Company Formation in Paraguay SA, SRL, and EAS
If you are looking for a country with high legal certainty and an attractive territorial tax regime, setting up your company in Paraguay is a fundamental strategic decision. The country offers a clear legal framework. This allows foreign investors to establish themselves quickly.
The first major step in your investment is choosing the correct legal structure. It’s not just about choosing a name. It’s about defining your future tax and asset liability.
Our legal experience in Paraguay allows us to state that the key to business success begins with the correct choice of company type. Therefore, this guide shows you the rigorous legal process. We guide you with the precision that only an analysis based on the Paraguayan Civil Code can offer.
II. Legal Framework and Most Common Company Types
The entire corporate structure in Paraguay is based on the Civil Code and complementary commercial legislation. It is essential that you know the options before starting.
The Civil Code as the Basis for Commercial Companies
The legal basis regulating your future company is found in one of the country’s fundamental texts.
Book III (Of Particular Contracts), Title XV (Of the Partnership Contract) of the Paraguayan Civil Code regulates the structure. It also defines the requirements, liability, and minimum standards for the commercial companies you can establish.
Comparative Analysis: SA, SRL, and EAS
For your company registration in Paraguay, these are the three structures you must consider:
| Company Type | Key Acronym | Recommended Use | Minimum Capital | Liability |
|---|---|---|---|---|
| Corporation | SA | Ideal for large investments. Also for companies with multiple partners or those seeking to be listed. | 100% of the share capital must be subscribed | Limited to the capital contributed. |
| Limited Liability Company | SRL | Preferred for SMEs. It is useful for family businesses or professional service projects. | Not legally defined. An amount appropriate to the project is recommended. | Limited to the capital contributed. |
| Simplified Stock Company | EAS | Perfect for startups and entrepreneurs. Ideal for sole proprietorships due to its agility. | Does not require initial minimum capital. | Limited to the capital contributed. |
III. The Formation Process: Key Steps and Real Costs
The process of opening your company in Paraguay is straightforward. It requires the involvement of professionals (lawyers and public notaries).
Prerequisites and Initial Documentation
To start the process, you will need the following documentation:
- Copy of your Identity Card (or Passport if you do not yet have residency).
- Clear definition of the corporate purpose (what the company will do).
- Definition of the share capital and the partners’ participation.
The 5 Key Steps
To legally establish your company, you must follow this sequence:
- Name Reservation (DIPYGE): The Notary must verify that the name is not registered. They will perform this verification at the Directorate of Intellectual Property and Business Management (DIPYGE).
- Drafting of Bylaws: You must draft the social contract or bylaws.
- Act of Incorporation before a Notary: The partners must sign the deed of incorporation before a Public Notary.
- Registration with the DGRP: You must register the deed with the General Directorate of Public Registries (DGRP). This registration is essential for the company to acquire legal personality.).
- Obtaining the RUC and Registration with the SET: The final step is to register the company with the Undersecretariat of State Taxation (SET). This is how you obtain the RUC (Single Taxpayer Registry).
Estimated Real Costs
The lack of transparency in costs is an obstacle for the foreign investor. Here we detail the three major categories of expenses you will incur:
- Notary Costs: These are the fees for drafting the deed and registration procedures.
- Registration and Publication Fees: The fixed costs for registration with the DGRP and mandatory publication in newspapers (depending on the company type).
- Minimum Capital: Although the EAS does not require it, SAs and SRLs must have the share capital. This must be deposited or backed up according to the law.
IV. Post-Formation Tax Obligations
Once your company has the RUC, its tax obligation with the State comes into effect.
- Taxation (IRE): Your company must declare and pay the Business Income Tax (IRE). This tax has a general rate of 10% on income from a Paraguayan source.
- Accounting: You mustkeep formal accounts. You must also file the corresponding tax returns with the SET.
Company Registration
Company registration in Paraguay is an accessible and efficient process. This happens if you seek the appropriate legal guidance. The correct choice among SA, SRL, or EAS is the foundation for optimizing your tax burden and protecting your assets.
Don’t waste time on bureaucratic processes. Our legal team can help you choose the corporate structure (SA, SRL, or EAS) that best suits your business model. We manage the complete formation until you obtain the RUC. Contact us today to start your company registration in Paraguay
