This is the ultimate guide to obtaining a residency in the country of Paraguay for digital nomads. Before we dive into this guide for how you can get residency and optimize your tax situation in this country, I do want to note that this was a process I personally did myself in Paraguay.
While this process did take quite a few months, it is very much so worth it. I am glad I took the time and money to do this process so that I could further optimize my taxes as a global citizen and digital nomad. Let’s get started.
I would like to preface that this process will depend on the country that you are from. Your home country, or country of current residence, will require you to obtain certain documents prior to starting the process on the ground in Paraguay.
The temporary residency process for Paraguay is subject to change. Before starting this process, be sure you are up to date with the latest documents from the government that are required.
Alternatively, you can hire a lawyer, who will explain the exact documents that you will need from your home country, and what the process will look like for you.
I personally hired a lawyer to aid in this process on the ground in Paraguay, and I would highly recommend you get a lawyer for this process too.
The first step is to make sure that you get your document from your home country. For me, my country was Canada, if you have not lived in another country for the past few years, then Paraguay will want documents from your home country.
If you have lived in another country for the past 3-5 years (keep in mind this number of years may change in the future), then you will want to get the documents from that country.
What was required of me as a Canadian is typical of most countries. However, the documents needed may change slightly depending on your home country. I needed a criminal background check from the National Police in Canada, which for me was the RCMP. For Americans, it would be the FBI. I also needed my birth certificate.
This was an absolute hassle because, in Canada, we have three different types of birth certificates you can order online. If you need to order a new birth certificate from the Ontario government, you have three options.
The birth certificate, a birth certificate with parental information, and a certified live copy of the birth registration. And of course, I wasn’t sure which option was needed.
After searching online, in Facebook groups, and even calling the Paraguay consulate in Ontario, there was no clear answer. I ended up ordering the latter two options, and it was the live copy of birth registration that was needed (titled a copy of live birth on the actual form).
The next step in the process is to get your documents from your home country apostilled. However, Canada is not a part of the apostille system, and due to this, I had to do two extra steps in order to get my documents verified correctly for Paraguay.
In the end, it took more time and money to ensure that these documents were authenticated properly in Canada.
Once you get these documents back, you will need to send them to the Paraguay embassy in your province where they will legalize these documents.
Once the documents are legalized, you will be able to bring them to Paraguay to start the process on the ground. Note these documents are only valid for six months, so don’t wait too long.
One important thing to note here, that I’m sure you may know if you have looked into becoming a resident or tax resident of Paraguay, is that Paraguay has recently changed its residency program.
Previously you were able to become a permanent resident almost immediately, whereas now you need to be a temporary resident. And after two years of being a temporary resident, then you can qualify to be a permanent resident.
This may change in the future, as many of the lawyers I have spoken to on the ground in Paraguay know that the country and government are always changing their policies, so be aware this may change.
However, as of this writing in mid-2023, the current policy for residency in Paraguay states you will obtain your temporary residence first. Once you have your residency for 2 years, only then can you apply for your permanent residency, which is valid for ten years.
During the two years of your temporary residency, you will need to be present in the country for one day each calendar year. It is recommended to stay in the country for longer than one day, as this also shows the government you have stronger ties to the country. Once you have entered the country consecutively for two years, the next step is to obtain your permanent residence.
Gaining permanent residency means that you only have to come back to Paraguay once every three years and stay in the country for a few days at a time every three years. This is a big reason why there are many expats and foreigners who are going through this process themselves in Paraguay.
This is an important step in the process. When you arrive at the airport in Asuncion, you will need to purchase a visa on arrival to start your residency process.
You will need $150 USD, in new bills, and completely unripped or wrinkled. My $100 bill was slightly ripped at the top, and due to this, they didn’t accept this bill.
If this happens to you, or you didn’t bring enough cash with you, there is a handy ATM machine right beside the visa counter which you can use to withdraw your bills.
At the airport, before you go through immigration (this is important!) you will look for a small desk, with a glass window and two computer screens. It is completely unmarked, but this is where you will go to get your visa on arrival, and get the first step of the residency process started.
The next step in the process once you obtain your documents from your home country, will be to get the process started on the ground in Paraguay.
I used a lawyer to assist with this process, however, you can do this process on your own if you desire, and it will be easier to do on your own if you speak Spanish. Very few locals in Paraguay speak English.
The actual process of submitting the documents for temporary residency is fairly quick. It took a total of three to four hours one Friday afternoon.
We first started at immigration in Paraguay, which is in the downtown central area near the cathedral in Paraguay. You will need to go to immigration, and you will also need to make sure that your documents are translated into Spanish. You will also be going to the police station once this is complete, as well as getting your fingerprints and photo taken.
If you go through a lawyer or a third party who is helping you with the residency process, they will most likely ask you to sign a power of attorney. This is important and you want to ensure any lawyer you are working with does ask you to give them power of attorney.
After a few months’ time, you will receive your cedula, which means that you are a temporary resident of Paraguay.
Lastly, once you go through the process on the ground, you will obtain your temporary residency. You don’t physically need to be in the country or be involved in the application process for the cedula and for your tax ID if you give your lawyer power of attorney. They will be able to apply for your cedula on your behalf without you being in the country.
This entire process costs about $600 USD if you do it on your own in Paraguay. However, if you hire a lawyer it can be anywhere from $1000 to $3000 US dollars on average.
If you are seeking a reputable lawyer to aid you in this process, feel free to reach out to me and I’d be more than happy to provide you with their contact information.
With the temporary residency, you can also apply for a driver’s license in Paraguay.
In many countries, when you give up your residency, they will ask you to renounce most government documents that you, have except for your passport. And oftentimes, this includes your driver’s license.
Of course, you don’t want to be without a driver’s license, so Paraguay does give you the ability to get a driver’s license as a permanent or temporary resident.
While you don’t need to do a driving test at this time, you do need to have a valid driver’s license in your current country.
It’s also important to note that you will need to know your blood type. The government will put your blood type on your driver’s license in case you get into an accident, so be sure that you either have your blood type documented or you can get your blood type taken at a local hospital here in Paraguay.
While Paraguay is a great solution for personal and tax residency, if you have a business online, then you will want to set up your business in another country.
Any money that does come into Paraguay will be taxable at the flat rate of 10%. In order to optimize your tax situation, you want to ensure you have a holistic approach where your business and residency are in different countries. Diversity is key.
If you have any questions about the process or aren’t sure if this is the best setup for you, be sure to contact me and we can discuss this further.
I hope this guide has helped you to navigate the process of residency in Paraguay and answered questions about how you can become a resident in Paraguay and optimize your taxes as a global citizen.
If you want to learn more about becoming a digital nomad, creating a business you are passionate about, global taxes, and entrepreneurship, check out the links below:
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