Paraguay: residency, citizenship, tax and living

The regular way to get permanent residency in Paraguay is to secure temporary residency and hold it for two years to meet the criteria for permanent residency. If you want to invest in Paraguay, you can skip the temporary residency requirement if your investment is at least USD 70,000 and you make it under the country’s SUACE program.

It takes between three and five years to get Paraguayan citizenship. You are eligible to apply for Paraguayan citizenship by naturalisation after three years of permanent residence in the country. To acquire permanent residence, you either need to be a temporary resident for two years, or make an eligible investment and become a permanent resident without meeting the temporary residency requirement.

To qualify for Paraguay’s residency under the MERCOSUR agreement, you need to be a citizen of a state party to MERCOSUR or an associate state. These include Argentina, Brazil, Uruguay, Bolivia, Chile, Peru, Colombia, and Ecuador. As a MERCOSUR state citizen, you can get a single two-year temporary residence permit and apply for permanent residency after two years.

Paraguay doesn’t tax foreign income. The country operates a territorial tax system, which means that only income derived from Paraguay is subject to taxation. Paraguay applies personal income tax on all income derived from the provision of personal services, as well as most capital gains, with the exception of those subject to the tax on dividends and profits.