Moving to Paraguay in 2026: 0% Foreign Tax, $5,000 Residency & $450 Asunción Rent

Paraguay just posted 6.6% GDP growth in 2025 - the strongest in South America - while offering a 0% tax rate on all foreign income, permanent residency for under $5,000, and a modern apartment in Asunción for $450/month. The IMF forecasts 4.2% growth for 2026. This is everything you need to know before you move.^[1][2][3][4]

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The Economy: Eyes Open

The numbers are real. Paraguay's GDP grew 6.6% in 2025, beating both the World Bank forecast of 5.5% and the IMF projection of 5.3%. For 2026, the IMF places Paraguay at 4.2% growth - first in South America, ahead of Argentina (3.5%), Brazil (1.9%), Chile (2.4%), and Uruguay (1.8%). The fiscal deficit fell from 4.1% of GDP in 2023 to 2.0% in 2025, and public debt stands at 41.3% of GDP - among the lowest in Latin America.^[3][4]

Inflation closed 2025 at 4.1%, with the Banco Central del Paraguay (BCP) targeting 3.5% by end-2026. The Guaraní has remained relatively stable; the exchange rate runs approximately PYG 7,900 per euro and PYG 7,600 per US dollar. Three rating agencies - S&P, Moody's, and Fitch - all rate Paraguay investment grade.^[5][6][4]

The economy runs on agriculture (soy, beef), hydroelectric energy (the Itaipú dam is one of the world's largest), and a growing re-export trade. For expats, none of this is the point. The point is that Paraguay runs a strictly territorial tax system, one of the simplest residency programs on earth, and costs roughly 60% less than Western Europe or North America.^[7][1]

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Visas and Residency: What Changed in 2026

Visa-Free Entry

Citizens of over 143 countries - including the US, Canada, the UK, all EU member states, Australia, Japan, South Korea, Israel, South Africa, and the UAE - enter Paraguay visa-free for 90 days. The 90-day stay is extendable once for another 90 days at the Dirección Nacional de Migraciones (DNM) in Asunción for approximately $50-100. You can apply for residency from inside the country on a tourist entry - no consulate visit required.^[1]

Temporary Residency (Standard Route)

The standard path starts with a 2-year temporary residency permit, which converts to permanent residency after the first two years. Required documents:^[8][1]

• Valid passport (minimum 6 months remaining validity)
• Apostilled birth certificate (with both parents' names)
• Apostilled criminal record certificate from your country of origin, plus any country where you have lived for more than one year in the last three years
• Civil status certificate (marriage, divorce, or death of spouse if applicable)
• Local Interpol background certificate (obtained in Asunción after arrival)
• Local Police "Antecedentes para Extranjeros" certificate (obtained in Asunción)
• Proof of economic solvency (~$5,200 equivalent, demonstrated via bank statements or pension income)
• Medical certificate (obtained locally from a Paraguayan doctor, ~$20-50)

All foreign documents require a Hague Apostille plus sworn Spanish translation by a Supreme Court-registered translator (done in Paraguay). Processing: 45-90 days; high demand in 2025-2026 has pushed some applications toward 90-105 days.^[8][1]

Total cost for the standard route: $2,000-$4,000 all-in (government fees ~$250-425, apostilles $100-500, optional lawyer/facilitator $1,000-2,000, local clearances ~$50-100).^[1]

Permanent Residency

After two years on temporary status, you upgrade to permanent residency - valid indefinitely, with ID renewal every 10 years. The upgrade requires similar documentation plus evidence of active economic solvency under the new Resolution DNM Nº 407/2026, which took effect on 6 July 2026.^[9][10][11]

The headline change from 407/2026: passive documentation is no longer enough. The new framework establishes 12 solvency categories - professionals, employees, self-employed, remote workers, shareholders, retirees, and others - each with specific required evidence. Key implications by applicant type:^[11][1]

• Employees: IPS (social security) registration and a Ministry of Labor-confirmed employment contract
• Self-employed / freelancers: RUC (tax ID) registration plus three months of IVA (VAT) declarations - meaning your RUC must be active at least 4 months before applying
• Digital nomads / remote workers: Foreign income still accepted, but must be documented with employment certificates, proof of contractual relationships, and evidence of received payments - all apostilled and translated
• Retirees / pensioners: Pension statements remain valid; this group is least affected
• Property owners / investors: Ownership documentation and proof of income from assets

Practical implication: if you plan to apply for permanent residency via the self-employed or digital nomad route, get your RUC in year one of temporary residency to build up the required IVA filing history.^[1]

Fast-Track Routes

SUACE (Investment Route): Register a Paraguayan company through the SUACE system (Sistema Único de Apertura y Cierre de Empresas) with a phased $70,000 commitment over 10 years. This bypasses the two-year temporary phase and grants immediate permanent residency, with processing in 1-6 months. Upfront cost: $10,000-$15,000 for company formation plus the phased investment.^[1]

Investor Pass (April 2026): The brand-new Paraguay Investor Pass, launched April 17, 2026 under Resolution 0283/2026, grants immediate permanent residency through real estate, financial instruments, or tourism projects with a minimum investment of $150,000. No employment generation requirement (unlike SUACE), making it the natural fit for passive investors and property buyers. As a newly launched program, procedures are still being refined - legal guidance is strongly recommended for early applicants.^[12][1]

Citizenship and Passport

Paraguayan citizenship is available after just 3 years of total residency through a naturalization process. Requirements include basic conversational Spanish, a short cultural knowledge test, and proof of good conduct. Paraguay's constitution formally requires renunciation of original citizenship, but in practice authorities do not actively verify whether applicants retain their original nationality - many naturalized citizens hold de facto dual citizenship. The Paraguayan passport grants visa-free or visa-on-arrival access to more than 141 destinations, including all Schengen countries and the United Kingdom.^[7][1]

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Cost of Living: The Real Numbers

A comfortable expat lifestyle in Asunción costs $1,200-$1,800/month including rent, utilities, food, transport, and leisure. Budget living (smaller apartment, home cooking, public transport) is achievable for $800-$1,000/month. Cost of living rose 29.4% in local currency over the five years from 2021 to 2026 - Asunción is no longer as cheap as it was, but it remains roughly 60% below Western European and US levels.^[13][14][1]

Rent by City (2026)

Sources: EasyParaguay, Paraguay Strategy, expatsettle.com, 2026^[2][15][13]

Daily Expenses

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Taxes: What You Actually Pay

The Territorial System

Paraguay runs one of the world's most straightforward territorial tax systems, established under Ley N° 6380/2019 (Modernización y Simplificación del Sistema Tributario Nacional). The principle is simple: only income sourced within Paraguay is taxable in Paraguay. Foreign-sourced income - freelance fees from overseas clients, dividends from foreign companies, capital gains on foreign stocks or crypto, rental income from foreign property, remote employment income from a foreign employer - is 0% taxed in Paraguay, permanently, with no conditions and no minimum stay requirement.^[16][7]

Rates on Paraguay-Source Income (2026)

For most expats living on foreign pensions, remote salaries, or international investment income, the effective Paraguayan tax rate on their primary income is zero.^[18][7]

What This Doesn't Do

Paraguay's territorial system determines what Paraguay taxes you on. It does not automatically cancel obligations in your home country. The impact depends on your citizenship and home country rules:^[7]

• Residence-based countries (most of Europe, UK, Canada, Australia): Formally ceasing home-country tax residency and establishing it in Paraguay typically stops home-country taxes on foreign income. Formal deregistration or treaty use may be required.
• Citizenship-based taxation (United States, Eritrea): US citizens owe US taxes on worldwide income regardless of where they live. Paraguayan residency does not exempt Americans from US obligations, though Foreign Earned Income Exclusions and Foreign Tax Credits may apply.
• Exit taxes: Germany, the Netherlands, and several others impose exit taxes when formally leaving. Advance planning is essential.

Always consult a cross-border tax advisor who understands both Paraguayan law and your home country's rules before making structural decisions.^[7]

For Business Owners: The EAS Structure

Many entrepreneurs combine Paraguayan residency with a local company structure - the EAS (Empresa por Acciones Simplificada). A Paraguayan EAS providing services exclusively to foreign clients benefits from the same territorial principle: the 10% corporate tax applies only to Paraguay-source revenue. The EAS also enables a Paraguayan corporate bank account and clean invoicing of international clients.^[7]

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Healthcare: Public vs. Private

The Public System (IPS and SNS)

Paraguay's public healthcare is provided through the IPS (Instituto de Previsión Social, covering formally employed workers) and the SNS (Sistema Nacional de Salud, general public coverage). Once residency is granted, expats gain access to public services, including free emergency care and basic vaccinations.^[1]

The honest picture: public hospitals are underfunded and overstretched. Quality is variable, English-speaking staff are rare, and wait times can be long. Most expats use the public system for emergencies only and pay out-of-pocket for anything requiring speed or specialist care.^[19]

Private Healthcare

Private medicine in Paraguay is genuinely affordable. A specialist consultation costs $15-40; emergency consultations run $50-80. Top private facilities in Asunción include Hospital Privado Francés, Centro Médico La Costa, Hospital Bautista, and Hospital Migone. English-speaking doctors are available at several major private clinics.^{[20][15][21][13]}

Private insurance for an adult (30-45 years old) runs $45-80/month; a family of two adults and one child pays $130-200/month. International health insurance with medical evacuation coverage costs $150-400/month - strongly recommended for non-residents and those with complex medical needs.^[13][20]

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Safety

Paraguay holds a US State Department Level 1 advisory - "Exercise Normal Precautions" - one of only two South American countries with this rating alongside Argentina. The 2025 Global Peace Index ranks Paraguay 75th globally and 4th safest in South America. The homicide rate declined from 7.8 per 100,000 in 2021 to 6.2 per 100,000 in 2023 - lower than Uruguay (11.2), Brazil (21.1), and Colombia (25.4), and comparable to Chile (6.7).^[20]

Numbeo's Crime Index for Asunción sits at 56.2, placing it 20th safest among South American cities. Crime trends are improving: robberies fell 11% and thefts declined 15% in 2024-2025.^[20]

City-Level Safety

Safe neighborhoods in Asunción: Villa Morra, Carmelitas, Recoleta, Manorá, Las Lomas, Las Mercedes. These areas have private security, well-lit streets, and active expat communities.^[20]

Areas to avoid: Centro at night (deserted after business hours), Chacarita and Bañados (informal riverside settlements), and Ciudad del Este (high-risk tri-border zone with organized crime).^[20]

Practical Risks

The main risks for expats in Paraguay are petty crime (phone snatching by motochorros on motorcycles, pickpocketing in markets), poor road safety (22.6 road deaths per 100,000 - 78% involving motorcycles), dengue fever (endemic year-round, peaking October-April), and bureaucratic corruption (Transparency International CPI: 24/100).^[20]

Use Uber or Bolt rather than taxis, choose gated accommodations in safe neighborhoods, use DEET repellent daily, and always request an official police ticket (boleta) at traffic stops rather than paying informal "fines".^[20]

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English in Everyday Life

English fluency in Paraguay is limited compared to countries like Romania, Singapore, or the Netherlands. In Asunción's expat zones - Villa Morra, Carmelitas, Recoleta - you can navigate daily life in English, particularly in international restaurants, expat-facing services, and private clinics. Outside these neighborhoods and in government offices, Spanish (and often Guaraní, Paraguay's co-official indigenous language) is required.^[21][22]

The practical reality: learning basic Spanish significantly improves daily life, administrative processes, and social integration. Immigration appointments, banking setup, and most government interactions are conducted entirely in Spanish. Basic Spanish in 3-4 months of consistent study (Duolingo, formal classes) is achievable and pays dividends immediately.^[1]

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Which City?

Asunción

The capital and economic hub. Home to the largest expat community (40,000+ internationals by 2026), the best healthcare infrastructure, the fastest internet, and the only real network of coworking spaces. Quality private clinics, bilingual international schools, shopping malls, and a growing restaurant and café scene are concentrated in the northern neighborhoods. Numbeo cost index: 100 (baseline for comparison). Best for digital nomads, families, professionals, and anyone who needs access to business infrastructure.^[15][21]

Best expat neighborhoods: Villa Morra (commercial hub, walkable, nightlife), Carmelitas (upscale, safe at nearly any hour), Recoleta (quietest, most luxurious, gated buildings), Las Lomas (embassies, gated communities), Manorá (river views, high expat concentration).^[15][20]

Encarnación

Paraguay's "Pearl of the South" and its safest major city. Sits on the Paraná River facing Argentina, with a beach (Costanera), a clean organized riverfront, and a cost index approximately 25% below Asunción. Growing expat scene. Excellent for families and retirees. The main drawback: 365km from Asunción (6-7 hours by bus), limited coworking, and complex medical cases requiring specialist care mean a trip to the capital.^[15]

San Bernardino

Premium lakeside town on Lake Ypacaraí, 45 minutes from Asunción. Weekend destination for the Asunción elite. Low crime, well-maintained infrastructure, peaceful. Best for lifestyle-focused expats who want proximity to the capital without living in it.^[15]

Villarrica

University town with deep German heritage in surrounding agricultural colonies. The cheapest expat option: rent from $200/month, total monthly costs under $800-1,000/month possible. Internet is slow (~20 Mbps), English is minimal, amenities are limited. Best for budget retirees, cultural immersion, and those who genuinely want a slower, more rural life.^[15]

City Comparison

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Climate: Subtropical, Not Gentle

Asunción has a humid subtropical climate (Köppen: Cfa) - hot, humid summers and mild winters, with rain throughout the year.^[23][24]

The hottest month is January (average high 92°F/33°C); the coldest is July (average low 56°F/13°C). Humidity is high from September to May - plan air conditioning into your housing budget (electricity can spike 15% in summer months). No hurricanes, earthquakes, or volcanoes. Paraguay is landlocked with geologically stable terrain - a significant advantage over coastal Latin American destinations.^[25][2][20]

Best months for scouting visits: April-June and August-October - cooler, drier, manageable heat.^[26][27]

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Internet and Remote Work Infrastructure

Fiber optic coverage in Asunción has expanded significantly. In 2026, central neighborhoods (Villa Morra, Carmelitas, Recoleta) have fiber connections running 100-300 Mbps from providers including Personal, Claro, and Tigo. Home fiber costs approximately $25-35/month. Average national broadband speed is around 45 Mbps - reflecting the coverage gap between Asunción and smaller cities.^[28][13][15]

Coworking spaces in Asunción include Loffice, Regus (World Trade Center), and Dendritas. Outside the capital, internet reliability drops sharply - Encarnación has good connectivity in the centre (50-100 Mbps), while Villarrica averages ~20 Mbps. Starlink is available as a backup for those in rural areas or smaller towns.^[29][15]

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Buying Property

Foreigners have equal property ownership rights as Paraguayan citizens under Law 117/91 - no special permits, no local partner requirements, no residency needed to purchase. You can buy on a tourist visa, own multiple properties, and buy through a company (SRL/SA) for asset protection.^[17]

One restriction: Law 2532/05 limits citizens of bordering countries (Argentina, Brazil, Bolivia) from buying land within 50km of the border. For non-bordering nationals (US, EU, etc.), the restriction is procedural - a Ministry of Defense permit is required for border-zone rural land, but this doesn't affect Asunción property.^[17]

Property Prices by Neighborhood (Asunción, 2026)

A modern 2-bedroom in Villa Morra costs $120,000-200,000. Entry-level apartments in Lambaré or Luque start at $40,000-60,000.^[17]

Buying Costs and Taxes

Annual property tax is officially 1% of cadastral value, but since cadastral values lag far behind market prices, the effective annual rate is approximately 0.1% - among the lowest in the world. A $100,000 apartment typically pays $100-300/year in property tax.^[17]

Gross rental yields: 5-7% in Villa Morra, 8-10% in Lambaré and Luque, 2-3x long-term income for Airbnb in premium areas. Mortgage financing for foreigners is difficult; most expat purchases are cash transactions.^[17]

Important: Buying property in Paraguay does not automatically grant residency or citizenship.^[17]

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Banking

The sequence is non-negotiable: residency first, then cédula (national ID), then bank account. Without a cédula, most Paraguayan banks will not process an application.^[30]

The most expat-friendly banks are Banco Continental and Banco Itaú. Others working with foreigners include Atlas, GNB, Sudameris, and Banco Regional. Documents required: valid cédula, passport, proof of income, and documented proof of source of funds (the critical hurdle - banks are tightening KYC standards).^[30][21]

Most banks open a Guaraní account and a USD account simultaneously. Monthly fees run $5-15; debit cards are included. Internal KYC review takes 3 days to 2 weeks. SWIFT transfers to and from Europe carry reasonable fees. The standard route for international income is: wire transfer from your international business account (e.g. Revolut Business) to your Paraguayan USD account.^[30]

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Your First 90 Days: The Checklist

1. Arrive visa-free - citizens of 143+ countries, including EU, US, UK, Canada, Australia, get 90 days on arrival^[1]
2. Prepare apostilled documents at home before travel: birth certificate, criminal records, civil status docs - each apostilled and ready for sworn translation in Paraguay^[8]
3. Days 1-7 in Asunción: obtain local Interpol certificate ($10-20), Police "Antecedentes" certificate, medical certificate ($20-50) - all required for the residency file^[1]
4. Submit at DNM (Dirección Nacional de Migraciones, Asunción, weekdays 7AM-1PM): pay government fees ($250-425), receive your Residencia Precaria (90-day provisional permit), allowing legal stay during processing^[1]
5. Consider hiring an immigration lawyer ($1,000-2,000) - high 2025-2026 application volumes mean timelines are tight; a lawyer typically halves the time^[1]
6. Return for cédula once approval arrives (45-90 days) - this is the key that unlocks banking, property purchases, and tax registration^[30]
7. Obtain your RUC (tax ID) at the SET - even with 0% foreign income, registration confirms tax residency status and is required for banking and any local business activity^[7]
8. Open a bank account at Banco Continental or Itaú with your cédula, passport, and source-of-funds documentation^[30]
9. If applying for permanent residency as a freelancer or digital nomad: start RUC and IVA filings in year one to meet the new 407/2026 active-income requirement^[10]
10. Monitor DNM updates - the immigration framework is evolving rapidly; Resolution 407/2026 took effect July 6, 2026, and further clarifications are expected^[11]

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Key Data at a Glance

Paraguay's 2026 position is the opposite of most expat destinations on the rise: the macro fundamentals are strong, the residency program is still cheap and accessible (though tightening), and the cost base hasn't caught up with Western alternatives. The expats arriving now are building tax residency and asset bases before the next wave of price normalization closes the gap.

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References

1. Paraguay Residency 2026: Expat Guide to 0% Tax Freedom - This guide shows you exactly how to secure Paraguay residency and take advantage of 0% tax on foreig...

2. Cost of Living in Asuncion, Paraguay 2026: What to Expect for Rent ... - How much does it cost to live in Asuncion in 2026?Rent, utilities, internet, food, transportation, a...

3. IMF on X: "South America IMF 2026 growth forecast: 🇦🇷 Argentina: 3.5% 🇧🇴 Bolivia: -3.3% 🇧🇷 Brazil: 1.9% 🇨🇱 Chile: 2.4% 🇨🇴 Colombia: 2.3% 🇪🇨 Ecuador: 2.5% 🇵🇾 Paraguay: 4.2% 🇵🇪 Peru: 2.8% 🇺🇾 Uruguay: 1.8% 🇻🇪 Venezuela: 4.0% https://t.co/gXRSM9o7vb https://t.co/b8UleFKVg0" / X

4. Rik van Amelsvoort's Post - LinkedIn - Paraguay's real GDP growth reached 6.6% in 2025, exceeding both the World Bank's January 2026 foreca...

5. Paraguay Leads South America Growth in 2026; US Deportees Arrive - IMF forecasts Paraguay at 3.8% GDP growth vs. 1.8% regional average. S&P, Moody's & Fitch all rate i...

6. Paraguay Tax Guide 2026 | 8-10% Income Tax, 100% Territorial - Foreign Income Completely Exempt - Paraguay taxes only local income at 8-10%. Foreign income is 100% exempt with no conditions. Easy re...

7. Paraguay Territorial Tax 2026: Pay 0% on Foreign Income - Paraguay's territorial tax system means 0% tax on all foreign-sourced income - from freelance work, ...

8. Required Documents for Paraguay Residency 2026: Updated List - Detailed guide of all documents needed to obtain your residency in Paraguay in 2026. Avoid common mi...

9. Permanent Residency Paraguay 2026: Requirements ... - ↳Valid passportWith at least 6 months of recommended validity. Copy of used pages. ... ↳Certificate ...

10. Paraguay's New Residency Solvency Rules Take Effect - From 6 July 2026, Paraguay permanent-residency applications follow Resolución DNM 407/2026: twelve s...

11. Paraguay: Economic Solvency Requirements Updated for ... - It establishes 12 economic solvency categories, such as professionals, employees, self-employed indi...

12. Paraguay Permanent Residency: DNM 407/2026 Update - What resolution DNM 407/2026 changes for obtaining permanent residency in Paraguay: proof of solvenc...

13. cost of living asuncion 2026 - EasyParaguay - Cost of Living in Paraguay (2026) | EasyParaguay Practical Guide · 2026 Cost of Living in Paraguay (...

14. Is Asunción Still Cheap in 2026? Real Cost of Living in Paraguay - We’ve helped hundreds of people achieve true freedom - 0% taxes, 0 stress, and global mobility.
    👉 ...

15. Best Places to Live in Paraguay 2026: City Comparison Guide for ... - Compare Asuncion, Encarnacion, Ciudad del Este, and more. Find the perfect city for your budget and ...

16. Paraguay Tax System: Complete Guide and 2026 Rates - Territorial taxation means that only Paraguayan-source income is taxable. Income originating from ab...

17. Buying Property in Paraguay 2026 | Expat & Investor Guide - How to buy real estate in Paraguay as a foreigner. Prices by neighborhood, legal process, taxes, clo...

18. Paraguay Territorial Tax Guide 2026 | 0% on Foreign Income - Paraguay territorial tax system explained: 0% tax on qualifying foreign-source income, low tax on Pa...

19. Living in Paraguay - Complete 2026 Guide for Expats - Everything you need to know about living in Paraguay as an expat. Explore the cost of living, health...

20. Is Paraguay Safe in 2026? City-by-City Crime Data + Expat Guide - Paraguay safety in 2026: homicide 6.2/100k, US Level 1 advisory, 75th on Global Peace Index. City-by...

21. Living in Paraguay 2026: The Complete Expat Guide - Everything you need to know about living in Paraguay in 2026: cost of living, residency process, bes...

22. Life in Paraguay: Best Places, Cost of Living & Expat Tips - Paraguay is one of Latin America’s most underrated destinations. Low cost of living, minimal bureauc...

23. Asunción, Paraguay Climate - Climate of Asunción, Paraguay. Information regarding Asunción climate zones and historical climate d...

24. Weather Overview of Asunción, Paraguay - Discover the comprehensive climate chart for Asunción, Paraguay. Get detailed insights into the weat...

25. Asunción Climate, Weather By Month, Average Temperature ... - Discover the year-round climate in Asunción, from muggy, hot summers to short, mostly clear winters,...

26. Climate in Asuncion, Paraguay

27. Asuncion Weather & Climate | Year-Round Guide with Graphs - Explore Asuncion's weather and climate with detailed graphs on temperatures, rainfall, and sunshine....

28. Broadband Speed and Internet Usage Statistics in Paraguay (2026) - An overview of Paraguay's broadband speeds and internet usage statistics projected for 2026, highlig...

29. Internet in Paraguay (2026) | Speeds, Cost & Remote Work - Internet in Paraguay: fiber speeds and costs (Personal, Claro, Tigo), Starlink, 5G, mobile data, and...

30. Bank Account Paraguay for Foreigners: Guide - Cédula, KYC, proof of funds - what you really need to open a bank account in Paraguay.

Frequently Asked Questions

What are the primary visa and residence options for moving to Paraguay in 2026? Citizens of over 143 countries - including the US, Canada, the UK, all EU member states, Australia, Japan, South Korea, Israel, South Africa, and the UAE - enter Paraguay visa-free for 90 days.

How does personal income tax work for expats in Paraguay? For most expats living on foreign pensions, remote salaries, or international investment income, the effective Paraguayan tax rate on their primary income is zero.

What is the average cost of rent and living in Paraguay? A comfortable expat lifestyle in Asunción costs $1,200-$1,800/month including rent, utilities, food, transport, and leisure.

How many years of residence are required for citizenship or permanent residency in Paraguay? Paraguayan citizenship is available after just 3 years of total residency through a naturalization process.

Cover photo by Maurício Guardiano on Pexels.