Paraguay for Americans: Complete 2025 Guide
Why thousands of Americans are discovering Paraguay: 0% foreign income tax, $1,500/month living costs, easy residency, and a lifestyle upgrade. Here's everything you need to know.
Why Americans Are Moving to Paraguay
"I was paying $3,500/month rent in Austin, plus taxes eating 30% of my income. Now I live in a luxury apartment in Asunción for $600, my remote income is tax-free here, and I'm using FEIE to exclude it from US taxes too. Same work, 3x the savings."
— American software developer, moved 2024
Massive Cost Savings
- • Rent: $400-800 vs $1,500-3,500 in US cities
- • Healthcare: $50-150/month vs $500+ in US
- • Dining out: $5-15 vs $20-50 in US
- • Total: $1,500-2,500/month for comfortable life
Tax Optimization
- • Paraguay: 0% tax on foreign-source income
- • US FEIE: Exclude $126,500 (2024) of earned income
- • Combined: Many pay $0 in income tax
- • Still file US returns, but often owe nothing
Easy Residency
- • No income requirements
- • No investment required
- • 90-day visa-free entry to start
- • Permanent residency in 3 years
Lifestyle Benefits
- • EST-1 timezone (easy for US work)
- • Warm weather year-round
- • Friendly, welcoming culture
- • Growing expat community
Cost of Living: USA vs Paraguay
| Expense | US (Major City) | Asunción | Savings |
|---|---|---|---|
| 1BR Apartment (nice area) | $1,800-3,000 | $400-700 | 75% |
| Health Insurance | $400-800/mo | $75-200/mo | 80% |
| Dinner for Two | $60-100 | $20-40 | 65% |
| Groceries (monthly) | $400-600 | $200-350 | 45% |
| Gym Membership | $50-150 | $25-50 | 60% |
| Uber (10 min ride) | $15-25 | $3-5 | 80% |
| Domestic Help (weekly) | $150-300 | $30-50 | 85% |
| Total Monthly (Single) | $4,000-6,000 | $1,200-2,000 | 70% |
Tax Strategy for American Expats
Important: US Tax Obligations Continue
Unlike most countries, the US taxes citizens on worldwide income regardless of where you live. You must still file US tax returns annually. However, several provisions can reduce or eliminate your US tax bill.
The Double Tax Advantage
1. Paraguay Side (0% Foreign Income Tax)
Paraguay only taxes income earned inside Paraguay. Your US remote work income, investments, and any non-Paraguay source income = 0% Paraguayan tax. No filing required for foreign income.
2. US Side (FEIE Exclusion)
The Foreign Earned Income Exclusion (FEIE) lets you exclude up to $126,500 (2024) of foreign earned income from US taxes. You must pass either the Physical Presence Test (330 days abroad) or Bona Fide Residence Test.
Example: Remote Worker Making $100,000
| Scenario | Paraguay Tax | US Tax | Total Tax |
|---|---|---|---|
| Living in US (single, no state tax) | N/A | ~$17,400 | $17,400 |
| Living in Paraguay with FEIE | $0 | $0* | $0 |
*Income under FEIE limit ($126,500 in 2024) is excluded. Self-employment tax may still apply. Consult an expat tax professional.
Important Considerations
- Self-employment tax (15.3%) still applies unless you set up a foreign corporation
- Investment income (dividends, capital gains) is NOT covered by FEIE
- FBAR filing required if foreign accounts exceed $10,000 total
- Form 8938 (FATCA) required for specified foreign financial assets
- Always consult an expat tax professional - this is complex and personal situations vary
Residency Process for Americans
What You'll Need
Valid US Passport
At least 6 months validity
FBI Background Check
Apostilled - get from FBI before traveling
Birth Certificate
Apostilled and translated to Spanish
Health Certificate
Obtained in Paraguay (~$50)
Paraguayan Address
Rental contract or letter from host
Timeline & Costs
Timeline: 3-6 months for temporary residency. Permanent residency after 3 years.
Pro Tip: Get FBI Check Before Leaving
The FBI background check takes 8-18 weeks to process. Get it apostilled at the US State Department. This is the one document you can't get in Paraguay, and it's required for residency.
Banking for American Expats
Keep Your US Accounts
Most American expats keep US bank accounts. Recommended options:
- • Charles Schwab: No foreign ATM fees, reimburses all fees globally
- • Fidelity: No foreign transaction fees on debit card
- • Wise: Multi-currency account, great exchange rates
- • Mercury: Good for business accounts
Tip: Keep a US mailing address (family or service like Traveling Mailbox) for banking.
Opening Local Accounts
Paraguayan banks are cautious with new residents. Expect:
- • 6-12 month wait after residency to open account
- • Guaraní accounts only initially (no USD)
- • USD accounts: Require 12+ months of tax activity
- • Alternative: Tigo Money (mobile wallet) works immediately
Many Americans just use Wise + US accounts for the first 1-2 years.
Healthcare for Americans
Quality
Private hospitals in Asunción offer quality comparable to US hospitals. Many doctors trained in US, Brazil, or Argentina. English-speaking doctors available.
Cost Comparison
- • GP visit: $20-40 (vs $150+ in US)
- • Specialist: $40-80 (vs $300+ in US)
- • MRI: $150-300 (vs $1,000+ in US)
- • Insurance: $75-200/mo (vs $400+ in US)
Options
- • Local insurance: ASSA, Patria, or hospital plans
- • International: Cigna Global, Allianz
- • Pay-as-you-go: Many expats just pay cash
Best Private Hospitals in Asunción
Sanatorio Italiano
Most English-speaking doctors, modern facilities
Hospital Privado Bautista
24/7 ER, broad specialties
Sanatorio Santa Clara
Popular with expats, good maternity
Diagnósticos Avanzados
Best for imaging/diagnostics
Common Concerns from Americans
"Is it safe?"
Paraguay has a US Level 1 travel advisory — the safest category, same as France or Germany. It's one of only two South American countries with this rating. In expat neighborhoods (Villa Morra, Recoleta), safety is comparable to nice US suburbs. Standard urban awareness applies.
"Do I need to speak Spanish?"
You can survive without Spanish in expat areas, but it limits you significantly. Most Americans take 3-6 months of classes and reach conversational level. Apps like Preply or iTalki offer affordable tutors. Many expats say learning Spanish was the best thing they did for quality of life.
"What about internet/working remotely?"
Fiber internet (200+ Mbps) is widely available in Asunción for $30-50/month. Multiple coworking spaces exist. Paraguay is in the EST-1 timezone, making it easy to work with US teams — only 1 hour difference from East Coast, same time as Central.
"Can I get Amazon packages?"
Not directly. Options: 1) Use a Miami forwarding service (Courier Box, Aerobox) — ~$8-15/lb shipping, 2) Buy most things locally at Shopping del Sol or Stock, 3) Stock up on US-specific items during visits home.
"What if I need to leave quickly?"
Direct flights to Miami (American Airlines) take about 7 hours. One-way tickets typically $300-600. COPA connects through Panama to many US cities. Maintaining US residency status and bank accounts gives you full flexibility.
American Expat Community
Where Americans Live
- Villa Morra — Most popular for expats. Walkable, restaurants, coworking spaces. $500-800/month rent.
- Recoleta — More upscale, quieter, family-friendly. $600-900/month rent.
- Carmelitas — Nightlife area, younger crowd. $450-700/month rent.
Connect with Other Americans
- Facebook Groups: "Expats in Paraguay", "Americans in Paraguay", "Digital Nomads Asunción"
- Weekly Meetups: English language exchanges, expat happy hours in Villa Morra
- US Embassy Events: 4th of July celebration, Thanksgiving gathering
Frequently Asked Questions
Can Americans move to Paraguay easily?
Yes, Americans can move to Paraguay relatively easily. US citizens get 90-day visa-free entry, and the residency process takes 3-6 months with minimal requirements: no income proof needed, just background check, health certificate, and $5,000-6,000 in fees. Paraguay is one of the easiest countries for Americans to get residency.
Do Americans pay US taxes living in Paraguay?
Yes, Americans must still file US taxes while living abroad. However, using the Foreign Earned Income Exclusion (FEIE), you can exclude up to $126,500 (2024) of foreign earned income. Combined with Paraguay's 0% tax on foreign income, many Americans pay zero or minimal taxes on their remote work income.
Is Paraguay safe for American expats?
Yes, Paraguay is generally safe for American expats. It has a US State Department Level 1 travel advisory (Exercise Normal Precautions) - one of only two South American countries with this rating. Violent crime against foreigners is rare. Standard urban precautions apply.
How much money do Americans need to live in Paraguay?
Americans can live comfortably in Paraguay on $1,500-2,500/month including rent, far less than most US cities. A comparable lifestyle that costs $5,000/month in the US costs $1,500-2,000 in Asunción. Some budget-conscious Americans live on $800-1,200/month.
Can Americans keep their US bank accounts in Paraguay?
Yes, you can keep US bank accounts while living in Paraguay. Many American expats use Charles Schwab (no foreign ATM fees), Wise multi-currency account, and maintain a US address for banking. Opening local Paraguayan accounts requires 6-12 months of residency.
Is there an American expat community in Paraguay?
Yes, there's a growing American expat community, especially in Asunción's Villa Morra and Recoleta neighborhoods. Facebook groups like 'Expats in Paraguay' and 'Americans in Paraguay' have thousands of members. Many Americans are drawn by the territorial tax system and low cost of living.
Do I need to speak Spanish to live in Paraguay?
Basic Spanish is highly recommended. While some Paraguayans speak English (especially in expat areas and private hospitals), daily life, government offices, and most services operate in Spanish. Many Americans take 3-6 months of intensive Spanish before or after arriving.
Can Americans buy property in Paraguay?
Yes, Americans can buy property in Paraguay with the same rights as locals. No restrictions on foreign ownership. Property is affordable: $80,000-150,000 buys a nice apartment in Asunción's best neighborhoods. Many Americans rent first (6-12 months) before buying.
Calculate Your Paraguay Costs
Get a personalized estimate for your situation as an American.
Related Guides
Ready to Explore Paraguay?
Get our complete Asunción settlement guides — everything you need to make the move.