Paraguay 2026: 0% on foreign capital income, in a country with easy residency

Paraguay has applied a strictly territorial system since Law 6380/2019: only Paraguayan-source income is taxed. Foreign-source ETF dividends and capital gains therefore come out at 0%. By comparison, a typical Western investor pays roughly 25% to 35% on the same capital income. Source: PwC Worldwide Tax Summaries 2026.

Yes, as long as they are foreign-source and you are a Paraguayan tax resident. Only Paraguayan dividends (IDU at 8%) and local-source capital gains (IRP-RGC at 8%) are taxed. Paraguayan tax takes nothing from a dividend on an ETF listed abroad, nor from the gain on selling it. Source: Law 6380/2019 and PwC 2026.

No. Paraguay has neither a wealth tax nor inheritance tax in the direct line. Wealth passed to children carries a 0% succession burden, whereas many Western countries tax estates or net wealth, sometimes at high marginal rates. Source: PwC 2026.

Paraguay has no double-taxation treaty with the United States. If your portfolio holds US shares or ETFs, the US withholding tax on US dividends (often 30%) applies and is not creditable in Paraguay, since Paraguay levies no tax on that income. An investor heavily exposed to US securities therefore loses part of the benefit of the 0% territorial rule. Source: tax treaties, 2026.

The most common route is two-year temporary residency, which has no income threshold: apostilled civil-status documents and criminal-record checks, plus a sworn statement of your occupation and address. The 5,000 USD bank deposit once required was removed by Law 6984/2022. After two years, this temporary residency converts to permanent residency on proof of solvency (DNM Resolution 407/2026: a pension, property in Paraguay or shares in a Paraguayan company). Since portfolio income is not on the list, a retiree without a pension in practice goes through local property, a Paraguayan company or the Investor Pass. Source: Law 6984/2022 and DNM Resolution 407/2026.

Yes. The new Investor Pass, launched in April 2026 (investment verified through SUACE), delivers a ten-year permanent residency directly: from 200,000 USD in Paraguayan financial securities held for at least 2 years or in real estate for economic use, 150,000 USD in tourism, or 70,000 USD of productive investment with at least 5 formal jobs and a business plan. This route suits those who want to skip the two-year temporary stage. Source: Paraguay Pathways 2026 and GoParaguay 2026.

The cost of living is one of the lowest in Latin America, with an index around 32. A three-bedroom flat in the city center rents for about €1,050 a month, dinner for two comes to €29, and a pint is €1.50. A Lean FIRE can live comfortably on a budget that most Western countries would not allow. Source: cost-of-living indices 2026.

Relatively, yes. The guarani floats freely, with no exchange controls, under the central bank's inflation targeting (3.5% target), with volatility around 8% and controlled inflation near 4% in 2025, at about 6,820 PYG per euro. It has, however, appreciated sharply: from 8,068 PYG per dollar at the April 2025 peak to 5,926 in September 2026. For an investor whose income arrives in euros, this appreciation makes life on the ground pricier: exchange-rate risk is moderate for the region, but very real. Source: Banco Central del Paraguay, 2026.

It ranks 64th out of 163 on the 2026 Global Peace Index (score 1.882), a decent level for Latin America and better than several neighbors. Asuncion concentrates the expatriate community. Usual caution still applies, but the security risk is not the main obstacle for an expatriate. Source: Institute for Economics and Peace, Global Peace Index 2026.

Yes, these are the real weak points. The public health system is limited: expatriates rely on private clinics in Asuncion and on international insurance. Education is one of the country's weak spots, with a 2025 PISA mean of 347 (334 in math, 352 in reading, 355 in science), among the lowest measured. It is a major drawback for a family with school-age children. Source: PISA 2025.

No. Paraguay is landlocked, with no access to the sea and not a single beach. Daily life is continental, around Asuncion and the Paraguay and Parana rivers. Anyone dreaming of coastal living should look elsewhere: here the trade-off is about taxation, cost of living, and ease of residency, not the postcard. Source: national geography, 2026.

The territorial system does not waive every formality: an annual filing obligation on the origin of funds remains, and you must establish genuine tax residency (more than 120 days a year on the ground). The territorial status protects foreign income, but compliance with local rules and documentation of flows remain essential. To be confirmed with a Paraguayan adviser. Source: Paraguayan tax authorities, 2026.