Does Paraguay tax foreign income?

Not taxed (territorial). In one line: 0% on foreign income · 10% on local income · 8% on local dividends.

Can I run an online business from Paraguay?

Effective tax about 0% with the cheapest legal set-up, which costs about USD 600 a year: a US LLC (Wyoming/New Mexico) invoices foreign clients; pay yourself a modest salary; IRP 8-10% only on what is left after deducting personal costs (food, rent, health, education), so ~0.

What is the catch in Paraguay?

A tax residence certificate (certificado de residencia fiscal) helps only if you really live there.

What residence or citizenship programmes does Paraguay have?

Temporary then permanent residence (no investment): about USD 2,000 all-in for one person, ~3 months; Investor permanent residence (SUACE, Resolution 283/2026): about USD 75k all-in for one person, ~2 months

Moving to Paraguay: tax, residence and real costs (2026)

Paraguay: 0% on foreign income · 10% on local income · 8% on local dividends. The cheapest route to residence is temporary residence (2 years, Law 6984/2022), then permanent: no investment, proof of solvency only: about USD 600 in fees doing it yourself, with no investment, in about 3 months. Living costs about USD 850 a month for one person in Asuncion, USD 490 in Caaguazu, and around USD 470 on a bare-minimum budget.

Key facts

Tax in one line	0% on foreign income · 10% on local income · 8% on local dividends
Foreign income	not taxed (territorial)
Gains · dividends	local only · 8% from Paraguayan companies to residents (15% non-residents)
Wealth · inheritance tax	none · none (small transfer costs)
Cheapest residence	temporary residence (2 years, Law 6984/2022), then permanent: no investment, proof of solvency only
Money needed	About USD 600 in fees doing it yourself, with no investment
Time	about 3 months
Doable yourself?	Yes, with a checklist
Days you must spend there	no day count in law; keep real ties to be credible
Citizenship	3 years of permanent residence
Online business	0% effective, about USD 600 a year to run: a US LLC (Wyoming/New Mexico) invoices foreign clients; pay yourself a modest salary; IRP 8-10% only on what is left after deducting personal costs (food, rent, health, education), so ~0
Living (one person a month)	Asuncion ~USD 850; bare minimum ~USD 470; family of four ~USD 1,800
Good for	territorial tax; maquila: 1% tax on value added for export manufacturing; cheap hydro power (industrial ~USD 0.05-0.07/kWh); Mercosur market; low land prices; cattle and soy
Common set-up	temporary residence (2 years, then permanent) + cédula + RUC; a US LLC for foreign clients pays you a modest salary; manufacturers: an EAS under maquila

Pros and cons

Pros	Cons
Territorial: foreign income untaxed Cheapest residence route in the Americas Low local tax (10/10/10) Cheap living, land, energy (Itaipú)	Banks wary of foreigners Spanish needed Few direct flights Home countries may not accept a 'paper' residence: live there for real Resolution 407 (2025) tightened the solvency proof

Programmes

Programme	All-in, one person	Months	Notes
Temporary then permanent residence (no investment)	USD 2,000	3	2 years temporary (since the 2022 reform), then permanent. Apostilled birth certificate and police record, health certificate, Interpol . With a gestor USD 1.5-3k; DIY possible in Spanish.
Investor permanent residence (SUACE, Resolution 283/2026)	USD 75k	2	USD 70k productive investment with a business plan; other tracks USD 150k tourism, USD 200k property or financial instruments. Permanent from day one.

Questions

How much does residence in Paraguay cost?: Temporary residence (2 years, Law 6984/2022), then permanent: no investment, proof of solvency only: about USD 600 in fees doing it yourself, with no investment, about 3 months.
Does Paraguay tax foreign income?: Not taxed (territorial). In one line: 0% on foreign income · 10% on local income · 8% on local dividends.
What does it cost to live in Paraguay?: Living costs about USD 850 a month for one person in Asuncion, USD 490 in Caaguazu, and around USD 470 on a bare-minimum budget (based on livingcost.org, 2026).
Can I run an online business from Paraguay?: Effective tax about 0% with the cheapest legal set-up, which costs about USD 600 a year: a US LLC (Wyoming/New Mexico) invoices foreign clients; pay yourself a modest salary; IRP 8-10% only on what is left after deducting personal costs (food, rent, health, education), so ~0.
What is the catch in Paraguay?: A tax residence certificate (certificado de residencia fiscal) helps only if you really live there.
What residence or citizenship programmes does Paraguay have?: Temporary then permanent residence (no investment): about USD 2,000 all-in for one person, ~3 months; Investor permanent residence (SUACE, Resolution 283/2026): about USD 75k all-in for one person, ~2 months

Compare

Uruguay: 0% on foreign dividends and interest for 11 years (tax holiday) · up to 36% on local work income
Panama: 0% on foreign income · up to 25% on Panamanian income · 10% on local dividends
Belize: 0% on foreign income · up to 25% on local income
Costa Rica: 0% on foreign income · up to 25% on local income · 15% on local dividends
El Salvador: 0% on foreign income · up to 30% on local income
Honduras (Próspera ZEDE): ~5% on income in the zone · 0% on foreign income

Compare all 53 places with your own income and budget →

Sources

https://www.dnit.gov.py
https://wiki.private.law/en/paraguay-residence
Living costs: based on livingcost.org (livingcost.org, June 2026), rounded