 3% on revenue under the regime for small businesses.
• The foreign tax exemption ensures zero taxation on income generated abroad by businesses or individuals.
• A capital gain tax rate of just 8%, that does not apply on profits made on crypto or capital gains realized abroad.
• Banking secrecy.
• No requirement to physically stay in the country to retain residency.
• The laws are especially entrepreneur and investor-friendly, more so for those bringing foreign capital.
• The nation is not blacklisted and permits unrestricted capital movement.
• The criteria and costs to obtain and sustain residency are among the world’s most competitive.
• The Guaraní is Latin America’s oldest currency, maintaining an average inflation rate of less than 3% over the past 50 years.
• For those considering opening a manufacturing business, Paraguay’s low labor and energy costs make it an enticing proposition.

This program is especially appealing to digital nomads. It is entirely feasible and legal to shift one’s residence to Paraguay, globe-trot throughout the year, and still retain formal residency in the country. This way, one becomes subject to Paraguay’s modest taxes and, if desired, can legitimately receive income in dollar accounts or in banks located elsewhere. If you are curious to know how you specifically could benefit from getting residency in Paraguay, feel free to get in touch.