Tax Residency in Paraguay
Pay only 10% tax on local income and 0% on foreign income. Discover why Paraguay is the top destination for Brazilians seeking legal tax optimization.
Tax residency determines which country you're required to declare and pay taxes to on your income. Unlike citizenship, tax residency can be legally changed, allowing you to choose a more favorable jurisdiction for your finances.
Paraguay uses a territorial taxation system, meaning only income generated within the country is taxed. Income from investments, rentals, dividends or any other foreign source is completely exempt.
"By establishing tax residency in Paraguay, you can legally reduce your tax burden from as much as 27.5% down to just 10% on local income — and 0% on international income."
— The advantage of Paraguay's territorial taxation
This strategy is 100% legal and used by thousands of entrepreneurs, investors and professionals seeking to optimize their tax situation. Paraguay offers double-taxation avoidance agreements and is a Mercosur member, easing commercial operations.
Advantages of Residency in Paraguay
Why thousands of Brazilians are choosing Paraguay?
Territorial Taxation
Paraguay only taxes income generated within the country. Foreign income is exempt from income tax.
Low Tax Burden
A flat 10% rate on local income. One of the lowest in Latin America and the world.
Fast Process
The residency application process is simple and can be completed within a few weeks.
No Excessive Bureaucracy
Simplified documentation, with no mandatory minimum investment required for residency.
Business Formation
Easy to set up companies with favorable taxation and access to Mercosur.
International Bank Account
Ability to open accounts at Paraguayan banks with access to dollars and guaraní.
Tax Comparison
See how Paraguay stands out in the region.
| Country | Top Income Tax Rate | System |
|---|---|---|
| Brazil | up to 27.5% | Worldwide Income |
| Argentina | up to 35% | Worldwide Income |
| ★Paraguay | 10% | Territorial |
Requirements for Residency
Documentation needed to start the process.
Paraguayan ID Card
Identity document issued by Paraguay
Address in Paraguay
Proof of residence or rental agreement
Local Accountant
An accountant to keep your monthly tax records
Frequently Asked Questions
Do I need to live in Paraguay year-round?
No. Once you obtain permanent residency, you only need to visit the country at least once every 3 years to keep the status active. There's no minimum annual stay requirement.
Can I keep my Brazilian citizenship?
Yes! Tax residency in Paraguay does not affect your Brazilian citizenship. You'll remain Brazilian, just with tax residency in another country.
How does territorial taxation work?
Under the territorial system, you only pay taxes on income generated within Paraguay. Dividends, rentals, investments and any income originating outside the country are completely exempt.
How long does the process take?
The full process takes 2 to 4 weeks, depending on how quickly documents are obtained. Our advisory team follows every step.
Can I open a company in Paraguay?
Yes! With residency, you can set up Paraguayan companies with a tax rate of just 10% on profits. Ideal for Mercosur operations.
What's the cost of living in Paraguay?
The cost of living in Paraguay is significantly lower than in Brazil. Asunción offers excellent infrastructure with affordable housing, food and services.
Need the Paraguayan identity document first?
Ready for Your Tax Freedom?
Get in touch with our team and discover how OZEN CAPITAL can help you establish tax residency in Paraguay safely and efficiently.