Paraguayan car in Brazil: how to enter and drive legally with your Paraguayan company's car

A car registered to a Paraguayan company enters Brazil as a tourist's car when the driver lives in Paraguay and is only visiting. For a Brazilian, that takes three steps before the first trip: Paraguayan residence, a real move and a tax exit from Brazil. On the road you carry the car's papers, the company's power of attorney to drive it and take it out of the country, your driving licence and insurance valid in MERCOSUR.

In detail

Who can drive a Paraguayan car in Brazil

A car registered in Paraguay travels around Brazil on a tourist trip with no import tax and no customs declaration, and border officers may run selective checks. The MERCOSUR rule for tourists' cars covers cars of people who live in Paraguay and of companies based there, and Brazil applies it through article 356 of its Customs Regulation. What matters is neither the plate nor the passport but where the driver lives: the driver must be resident in the country where the car is registered and be in Brazil only as a visitor.

The rule looks at residence, not citizenship. A Brazilian who lives in Paraguay counts under this rule as a traveller coming from Paraguay, as long as the residence can be proved.

Step 1: permanent residence in Paraguay

Residence is the first document of the structure: without it you cannot represent your own company or prove at the border that you live in Paraguay. Brazilians have the MERCOSUR route: temporary residence for 2 years with no extension, then permanent residence with proof of means. An investor in the SUACE programme, with US$70,000 invested in a business and five formal jobs, gets permanent residence without the temporary stage.

For the car structure the goal is permanent residence: it makes you a Paraguayan tax resident, and the resident's ID card is what you use to open accounts, sign for the company and show at the border where you live. Both routes are on the page about permanent residence in Paraguay.

Step 2: the move and the definitive exit from Brazil

Paraguayan residence does not change your status in Brazil by itself. While your home, family and work stay in Brazil, the Federal Revenue treats you as a resident, and a Brazilian resident falls outside the tourist car rule. The tax exit takes 2 filings:

• Exit Notice (Comunicação de Saída Definitiva do País) – by the last day of February of the year after departure;
• Exit Return (Declaração de Saída Definitiva do País) – by the last business day of April of the year after departure.

Without the Exit Notice you stay a Brazilian tax resident for 12 months, and every new entry into Brazil restarts that count. After the exit, income that stays in Brazil is taxed only at source: 15% on rent and 10% on dividends. The full sequence is in our guide to leaving Brazil tax residency.

In Paraguay an individual's tax residence follows permanent residence. Paraguayan personal income tax reaches only Paraguayan-source income, so interest on foreign accounts and dividends from foreign companies stay outside it. The DNIT, Paraguay's tax office, issues a tax residence certificate within 10 business days, valid for 1 year, after checking your entries and exits. The numbers are on the page about taxes in Paraguay.

Step 3: a company in Paraguay, EAS or SA

The car is held by a Paraguayan company, not by you: business assets stay apart from personal ones, and the company can authorise several drivers. There are 2 practical forms:

• EAS – the simplified joint-stock company under Law 6480/2020, registered online in 72 business hours with standard articles and no minimum capital;
• SA – the joint-stock company, for larger assets and more shareholders, with a notarial deed and a statutory auditor, the síndico.

A foreigner may be a shareholder from day one, but only a Paraguayan citizen or a permanent resident can sit on the board and represent the company, so the company goes hand in hand with residence. Every company files its beneficial owners, and without that filing it cannot open accounts or make transfers. The company pays 10% tax on profit, and a dividend to a shareholder resident in Paraguay pays 8%. While you still live in Brazil, the profit of a controlled foreign company goes into your Brazilian return at 15% under Law 14,754/2023; after the tax exit that rule no longer applies to you. Setting up the company and its account is covered on the pages about company registration in Paraguay and a business account in Paraguay.

Step 4: the premium car in the company's name

The company buys a new car from a dealer in Paraguay or imports the chosen model and registers it with the Vehicle Registry. The registry issues the Cédula del Automotor, the car's registration document, with the owner's details: here, the company. The car may only be driven with the cédula on board, and the police can hold a car without it. Paraguayan law bans imports of used cars more than 10 years old, counted from the model year.

New electric and hybrid cars enter Paraguay with no customs duty and no VAT, on import and on sale, under Law 6925/2022, which runs until 2032, and pay less number-plate tax in their first 5 years. The final price depends on the model and the purchase route, and a consultant shows the current price for your case.

Step 5: documents for the trip to Brazil

The MERCOSUR rule lists what the driver carries, and for a company car the set is:

• Identity document – the Paraguayan residence ID card and a passport or Brazilian ID;
• Driving licence – a valid Brazilian CNH or a Paraguayan licence. A foreign licence is valid in Brazil for up to 180 days from entry, and a Brazilian with a Paraguayan licence proves 6 months of normal residence in Paraguay with a consular certificate;
• Proof of residence in Paraguay – the residence ID card, the record of entry into Brazil and, to settle any question from the officer, the Exit Return receipt;
• The company's power of attorney – a notarial power of attorney made in Paraguay that authorises you to drive the car and take it out of the country;
• The car's document – the Cédula del Automotor in the company's name;
• Third-party liability insurance – a policy valid in the MERCOSUR countries for the dates of the trip.

Digital documents count only where the border can verify them electronically, so the originals travel with you. The car enters and leaves with you, and trips are short: for the car of a Brazilian living abroad, the Customs Regulation gives up to 90 days per entry as the benchmark, extendable to 180 for someone who proves work outside Brazil. The car carries no passengers, not even for free, and does not serve a business in Brazil: in those cases the tourist rule stops applying.

Mistakes that cost the car

• Residence on paper only – a Paraguayan ID card, but home, family and work in Brazil. For the Federal Revenue the driver is still a Brazilian resident.
• A relative who lives in Brazil at the wheel – not even a spouse may drive the car while living in Brazil, power of attorney or not.
• The car stays in Brazil – if you return to Paraguay without the car, customs must be notified, and the car stays parked for up to 90 days, unused.
• An incomplete power of attorney – a power of attorney to drive only, without permission to leave the country, does not work at the border.
• Working with the car – ride-hailing, freight or passengers in Brazil take the car out of the tourist rule.
• Unpaid fines – the car cannot leave Brazil until traffic fines are paid or deposited, and a car that left with fines outstanding is held on its next entry.

For a Brazilian resident a foreign car means a fine of 10% of the customs value, at least R$500, plus import taxes, and the risk of losing the car. In serious cases the Federal Revenue refers the case to prosecutors as customs evasion, a crime punishable by 1 to 4 years.

What Murblz does for you

• Residence in Paraguay. MERCOSUR temporary or investor residence, then permanent residence, with the document list, apostille and translation.
• The definitive exit from Brazil. The departure date, the Exit Notice and Exit Return with your accountant and the letters to banks and tenants.
• Tax residence certificate. The DNIT application once permanent residence is in place.
• An EAS or SA company. Incorporation, the beneficial owner filing and monthly bookkeeping with a local accountant.
• Bank accounts. The company account and your personal account in Paraguay.
• The car. Choice, dealer purchase or import, registration in the company's name and the Cédula del Automotor.
• Power of attorney and insurance. The notarial power of attorney to drive and leave the country and the insurance for trips to Brazil.

Details and the cost of each step come from a consultant, and the first consultation is free. Talk to a consultant

Who this structure suits

• business owners who move to Paraguay and come back to Brazil for weeks, for business or family;
• investors with Paraguayan tax residence and business in the region;
• families who move together and drive between the two countries.

For someone who keeps living in Brazil this structure is out of reach: a Paraguayan car works only with a real move. The move is covered in our guides how to move a business abroad and how to send money to Paraguay.

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