Paraguay vs Portugal
Compare Paraguay and Portugal for expats. With NHR ending, is Paraguay the new tax-friendly destination? Cost of living, residency, and lifestyle compared.
Portugal has been the European darling for digital nomads, but with the NHR tax regime ending and costs soaring, many are looking for alternatives. Paraguay offers what Portugal used to: favorable tax treatment, affordable living, and welcoming residency policies. This comparison helps those reconsidering Portugal or seeking similar benefits elsewhere.
At a Glance
Paraguay Advantages
- 0% tax on foreign income (permanent, not time-limited)
- 50% lower cost of living than Lisbon
- No income requirements for residency
- Faster, simpler residency process
- Less bureaucratic government
- Not overcrowded with tourists/nomads
- No housing shortage crisis
Portugal Advantages
- EU residence and travel rights
- Better climate (less extreme)
- Established digital nomad infrastructure
- Larger English-speaking community
- World-class wine and food culture
- Path to EU citizenship
- Better international connectivity
Detailed Comparison
Taxes
Paraguay winsParaguay's 0% on foreign income is permanent. Portugal's NHR regime (10% flat tax) ended for new applicants in 2024. Standard Portuguese rates go up to 48%. Massive tax advantage for Paraguay.
Cost of Living
Paraguay winsParaguay is roughly half the cost of Lisbon. Rent especially is 60-70% cheaper. Portugal has become unaffordable for many.
Residency
Paraguay winsParaguay has easier access with no income proof. Portugal's visas require significant income proof or investment.
Citizenship
TieSimilar timelines, but Portugal offers EU citizenship which has different value. Paraguay citizenship is easier to obtain.
Safety
TieBoth are quite safe. Portugal has very low violent crime; Paraguay's expat areas are also safe. Neither is concerning.
Infrastructure
Portugal winsPortugal has significantly better infrastructure—EU-standard facilities, better internet reliability, more developed services.
Climate
Portugal winsPortugal has near-ideal climate with 300 sunny days and mild temperatures. Paraguay has hot humid summers that many find challenging.
Lifestyle
Portugal winsPortugal offers European lifestyle, world-class food and wine, beach access, and vibrant culture. Paraguay offers authentic South American experience but less polished.
The Verdict
Choose Paraguay for tax optimization and affordability. Choose Portugal for EU access and lifestyle.
Choose Paraguay If...
- Tax savings are your primary goal
- Budget is a major concern
- You don't need EU residency
- You prefer less crowded destinations
- Income proof is challenging
Choose Portugal If...
- EU access/citizenship is the goal
- European lifestyle matters
- You prefer mild climate
- Large expat community important
- You can afford Portugal's costs
Frequently Asked Questions
Is Portugal's NHR tax regime really gone?
Yes, NHR ended for new applicants in 2024. Existing NHR beneficiaries keep their status for the full 10 years, but newcomers cannot access the 10% flat tax anymore. Standard Portuguese rates up to 48% now apply.
Is Paraguay a good Portugal alternative?
For tax optimization, yes. Paraguay offers permanent 0% on foreign income (no 10-year limit), 50% lower costs, and easier residency. It lacks EU access and Portuguese lifestyle perks.
Which is easier for residency?
Paraguay is easier—no income requirements. Portugal's D7 requires proof of €760+/month passive income. Paraguay accepts anyone regardless of income level.
Can I get EU citizenship through Paraguay?
No. Paraguay is not in the EU. If EU access is your goal, Portugal (despite higher costs) or other EU paths remain necessary.
How do costs compare?
Paraguay costs roughly half of Lisbon. Nice 1BR in Asunción: $450/month vs $1,200+ in Lisbon. Total monthly costs: $1,200-1,800 vs $2,500-4,000.
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