Paraguay: residence and territorial taxation explained
Paraguay applies territoriality: foreign-source income is not taxed there. That makes it a sought-after residence destination. But the tax residence certificate is not obtained with an address alone.
Published on 4 November 2026 · Jason Pivron, director
Territoriality
According to our Paraguay profile, taxation is territorial: foreign-source income is not taxed. This rule was recorded on 21 September 2026 and its official source checked on 30 September 2026.
It only applies to a Paraguayan tax resident. As long as you remain resident in your home country, its rules apply. Nothing here is tax advice: your case is checked during the scoping call.
Permanent residence and the tax residence certificate
Permanent residence is accessible, with no heavy investment requirement. Our tax residence service covers permanent residence and the steps towards the tax residence certificate.
The key point: a Paraguayan address is necessary but does not make you a tax resident. The certificate requires genuine presence in the country.
Long timelines
Paraguayan administrative timelines are long and unpredictable: our profile records 3 to 4 months to form a company. Plan for it before setting a departure date.
In return, annual upkeep is among the lowest in the catalogue once residence is obtained.
A local company, if needed
The usual forms are the Sociedad Anónima and the SRL, with no minimum capital required. Law 6480 of 2020 created the simplified joint-stock company (EAS), the first form a single shareholder can set up.
On banking, our assessment: fintechs are accessible, traditional banking is slower and more demanding.
What it costs
Published prices, government fees included, excluding capital and travel. Details are on the Paraguay profile.
- Residence and tax residence: €2,490 one-off
- Company formation: €5,690 one-off
- Registered office: €1,290, then €1,290 per year
- Bank account opening: €2,900 one-off
- Accounting, filings and audit: €2,261, then €2,261 per year
Where to start
The right order: check that you can genuinely live in Paraguay, obtain residence, and only then decide whether you need a local company. A foreign company alone does not move your tax residence.
A free 20-minute call is enough to frame the project, with a firm quote before signature: book a call.
Frequently asked questions
Does Paraguay tax foreign income?
No: taxation is territorial, foreign-source income is not taxed. The rule only applies to a Paraguayan tax resident.
Is an address in Paraguay enough to be tax resident?
No: the address is necessary, but the tax residence certificate requires genuine presence in the country.
How much does residence in Paraguay cost?
Our published price for residence and tax residence is €2,490, government fees included.
How long does it take to form a company in Paraguay?
Our profile records 3 to 4 months; administrative timelines there are long and unpredictable.