A Step-by-Step Guide for Expats

Often confused with Uruguay and difficult for many to pinpoint on a map, Paraguay might seem like a strange choice for global citizens who want to establish a second citizenship. But this agriculturally rich and friendly country, landlocked between Argentina, Bolivia, and Brazil, has much to offer those seeking a second passport and a new place to live. Relatively small in South American terms, Paraguay is home to nearly 7 million people.

A former Spanish colony, the country’s official language is Spanish, along with an indigenous tongue called Guaraní, which is spoken by the majority of the population. The capital and largest city in Paraguay is Asunción, which nearly one-third of Paraguayans call home. Here, like the rest of the country, the climate is hot and humid, with temperatures reaching 86-95°F on hotter days. Thanks to this weather, the country has a strong agricultural sector, as well as a large mineral industry and plenty of pharmaceutical production and manufacturing.

Wanting to attract talent and investment, the government of Paraguay introduced a number of changes in their immigration laws over the past decade, making it easier for foreigners to of all stripes obtain residency and eventually citizenship in the country. Let’s take a look at a few reasons why becoming a Paraguay citizen could be the right choice for those who want to get a second passport, establish an offshore business, or just retire in style.

Benefits of Establishing Citizenship in Paraguay

1. Laid-back Lifestyle

If you are looking to relocate to Paraguay, you should know that it is consistently ranked as one of the happiest countries in the world. The endless hours of sunshine and good weather, a laid-back attitude and beautiful scenery may be just a few things that contribute to Paraguayans’ happiness. While Paraguay isn’t on top when it comes to quality of life by economic standards, such as GDP per capita, access to services and financial well-being, people simply report being happy. Expats in Paraguay particularly appreciate the relaxed atmosphere, where life takes on more of a flow compared to the endless rush that many developed economies experience. Plus, the stress levels are significantly lower in Latin America in general, compared to the North.

2. Affordable Cost of Living

The happiness levels may have something to do with a very affordable cost of living in Paraguay. While local salaries may not be very high – the current minimum wage sits around $350 per month – digital freelancers and retirees will get a lot bang for their buck (or euro). Expats report that a couple can comfortably live on $1000-$1500 per month. According to Expatistan.com, Asunción has one of the lowest costs of living of any Latin American capital.

3. Tax Benefits

Besides being a pretty cheap place to live, Paraguay also has one of the lowest taxation rates in the world. In fact, if you are living in Paraguay, you are only taxed on income earned locally, and that at a rate of only 10%. Income from international sources is not taxed at all. Generally speaking, the country is not on the international radar as a tax haven (yet), but it does offer a pretty favorable tax environment. That said, you still need to consider international tax laws and speak to a financial advisor to understand whether you would still be taxed by your government if you are residing in Paraguay.

4. Freedom of Movement

Paraguay’s passport is ranked 31st on the Passport Index and allows visa-free entry to 119 countries. While this is lower than a US passport, which is ranked 3rd and allows visa-free travel to 156 countries, there are a couple of great benefits that come with a Paraguayan passport or ID.

First of all, as a member of Mercosur, Paraguayan citizens can travel to other member countries–Argentina, Brazil, and Uruguay–with only their National Identification Document (DNI in Spanish). No passport required. You can also establish temporary residency and live in any Mercosur country almost immediately–much more easily than would be the case if you were just a US citizen.

5. Minimal Physical Residency

If you are only looking to establish citizenship and not live in Paraguay permanently, then you are in luck because Paraguay does not have a strict “minimal residency requirement,” or how many days per year you need to be present in the country to maintain your resident status.

That said, if you would like to get a citizenship, it is unlikely that you will be granted one if you don’t spend any time at all in Paraguay. Furthermore, if you would like to be a resident for tax purposes, then you need to be in the country for a minimum of 120 days per year.

6. Short and (Relatively) Simple Application

A foreigner from pretty much any country with a clean police record is eligible to obtain both Paraguayan residency and citizenship. In simple terms, all you need to have are government required documents, some money in a local bank account and a proper application procedure.

This is significantly easier than many other countries, which will only grant you permanent resident status if you have a work contract, are married or qualify within some other immigration framework. That said, just like in any other country, applying for residency and citizenship are bureaucratic processes that will require time, investment and preferably a qualified lawyer to guide you through the process.

Establishing Permanent Residency – Step-by-Step

Before choosing to establish residency in Paraguay, you should weigh the benefits and costs of the process. There are many positives to getting a second residency and citizenship, including a new place to live, tax benefits, work and life opportunities and more. But the process, even if comparatively simple, is still a commitment on your part. If you have decided that this is the right decision for you, keep reading for a step-by-step primer on how to obtain permanent residency status in Paraguay–the first step to acquiring Paraguayan citizenship.

Step 1. Gather Required Documents in the US

First of all, you need to gather and legalize your documents at the nearest Paraguayan consulate back home. This includes the following paperwork:

· Birth Certificate legalized with a Hague Convention Stamp (also known as the “Apostille Stamp”)

· Criminal Record – legalized with a Hague Convention Stamp

· Marriage certificates, if applicable (legalized and officially translated)

It is also recommended to obtain a bank reference letter and have it officially translated, as you will be required to open a local bank account once in Paraguay.

In addition to these documents, you must apply for a tourist visa to travel to Paraguay. For this you will need:

· Passport valid for at least 6 months

· Visa request form

· Passport size photo

· Travel itinerary

· A fee of $160.00 US paid in cash or money order to your local Paraguayan consulate

Alternatively, you can get a visa on arrival at the Silvio Pettirossi airport in Asunción. You will need to pay cash for the visa, so make sure to have the funds available upon arrival.

Step 2. Obtain Required Documents from Paraguayan Authorities

Once you have arrived in Paraguay, you will need to obtain a few more documents before you can submit your permanent residency application to the authorities. In general, the best way to complete the process of obtaining these documents and ensuring that you comply with all of the prerequisites is to hire a reputable lawyer to help you through the whole process.

Beware, however, there are many scammers who target expats seeking residency status. It’s best to go with a recommended “fixer” or a reputable immigration law firm that specializes in the permanent residency application process. A good “fixer” will help streamline the process, but given the high demand for their services, it’s best to have as many documents as possible ready to go before you contact them.

At this stage, you will need to do the following:

· Open an account at a local bank or the Central Bank of Paraguay and deposit $5,000 USD. You can withdraw the entire sum once the residency process is complete, however, keep in mind that you should allow at least 6 months to complete the entire process. Once you have opened the bank account, the bank will issue a receipt confirming this. Be sure to keep this receipt. You will need to submit a certified copy with your residency application and you will need the original in order to get your money back.

· Get 6, 2.5×2.5 color photos for IDs

· Obtain a residency application form

· Visit the National Police Department headquarters and register as a foreigner

· Obtain an Interpol certificate issued by the regional office in Asunción

· Get a medical exam and a certificate stating that you are of sound mental health and do not have any infectious diseases

· Obtain and sign an affidavit confirming that you will abide by the laws of the country signed by a notary public

While it is possible to obtain all of these documents in only a few days, it is best to budget a couple of weeks in Paraguay, as there could be possible delays in receiving all of the documentation that you need for the application.

Step 3. Submit Your Application with the Paraguayan Government

Once you have gathered all of the required documents, you need to submit these, along with your passport – it must have proof of legal entry into the country and valid visa – to the General Migration Directorate. In addition to all of the documents, you will also need to pay fees of approximately $250 USD, plus any costs associated with stamps, translations, lawyers fees, legalizations and more.

Step 4. Receive Your Local Identification Card and Enjoy Paraguay

After you submit the application, you can leave the country. You don’t actually need to be in Paraguay to physically pick up the permanent residency card and can give a power of attorney to your lawyer for this part of the process. The process of approving your residency application can take up to 90 days and the Paraguayan government could potentially ask you to submit further documents. After having obtained your permanent residency, you can also apply for the national identification card (DNI in Spanish). This will take another 1-2 months to process.

Now, you officially have the status of a permanent resident in Paraguay. In order to maintain your permanent residency status, you will have to visit Paraguay at least once every three years. To obtain citizenship, you will need to wait 3 years before applying, and you must spend at least 6 months of every year in Paraguay in order to be eligible to apply. However, you can now legally work in the country, enjoy the low taxes and take advantage of the many other benefits that Paraguay has to offer.