Country profile
Paraguay
Best : For maximising territorial taxation on a small budget: accessible residence and 10% corporate tax.
A landlocked South American country (about 6.9 million people) between Brazil, Argentina and Bolivia, capital Asunción, currency the guaraní. Low, territorial taxation and one of the lowest living costs on the continent, but weaker infrastructure and public services.
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International rankings
The main public indices scoring business climate, economic freedom, corruption, peace and domestic safety. Figures copied from the official editions; a weak rank shows where to look closer.
| Index | Score | Rank |
|---|---|---|
| Doing Business 2020Banque mondiale / World BankScore 0–100, rank out of 190 economies (1 = best). | 59.1 | #125 / 190 |
| B-READY 2025Banque mondiale / World BankThree pillars scored 0–100 (regulatory framework, public services, operational efficiency). No overall rank: the World Bank publishes a quintile per pillar across 101 economies. |
| |
| Index of Economic Freedom 2026Heritage FoundationScore 0–100, rank out of 184 countries (1 = freest). | 66.4 | #55 / 184 |
| Corruption Perceptions Index 2025Transparency InternationalScore 0–100 (100 = very clean), rank out of 182 countries. | 24 | #150 / 182 |
| Global Peace Index 2026Institute for Economics & PeaceScore 1–5 (lower = more peaceful), rank out of 163 countries. | 1.882 | #64 / 163 |
| GPI 2026 — Societal Safety and SecurityInstitute for Economics & PeaceScore 1–5 (lower = safer), rank out of 163 countries (1 = safest). | 2.231 | #74 / 163 |
- Doing Business 2020 : Last published edition (data as of May 2019). The World Bank discontinued the series in 2021 after data irregularities: read it as a historical benchmark.
- B-READY 2025 : Successor to Doing Business. Sample averages: 66.3 / 54.0 / 60.0. The 2026 edition (over 160 economies) is due by end-2026.
- Index of Economic Freedom 2026 : Hong Kong has not been graded separately since 2021 (folded into China).
- Corruption Perceptions Index 2025 : Published February 2026.
- Global Peace Index 2026 : Overall rank: conflict, domestic safety and militarisation. Day-to-day safety is the next row. Malta and Hong Kong are not covered.
- GPI 2026 — Societal Safety and Security : Appendix C of the 2026 GPI: homicide, violent crime, terrorism and instability. Excludes armed conflict and militarisation. Malta and Hong Kong are not covered.
Geopolitical risk
Tax by profile
Tax and contributions actually paid on a reference case, for a newcomer who is tax resident in 2026. Where a special regime is open to them, it is applied and flagged. The score out of 10 follows from the effective rate.
Rentier
10/10
Effective rate ≈ 0%
- Territorial taxation: foreign-source dividends, interest and gains not taxed
Deposits in a Paraguayan bank are taxed at 8%.
Employee
estimate6/10
Effective rate ≈ 19%
- Employee IPS 9%
- IRP 8% to 10%: about 9.6% before deductions
Personal expenses backed by e-invoices are deductible from IRP and often cut it sharply.
Entrepreneur
6.5/10
Effective rate ≈ 17%
- IRE 10% on profit
- IDU 8% on the distributed dividend
Reference cases and scoring
- Rentier: €100,000 a year from a foreign portfolio (€40,000 dividends, €20,000 interest, €40,000 gains on listed shares), no other activity.
- Employee: €60,000 gross a year paid by a local employer, single with no children. Employee contributions included, employer share excluded.
- Entrepreneur: €100,000 profit from a small local business, fully paid to the owner through the most common route (company and dividends, or sole trader).
Score = 10 minus 0.2 per point of effective rate (0% gives 10, 25% gives 5, 50% or more gives 0), rounded to the half point. Foreign withholding taxes and employer contributions are not counted.
Indicative figures as of October 2026 · Main source : dnit.gov.py. Not tax advice.
Business: incorporating
Paraguay draws founders with a 10% headline corporate rate and low operating costs. Forming an EAS takes more ground work than Estonian e-Residency, and banking remains the weak link for foreigners.
10%
Corporate tax
$1,000–$2,500
Setup
USD, indicative
$800–$3,500
Per year
USD, indicative
6/10
Ease
Ranking
5/10
Banking
Ranking
9.5/10
CFC
Pas de CFC notable
A simple EAS is often quoted around $1–1.5k all-in (notary, registries, RUC). “$12–15k” ranges usually mean heavier SA/SRL packages: don’t mix them up. Annual DNIT/accounting for a lean SME is often ~$0.8–3k. Low operating cost country, but real tax formalities (VAT, IRE, Marangatu).
Who it fits
- Founders willing to relocate or spend time in Paraguay for residence and management
- Activity with non-Paraguay clients fitting territorial logic
- Tight budget seeking a flat 10% CIT without Gulf-style free-zone licences
The real drawbacks
- Fully remote structure with no travel and no reliable local representative
- Need for premium international banking and smooth corporate cards
- Paraguay-only revenue without a VAT and DNIT compliance plan
Real estate: investing
7.0 %
Net yield
indicative
≈ 45 k€
30 m² studio
Asunción
~6%
Purchase costs
+50%
10-year prices
+20%
5-year prices
- Rental income tax : 10%
- Capital gains (personal holding) : Indicatif faible / variable
- Capital gains (via company) : Indicatif faible / variable
- Public debt / GDP : 40%
- Currency : PYG/USD
Reference listings portal : Infocasas
Moving there: living and residence
In Paraguay, foreign income is in principle not taxed, local tax caps at 10% and our grid rates Asunción as low cost. Expect very hot summers, hard banking (money 4/10) and a tax residence you have to prove with documents.
6.3/10
Liberty score
equal weights
0–10%
Income tax
0%
Inheritance
Residence routes
- Temporary residence (income / independent): Renewable temporary cédula
- Permanent residence (after 3 years): Permanent cédula
Reference cities
- Asunción (cost low)
Green and easy to live in within the expat districts (Villa Morra, Carmelitas). Crushing heat from November to March, broken pavements, streets that flood with every big storm and unreliable public transport: you live by car or Bolt. - Ciudad del Este (cost low)
A border town living off trade with Brazil: noisy, congested, with a reputation for smuggling and organised crime. Few foreigners live there by choice; people come for business.
Delays and requirements change; physical presence often required to finalize.
All residence routes, steps and costs · Daily life: cost of living, family, FAQ
Go deeper on Paraguay
The 16 reference countries
Each country fits a different profile. Pick the one that matches yours.
Indicative Liberty Stack data · Methodology · Rankings : Doing Business 2020, B-READY 2025, Index of Economic Freedom 2026, Corruption Perceptions Index 2025, Global Peace Index 2026, GPI 2026 — Societal Safety and Security.