Company in Paraguay in 2026: a tax and setup guide for Brazilians

Which company to open, what the company and the owner pay living in Brazil or in Paraguay, what it costs to serve Brazilian clients, how maquila works and when the structure makes sense.

In detail

“A company in Paraguay pays only 10%”: the phrase is right about the company's tax and says little about the rest: what the owner pays, what it costs to sell services to Brazil and what the Brazilian Federal Revenue requires from people with a company abroad.

This guide covers the company types, the taxes on both sides of the border in four scenarios, maquila and the mistakes that turn savings into a tax assessment.

Which company to open in Paraguay

A Brazilian can be a partner without living in Paraguay. In an EAS, the representative and directors must be Paraguayan or foreigners with permanent residence and an identity card (cédula). That is why owners who open the company while living in Brazil work with a local representative under a power of attorney.

After incorporation, the company reports its beneficial owners within 45 business days and any changes within 15 business days, and updates the register every year by 30 June. Without this register the company cannot open an account or make deposits and transfers, its RUC tax number is blocked, and the fine ranges from 50 to 500 daily minimum wages or up to 30% of dividends.

Taxes in Paraguay: what 10/10/10 means

One rule matters for anyone thinking of using the company as a safe: interest on foreign accounts, exchange gains and dividends from foreign companies received by a Paraguayan company count as Paraguayan income and pay 10% IRE.

What the owner living in Brazil pays

A Brazilian tax resident declares the Paraguayan company under Law 14,754/2023. The controlled company's profit pays 15% in Brazil, in the annual return:

• Active company, with at least 60% of income from its own business: the 15% applies when the profit is distributed. Under this regime the IRE paid in Paraguay is not credited, and IDU is credited only when reciprocity is proven. Without proof, the Federal Revenue recognises reciprocity only with Germany, the United Kingdom and the United States.
• Passive company, with more than 40% of income from interest, dividends, rent or royalties: the 15% applies every year on 31 December, whether or not the profit is distributed.
• Opting for the annual regime: an active company can switch to paying every year. The tax paid in Paraguay is then credited, up to the amount of the Brazilian tax.

Example with a profit of 100 in an active company and the owner in Brazil:

Paraguay is not on the Federal Revenue's list of low-tax jurisdictions. The Brazilian law's test, however, is a rate below 17%, and IRE is 10%. That is why the structure needs real activity in Paraguay from day one. The Paraguayan company's profit enters the base of the minimum tax for people earning more than R$ 600,000 a year, and the 15% under Law 14,754 is credited against it. The new rules are in the guide to Brazil dividend tax in 2026.

What the owner who moves to Paraguay pays

The numbers change when the owner stops being a Brazilian tax resident. For the Paraguayan tax authority, a tax resident is someone with permanent residence. With it, the partner pays 8% IDU instead of 15%, and Brazil stops taxing foreign income after the definitive exit.

• Permanent residence. Mercosur temporary residence lasts 2 years and does not give tax residence. An investor through SUACE receives permanent residence directly: US$ 70,000 in a business with at least 5 formal jobs and a business plan, US$ 200,000 in financial instruments for 2 years, US$ 200,000 in property used for an economic activity, or US$ 150,000 in tourism.
• Tax residence certificate. The Paraguayan tax authority issues it in 10 business days, valid for 1 year, and checks the record of entries into and exits from the country.
• Definitive exit from Brazil. Without the exit notice (Comunicação de Saída), you remain a Brazilian resident for 12 months and pay tax on worldwide income. The steps are in the guide to leaving Brazilian tax residency.
• MEI and Simples. A non-resident cannot hold an MEI, and a company with a non-resident partner or director leaves Simples Nacional.

A Paraguayan company providing services to Brazil

A Paraguayan company can sell services to clients in Brazil like any foreign company. The Brazilian client bears the bill:

The municipal service tax (ISS) and IOF on the exchange come on top. Brazil and Paraguay have no treaty against double taxation: the treaty signed in 2000 was approved by the Brazilian Congress in 2003 and never entered into force. So none of these rates is reduced.

The biggest risk is invoicing through Paraguay work done by someone who lives and works in Brazil. The Federal Revenue can disregard the transaction and charge the tax with a 75% penalty, which reaches 100% in cases of evasion, fraud or collusion and 150% for repeat offences. The same logic applies to a Brazilian company with a subsidiary in Paraguay: prices between the two follow market value, and the subsidiary's profit enters IRPJ and CSLL every year, about 34%, with a credit only for the 10% paid in Paraguay.

Maquila: 1% to produce or provide services for abroad

Law 7,547/2025 replaced the old maquila law. The company in Paraguay, under a contract with a parent company abroad, processes, assembles or repairs goods imported temporarily for re-export, or provides services used abroad.

• A single 1% tax on the higher of the value added in Paraguay and the export invoice. Other national taxes on the programme, such as IRE and IDU, do not apply.
• Term of up to 20 years per programme, renewable.
• Sales in Paraguay: a pure maquiladora sells on the local market up to 10% of the previous year's exports, paying the taxes on that share.
• Mercosur origin: for Paraguay, up to 60% of inputs from outside the region until 2038, depending on the product's NCM code. With a certificate of origin, the goods enter Brazil duty-free.

Service maquila covers software, customer support and administrative services for parent companies abroad. When the end client is Brazilian, the imported service still pays the Brazilian taxes in the table above. Law 7,548/2025 exempts from duty the import of capital goods for approved projects and, from US$ 13 million of investment, grants 10 years without IDU.

When a company in Paraguay makes sense

• You move. Permanent residence, the definitive exit from Brazil and a company in Paraguay: about 17.2% on distributed profit.
• A real operation in Paraguay. Office, team, clients and decisions in the country: industry, maquila, logistics, agribusiness and trade with Mercosur.
• Agribusiness. Within 50 km of the border, Brazilians without permanent residence and companies with a majority of Brazilian partners cannot own rural land. Outside that strip, the purchase is free.
• Property and income in dollars. Rental property in Asunción or Encarnación, through the company or in your own name.

It does not make sense when the owner stays in Brazil and the company only invoices services performed there: the bill exceeds 37%, and the risk of an assessment stays with you.

Costly mistakes

• Counting only the 10%: an owner in Brazil pays 15% IDU plus 15% under Law 14,754.
• Assuming temporary residence is enough: only permanent residence gives tax residence in Paraguay.
• Not declaring the company in Brazil: Paraguay has exchanged tax information on request since 2022 and has announced automatic exchange.
• Holding investments in the Paraguayan company: interest and dividends from abroad pay 10% IRE there, and a passive company pays 15% every year in Brazil.
• Forgetting the beneficial owners: without the register, the account and the RUC are blocked.
• Keeping an MEI or Simples after leaving Brazil: a non-resident cannot hold an MEI, and the company leaves Simples.

How Murblz helps

• Company setup. EAS, SRL or SA in Paraguay, with a representative, RUC, beneficial owner register and local accounting.
• Accounts. Business account and personal account in Paraguay.
• Residence. Residence in Paraguay through Mercosur or as an investor, cédula and tax residence certificate. See taxes in Paraguay.
• Definitive exit. The exit date, the exit notice and the exit return, and the letters to banks and brokers, together with your accountant.
• Property. Investment property in Paraguay, with rental income.

The details and the cost are with the consultant, and the first consultation is free. Talk to a consultant

Read also: moving to Paraguay, a Paraguayan company car in Brazil and how to send money to Paraguay.

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