With the E.A.S., fast procedures of a few days up to about a week are possible. Traditional structures and banking processes can extend the overall timeline.
Paraguay is a South American country between Brazil and Argentina with around 7 million inhabitants. The currency is the Paraguayan guaraní (PYG). The country is a member of Mercosur, providing access to key South American markets.
The tax system is often referred to as the “10-10-10 system”. Corporate income tax (IRE) is 10% on Paraguayan-source income. VAT (IVA) is 10% as the standard rate and 5% for certain goods and services. Profit distributions are taxed at 8% (residents) and 15% (non-residents). Personal income tax is capped at 10%.
Paraguay applies the territorial principle. Only Paraguayan-source income is taxable. Foreign income is generally outside the Paraguayan tax base.
The Maquila regime allows taxation at 1% on the value added created in Paraguay or on the export invoice amount, whichever is higher. Free trade zones offer additional operational advantages, particularly regarding VAT.
Common legal forms are the S.A. and the E.A.S. (Empresa por Acciones Simplificada). The E.A.S. is often preferred because it can be incorporated more flexibly and faster. 100% foreign ownership is permitted. In practice, however, a local legal representative is usually required for tax and administrative purposes.
In straightforward cases, incorporation can be completed within a few days to weeks. The bank account is regularly the most time-consuming part, as extensive KYC and source-of-funds evidence is required.
Paraguay is not on the EU list of non-cooperative jurisdictions in 2026. Nevertheless, the tax effectiveness of a Paraguayan structure for EU-resident HNWIs depends largely on a clean relocation of tax residence, effective management and economic substance. Otherwise, the structure may be challenged for tax purposes.
Contact us for an individual analysis and, where appropriate, better alternative solutions.
Paraguay uses the IVA system. Registration is generally straightforward provided you have proper documentation, an RUC number and a clearly traceable business activity. Rates: 10% standard, 5% reduced.
Foreign ownership is possible. In practice, however, a local legal representative is required for tax and administrative purposes.
There are established local and regional banks. Account opening is compliance-heavy. RUC, KYC, source-of-funds evidence and a clear business description are required.
Paraguay is not on the EU list of non-cooperative jurisdictions.
Company formation can be handled via local service providers. Depending on the bank, the bank account may require personal presence or increased substance requirements.
With the E.A.S., fast procedures of a few days up to about a week are possible. Traditional structures and banking processes can extend the overall timeline.
| Tax Burden | Banking | Reputation | Bureaucracy | Legal Security | Costs | |
|---|---|---|---|---|---|---|
| USA | 21-0% |
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from EUR 1,900 |
| Singapore | 0% |
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from EUR 2,950 |
| Hong Kong | 0% |
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from EUR 1,900 |
| Cyprus | 15% |
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from EUR 1,900 |
| Malta | 5% |
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from EUR 2,500 |
| Ireland | 12,5% |
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from EUR 1,950 |
| Trust | 0% |
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from EUR 4,900 |
| England | 25-19% |
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from EUR 1,000 |
Your country of residence may impose tax and reporting obligations for foreign business activities and dividend income — in some cases even if profits are not distributed.
Depending on your personal circumstances, a suitable holding structure may be required to comply with tax rules and avoid unnecessary tax risks.
To determine which jurisdiction and structure best meet your requirements, please use the contact form and describe your plans in as much detail as possible.
Our advisers will be happy to review your case and advise you accordingly.
