Paraguay vs Costa Rica
Compare Paraguay and Costa Rica for expats. Cost of living, taxes, residency, and lifestyle. Which Central/South American country is better?
Costa Rica has long been a favorite for American expats seeking tropical living. Paraguay has emerged as an alternative with better tax treatment and lower costs. Both offer distinct advantages: Costa Rica has natural beauty, established expat infrastructure, and proximity to the US; Paraguay offers territorial taxation, lower costs, and easier residency. This comparison helps you decide which fits your priorities.
At a Glance
Paraguay Advantages
- 0% tax on foreign income (Costa Rica taxes worldwide income)
- 50-60% lower cost of living
- No income requirements for residency
- Simpler residency process
- Lower crime rates
- Less touristy, more authentic
- No dependency on tourism economy
Costa Rica Advantages
- Stunning natural beauty (beaches, rainforests)
- Established, large expat community
- Better English accessibility
- Closer to US (shorter flights)
- More developed tourism infrastructure
- Better healthcare reputation
- Pura vida lifestyle culture
Detailed Comparison
Taxes
Paraguay winsThis is a major differentiator. Paraguay has territorial taxation (0% on foreign income). Costa Rica now taxes worldwide income at rates up to 25%. For remote workers, Paraguay saves 15-25% of income.
Cost of Living
Paraguay winsParaguay is 50-60% cheaper. Costa Rica has become expensive, especially in popular expat areas. Paraguay offers much better value.
Residency
Paraguay winsParaguay wins easily—no income proof needed. Costa Rica's residency requires either significant monthly income or large deposit.
Citizenship
Paraguay winsParaguay has slightly faster path and less complex process.
Safety
Paraguay winsAsunción is generally safer. Costa Rica has increasing crime, especially property crime in tourist areas. Paraguay has lower overall crime rates.
Infrastructure
Costa Rica winsCosta Rica has better developed infrastructure, especially in health care and tourism services. More international-standard facilities.
Climate
Costa Rica winsCosta Rica offers diverse microclimates—beach, mountain, tropical. Paraguay is more uniformly hot and humid. Costa Rica has more variety.
Lifestyle
TieCosta Rica offers beach lifestyle and eco-tourism. Paraguay offers authentic South American experience. Very different vibes—personal preference.
The Verdict
Choose Paraguay for tax savings and lower costs. Choose Costa Rica for natural beauty and established expat life.
Choose Paraguay If...
- Tax optimization is a priority
- You want lowest possible costs
- Income proof is difficult for you
- You prefer less touristy environment
- You want authentic cultural immersion
Choose Costa Rica If...
- Beaches and nature are essential
- You want established expat community
- You prefer English accessibility
- You value proximity to US
- Healthcare quality is top priority
Frequently Asked Questions
Which has better taxes: Paraguay or Costa Rica?
Paraguay wins decisively. Paraguay has 0% tax on foreign income (territorial system). Costa Rica now taxes worldwide income at rates up to 25% (changed in 2024). For remote workers, this is a 15-25% difference.
Is Costa Rica really that expensive?
Yes, especially in popular areas like the Central Valley and beach towns. A comfortable lifestyle costs $2,500-4,000/month. Paraguay offers similar or better quality of life for $1,200-1,800.
Which is safer?
Paraguay generally has lower crime rates. Costa Rica has seen increasing property crime and robberies, especially in tourist areas. Asunción's safe neighborhoods are quite secure.
Which is closer to the US?
Costa Rica is much closer—3-4 hour flights from Florida. Paraguay requires connections and 10+ hours travel. For frequent US trips, Costa Rica wins.
Which has better healthcare?
Costa Rica has better developed healthcare infrastructure with more international-standard facilities. Paraguay has good private hospitals but less developed overall.
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