Question 1

Do I have to live in Paraguay full time?

Accepted Answer

For residency, no. During temporary residency (the first 2 years) you must enter at least once a year. With permanent residency, one entry every 3 years is enough. For later citizenship, however, you should have a genuine center of life in Paraguay, typically 6 to 9 months a year. Note that Paraguayan tax residency is a separate test and generally requires around 120 days a year.

Question 2

How exactly does the tax work?

Accepted Answer

Paraguay has a territorial tax system: only income earned inside Paraguay is taxable (max. 10%). Income from abroad (clients overseas, international platforms or foreign companies) is taxed at 0%. Important: for your income to clearly count as foreign-source, correct structuring matters. Many of our clients use a foreign company structure such as a US LLC. We help you find the right setup for your situation.

Question 3

Do US citizens really pay 0%?

Accepted Answer

No, not automatically. The United States taxes its citizens and green-card holders on worldwide income regardless of where they live (citizenship-based taxation). Paraguay residency does not remove your US filing obligation or tax liability; only renouncing citizenship does, with a possible exit tax. The Foreign Earned Income Exclusion only helps partially. If you are a US person, speak to a US-qualified advisor and read our dedicated US-citizens guide.

Question 4

What does it cost to live in Paraguay?

Accepted Answer

A comfortable lifestyle in Asunción costs roughly $1,200 to $1,700 per month. That includes rent for a modern apartment ($500-800), groceries, internet, transport and leisure. Compared with most major Western cities, you save around 50 to 60%.

Question 5

Do I need to speak Spanish?

Accepted Answer

Not for the residency process. We and our partners on the ground speak English and Spanish. For daily life, some Spanish helps, but many expats get by with English at first. Learning Spanish naturally makes life richer.

Question 6

How long does the whole process take?

Accepted Answer

You typically receive Paraguayan residency with a cédula within 8 to 16 weeks of applying. The standard route runs through temporary residency, which converts to permanent after 2 years. Direct permanent residency is possible in some cases (for example investors) but has higher requirements. You can apply for Paraguayan citizenship after 3 years of permanent residency, so usually around 5 years after your first cédula. Citizenship requires basic Spanish and some knowledge of Paraguay's history and civics.

Question 7

What about health insurance?

Accepted Answer

Paraguay has good private clinics (Sanatorio Migone, Hospital Italiano). International health insurance for expats runs roughly $110 to $440 per month depending on age and coverage. Local policies with providers such as Asismed or Migone Salud start at around $110 per month.

Question 8

Can I retire to Paraguay?

Accepted Answer

Absolutely. Paraguay is popular with retirees. Thanks to the territorial tax system, a foreign pension is treated as foreign income and taxed at 0% in Paraguay in principle. Whether your home country still taxes that pension depends on its own rules, so check your side too. The low cost of living makes for a relaxed retirement.

Question 9

Is Paraguay safe?

Accepted Answer

Asunción is considered one of the safest capitals in South America. As anywhere, take normal precautions, but the crime rate is significantly lower than in many other Latin American metros.

Question 10

Do I need to worry about my home country's tax?

Accepted Answer

Possibly. Your home country may tax you until you properly break tax residence there, and some countries have exit taxes or trailing-tax rules on business owners. This is separate from Paraguay's 0% and needs to be checked in your jurisdiction. We help with the Paraguay side and can point you to a qualified advisor for your home country.

Question 11

How can I pay?

Accepted Answer

You pay by bank transfer in USD (also internationally via Wise) or with crypto stablecoins (USDC/USDT, handled via Kast, no surcharge). Typically 50% on order and 50% when you receive your cédula, never everything up front. Government fees are billed separately. Our money-back guarantee applies if you are refused through no fault of your own. Full details are on the Payment page.

Yannick Schroth

From digital nomad to Paraguay adviser

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