Paraguay: why businesses invest there

Low taxes, access to the Mercosur market and fast company registration make Paraguay an attractive country for investors.

A business-friendly environment

Paraguay is known for its openness to foreign investment, minimal bureaucratic interference and tax legislation that is friendly to entrepreneurs.

• Low taxes. Some of the lowest tax rates in the world for businesses and individuals: in certain sectors the profit tax can drop to 2.25-5%.
• Free trade. International agreements open access to global markets.
• Low tax for exporters. Export production and services under the maquila regime pay a single 1% tax, and free zones pay 0.5%.
• Fast company registration. Setting up a company in Paraguay is quick and transparent.

A second citizenship

Paraguayan citizenship is requested through the court no earlier than three years of living in the country as a permanent resident; there are no fast-track programs. A Paraguayan passport gives visa-free entry to every Schengen country, the United Kingdom, Ireland, Cyprus and almost all of Latin America; visas for Australia and India can be arranged online under a simplified procedure. Paraguay is welcoming to citizens of Russia and Belarus.

For travel to Mercosur countries, Paraguayans can use their domestic ID card instead of a passport. Dual citizenship is not prohibited, but on its own territory Paraguay, like Russia, treats such a person as its own citizen and disregards other passports.

The economy

Paraguay has had one of the fastest-growing economies in Latin America over the past ten years: the country sticks to a strategy of fiscal responsibility and macroeconomic stability, and exports grow year after year.

Paraguay is a full member and one of the founding countries of Mercosur, which lets industrial goods move freely across the bloc's economic space without import duties.

Thanks to the climate (an average temperature of 28°C and around 1,200 mm of rainfall a year), livestock farming is highly developed. Two large hydroelectric plants on the Parana river, Itaipu and Yacyreta, together with the Acaray plant make electricity in Paraguay some of the cheapest in the region.

Business taxes in 2026

• Corporate income tax - 10% on Paraguayan-source income.
• Dividend tax - 8% for residents and 15% for non-residents, withheld on payment.
• VAT - 10%, and 5% for residential rent, real estate, basic food and medicines.
• Social security - 16.5% paid by the employer and 9% by the employee.
• Personal income tax - 8-10%, on Paraguayan income only.

Example. On $100,000 of profit the company pays $10,000 in tax. When dividends are paid, 8% is withheld for a resident owner, leaving $82,800, and $76,500 for a non-resident. The total burden is 17.2% and 23.5%. More in Paraguay taxes.

Special regimes after the 2025 reform

In September 2025 Paraguay passed a package of three laws replacing the regimes of the 1990s. New projects now follow the new rules:

• Maquila production - law 7547/2025 from 9 September 2025. A single 1% tax on the greater of value added in Paraguay or the export invoice amount. Benefits for up to 20 years with extension, and for the first time also for services: software development, business process outsourcing, call centres.
• Investment incentives - law 7548/2025 replacing the 1990 law. Exemption from duties and VAT on imported equipment, and for investments from $13 million an exemption from dividend tax for up to 10 years.
• Assembly regime - law 7546/2025 for electronics assembly for 20 years.
• Free zones - a special 0.5% profit tax for trade and processing for export; both zones are in Alto Paraná.

The economy in numbers

• In January-August 2026 Paraguay exported $14 billion of goods, 24.7% more than a year earlier.
• Maquila exports reached a record $1.31 billion in 2025, with 60% going to Brazil.
• Beef exports were $2.17 billion in 2025.
• The guaraní strengthened in 2025-2026: the currency risk for a dollar investor is rising local asset prices and wages, not devaluation.
• On 3 September 2026 the president publicly ruled out tax increases, but control is tightening through reporting.

How to set up a company

1. A simplified joint-stock company is registered online through the Ministry of Industry and Commerce single window in 72 business hours with standard articles. A foreigner can own 100%.
2. Representative. The company's legal representative must hold a Paraguayan ID, so until you have residence you act through a representative under a power of attorney.
3. Tax number and account. Registration with the tax service, then a company bank account.
4. Electronic invoices. Since 1 April 2025 all new companies issue electronic invoices only.

We handle registration and banking end to end; more in company registration in Paraguay.

Timeline: from decision to a working company

• Document preparation - 2-4 weeks: apostilles, translations, power of attorney for the representative.
• Company registration - 72 business hours with standard articles.
• Tax number and company account - 2-6 weeks, depending on the bank.
• Investor certificate - up to 5 days at the ministry after the investment is confirmed.
• Permanent residence - with no temporary stage; the migration service review usually takes 3-9 months.
• ID card - after the permanent residence resolution, then a personal account.

Realistically the company with an account is running 1-2 months after the decision, and the owner's permanent residence takes another 3-9 months.

Permanent residence by investment and the path to a passport

Under Ministry of Industry and Commerce resolution No. 0283/2026 of 21 April 2026, permanent residence is granted straight away, with no temporary stage, for investments from $70,000 in a business with 5 jobs, from $150,000 in tourism, or from $200,000 in securities or income property. You can apply for citizenship no earlier than 3 years of living in the country with permanent residence; realistically the whole route to a passport takes 4.5-6 years. More in Paraguay permanent residence and Paraguay citizenship.

Who Paraguay suits for business

• Suits manufacturers selling to Brazil and Argentina who want a low-cost base nearby, IT companies and service teams with foreign clients, investors who want permanent residence at once and low taxes where they live, and families ready to actually live in Paraguay.
• Does not suit people looking for an offshore vehicle for foreign income through a company, people who want a passport without living in the country, and those planning another citizenship after the Paraguayan one: under Article 150 of the Constitution a naturalised citizen loses the passport on voluntarily acquiring another.

Banking

A company account is opened after tax registration, and a personal account usually after you receive an ID card. Banks check the source of funds and ownership structure in detail, so prepare company and income documents in advance. Dollar accounts are common in Paraguay, and domestic payments run in guaraníes and dollars. Choosing a bank for your turnover and currencies is part of our support.

What to plan for

• A company is not an offshore vehicle. Interest on foreign bank accounts and exchange gains of a Paraguayan company are subject to 10% corporate tax.
• Retained earnings. From the 2025 accounts the tax service requires disclosure of the composition and purpose of profits held in reserves.
• Crypto-assets. From the 2026 tax year residents report transactions above $5,000 a year through foreign platforms.
• Tax residence arises after more than 120 days a year in Paraguay, but does not automatically end residence elsewhere.

The full guide to niches, taxes and banks is in business in Paraguay in 2026.

FAQ