Your Guide To Paraguay Citizenship And Permanent Residency

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Paraguay is a land-locked country with the most homogeneous population of any South American country. The majority of the inhabitants are of mixed Indian and European ancestry. It is one of the largest exporters of hydroelectric power, with its rivers serving as sites for hydroelectric power plants. With a population of 6.5 million people and 34 government-protected wildlife areas, it is safe to say that nature is the biggest attraction in Paraguay. If you are seeking peace in the divine historical surroundings, Paraguay citizenship is the ideal option for you.

As the country stands astride the tropic of cancer, you will be treated in different climates. It has a rich living history, such as the globally significant historical site, the Jesuit missionary’s settlement, and Chaco where German Mennonites live even today.

The capital of Paraguay is Asuncion, one of the unsung capital cities in South America. It is on the banks of the Paraguay river, positioned in the center of the country, providing great access to other parts of the country.

Holding the citizenship status of Paraguay is rather straightforward. In this article, we shall discuss the requirements to acquire citizenship and permanent residency in Paraguay.

Benefits of getting Paraguay permanent residency and citizenship

Paraguay, bordered by Argentina, Bolivia, and Brazil, is one of the easiest and cheapest options if you are looking for second citizenship. It is famously called the “Heart of South America”, as it is centrally located on the continent. Paraguay is a free and calm country, that welcomes all nationalities with open arms, especially foreign investors and entrepreneurs, to become tax residents. Here are some of the benefits of becoming a Paraguay resident,

With the Paraguay residency, you can live, work and study in the country.
The most attractive benefit is that you do not have to live there physically to maintain permanent residency status. You just need to visit the country every three years, and no status renewal is required.
You can get Paraguay citizenship with a relatively small bank deposit and the country does not tax foreign-sourced income.
A Paraguayan passport is pretty attractive. You can travel to the United Kingdom (UK), European Union (EU), and Ireland without a visa if you have the citizenship of Paraguay
Paraguay is a member of Mercado Común del Sur (MERCOSUR), which allows you to travel anywhere in South America without a visa.
The GDP growth rate of Paraguay is one of the greatest in the world.

Requirements to get Paraguay permanent residency

Paraguay is one of the easiest countries, with minimal requirements, to acquire permanent residency. In this part of this article, we will provide you with information on how to acquire permanent residency, the required documents, processing time, and the validity of the residency.

Options to get the Paraguay permanent residency

The route to Paraguay permanent residency is a straightforward process with various options. In this section, we have highlighted some of the common ways in which you can get a Paraguay permanent residency.

Bank deposit: If you are from a country that does not require a visa to enter Paraguay, or requires a visa upon arrival, such as the US, Canada, Australia, or New Zealand, you can get permanent residency by depositing $4,500 (Gs31,076,532) in a Paraguay bank. Usually, the deposits are without interest, you can withdraw this deposit after getting the permanent residency.
Investment program: If you are from a country that requires a visa to enter Paraguay, then you can opt for Paraguay citizenship by investment program. The minimum investment required is $70,000, however, this can be realized in 10 years. You must show in your business plan that your company can spend $70,000 in 10 years. Some of the activities that are considered valid for the investment program are: engaging in agricultural land or commerce, purchasing real estate properties, and offering services.
Retiring in the country: You are eligible for this option only if your monthly retirement income is at least $1,022 (Gs 7,015,600) per month. There is no age limit for retirement

Processing time and validity of the Paraguay permanent residency

The process of getting the permanent residency takes around two to three months from the time of application along with multiple week-long visits to the country. Make sure that you visit Paraguay within six months of receiving the permit, and apply for an ID card. It is recommended to get an attorney for legal assistance if you do not speak Spanish. The Paraguay permanent residency permit will be valid for five years.

Acquiring citizenship in Paraguay

According to the Paraguay citizenship laws, you can apply for citizenship after three years of receiving your permanent residence permit. You should have spent at least 183 days every year for three years in Paraguay to apply for citizenship. You are also expected to pay your taxes and social security and learn Paraguay history and Spanish. Note that after three years of getting your permanent residence permit, you can apply for citizenship, the naturalization procedure might take a few more years.

Ensure that you adhere to the below-mentioned requirements while applying for Paraguayan citizenship,

Must be 18 years or older with a valid passport.
Immigration card.
Permanent residence permit.
Police certificate from home country.
Medical certificate.
Police certificate issued by national police of Paraguay.
Paraguay identity card.
Birth certificate translated and authorized.
Certificate of employment, if you are working in a company.
Authenticated certificates, if you are an owner of a registered property.
Signed affidavit (issued by Supreme court of justice)

Benefits of Paraguay citizenship by investment

With the Paraguay passport, you can travel to over 130 countries with visa-on-arrival or visa-free, including Russia, the European Union, and the United Kingdom. If you are interested to know more about the passport power of Paraguay, check out Paraguay global passport index guide.
If you get Paraguay citizenship, it is easy to get an employment visa in the United States of America.
You can settle in any MERCOSUR country, such as Argentina, Brazil, or Uruguay, once you become a citizen of Paraguay.

Dual Citizenship in Paraguay

According to the Paraguayan National Constitution, dual citizenship may be allowed only through an international treaty and by reciprocity of constitutional rank, between the states of origin and adoption. If you want to keep the original nationality, your origin country must hold a bilateral agreement with Paraguay. Hire an immigration attorney to make an informed decision.

Tax benefits in Paraguay

Among the MERCOSUR, Paraguay has the highest tax benefits. In Paraguay, you will be considered a tax resident if you spend more than 120 days a year in the country.

Personal income tax

Both foreigners and residents are subject to paying personal income tax for their Paraguayan source of income. However, the majority of the residents and citizens do not pay personal income tax as their annual income does not exceed the minimum threshold. Paraguay has a territorial tax system, which means that only the income you earn within the territory is taxed. The income you earn from abroad is legally exempted from tax.

As a resident, you need to start paying personal income tax when you earn at least $22,500 in Paraguay. The taxation, however, is not problematic, Paraguay levies a 10% tax on almost all income categories. You need to pay 10% tax when your annual income is at least 120 times the minimum wage, that is, about $39,000. It is 8% of 72 minimum wages.

Other tax rates

The standard VAT rate in paraguay is 10%. It is reduced to 5% on certain goods and services. The corporate taxation is flat at 10% on the income derived from Paraguay. Paraguay has no net worth tax, inheritance, and capital tax. The estate tax is a mere 1%.

However, if you are an entrepreneur or investor and you are not tied to any place, you can live in Paraguay completely tax-free.

The process to become a tax resident

The process is simple and straightforward.

Once you receive your ID card proving your permanent residency, collect the documents showing that you are a tax resident.
Register at the treasury office and participate in the official course for self-employment to get your tax number Registro Único del Contribuyente (RUC).
Both the above-mentioned processes require your physical presence and are completely in Spanish. It is better to get a translator.
After getting your RUC, file for value-added tax (VAT). It is recommended to hire an accountant to help you with the process.

The documents you must have after becoming a tax resident are,

Life and residence certificate, national police issued proof of address in Paraguay.
Tax authority’s certificate, you will have a new copy every month as monthly VAT is binding.
Bank account statement with a local address.
Landlord statement.
Mobile phone contract.

Conclusion

Paraguay is located in the middle of the South American continent, which provides various scope and opportunities for entrepreneurs who are looking for expanding their business and relations.

Because of its relaxed pace of life, temperature, and friendly people, Paraguay is, in many ways, known as the best country in Latin America to live in. If you are seeking a tranquil lifestyle with a bright atmosphere, you can easily call Paraguay your second home, as it can create wonders in your life. And, citizens of nations that have a bilateral agreement with Paraguay can also consider the option of dual citizenship in Paraguay.

Paraguay is best suited to you if you are looking for a permanent residency with a minimal physical presence in the country, are unable to get a tax residence elsewhere because you travel too often, or are searching for a low-cost residence and citizenship with the highest tax benefits.

If you are interested in other excellent citizenship by investment programs, please check out the following articles.

Frequently asked questions

How can I become a permanent resident of Paraguay?

If you are from one of the visa-free countries, you can become a citizen through the national bank deposit scheme. If not, you can acquire a permanent residence permit by investment.

How can I become a citizen of Paraguay?

You can apply for citizenship after three years of receiving your permanent residence permit. You should have spent at least 183 days every year for three years in Paraguay to apply for citizenship.

How long does it take to get citizenship in Paraguay?

If you satisfy all the requirements, you will get your citizenship in three months.

How strong is the Paraguay passport?

With a Paraguay passport, you can travel to 130 visa-free or visa-on-arrival countries, including the UK, and the EU.

Do I have to become a tax resident after getting permanent residence?

No, not necessarily. However, it is profitable to become a tax resident, as Paraguay is called a tax haven for both foreign and local investors.

Does Paraguay offer dual citizenship?

Paraguay offers dual citizenship options only to those countries which have bilateral ties with it. It is recommended to hire an attorney to take you through the process.

What is the minimum investment amount to get a permanent residence by investment?

The minimum investment to get a permanent residence is $70,000, however, this can be realized in ten years. Some of the investment programs you can opt for are agriculture, commerce, purchasing real estate properties, or offering services.