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We will discuss the tax advantages offered by Paraguay, including a 0% tax on foreign-sourced income. We will also explore why Paraguay is becoming increasingly popular for business and remote work, and how living in Europe, for example, while having a Paraguayan company can ease your tax obligations.
Part 1: Introduction
I’m your audio guide host, my name is Daniel. I represent the company Living in Paraguay (https://www.livinginparaguay.com/). We provide top-notch immigration consulting services, offering the best service on the market for obtaining Paraguayan residency, tailoring solutions to your specific requests and financial possibilities.
Paraguay is a South American country that is steadily working to improve its position. Paraguay is a friendly, dynamic country rich in employment opportunities for its people and foreign professionals looking to reside within its borders.
So, let’s start with the most important aspect: what tax benefits exist in Paraguay in 2023. The most interesting figure here is 0%. That’s the tax rate foreign-sourced income companies pay. This means that any remote worker or businessperson working with foreign companies won’t pay taxes. Additionally, personal income earned within Paraguay is subject to only a 10% tax, which is significantly different from Spain’s lowest income tax rate of 19% (which can go up to 45%, nearly half of the income for pensioners and workers). [For instance, self-employed individuals in Spain pay a 35% tax on personal income, plus additional taxes.]
What types of businesses can most effectively leverage these tax advantages? We can say that any business that generates income from abroad can utilize this advantage. You don’t even need to obtain a fiscal ID and can open a company with a current bank account, which makes maintaining a company that deals with foreign services more cost-effective.
Part 2: Paraguay for Business
Discussing why Paraguay is becoming an increasingly popular destination for businesses.
Identifying the sectors and types of businesses that can thrive in this country.
As for the most popular sectors, we can tell you that agriculture and livestock are the driving forces of Paraguay’s economy. The country ranks first in renewable energy production and second in stevia production. In fact, Paraguay is the world’s sixth-largest exporter of meat. And that’s not all, as Paraguay is also a significant exporter of soy and sunflower. If you’re considering investing here, among the sectors you should focus on is certainly livestock, with 25 million hectares allocated to it. The industrial sector is also developing, including textiles, leather, forestry, chemicals, and pharmaceuticals.
Therefore, investments in these sectors can be profitable.
The same applies to tourism, which has experienced significant growth in recent years and is expected to continue growing. Paraguay boasts amazing natural beauty, national parks, and cultural heritage. Developing tourism can be a lucrative business. Just think, in 2017, the number of tourists almost doubled, opening excellent opportunities for tourism development in many wonderful parts of the country.
Part 3: Remote Work and Business
Paraguay, like many other countries, can offer various advantages to remote workers, including:
- Easy Residency: No need to prove your income, no restrictions on renewing residency or applying for permanent residency.
- Affordable and Stable Cost of Living: Compared to several developed countries, the cost of living in Paraguay can be lower, which may attract remote workers, especially if they earn a foreign currency income. Paraguay also experiences zero inflation, in the last five years.
- Nature and Mild Climate: Paraguay offers abundant natural beauty, national parks, waterfalls, and beaches. Remote workers can enjoy active lifestyles and travel throughout the country.
- Tax Benefits: 0% tax on foreign-sourced income. Paraguay provides tax incentives for investors and business owners, which can also be appealing to remote workers planning to start their own businesses.
- Freedom of Travel: With Paraguayan residency, you have access to South America without the need for visas in Mercosur countries – Argentina, Brazil, Uruguay – where you can live and work on an equal footing with locals.
We were pleased to tell you about the tax benefits and business opportunities in Paraguay. This is Daniel, your host. In the next episode of our audio guide, we will talk about life in Paraguay: cities, climate, and society.
Join us. And remember, you can always ask us questions; we’re available on all messenger apps. We’re here for you, Living in Paraguay (https://www.livinginparaguay.com/).
