Starting a Business in Paraguay: 2026 SRL Setup Guide
Paraguay's "Triple 10" tax regime — 10% corporate, 10% VAT, 10% personal income — combined with a territorial tax system that legally exempts foreign-source income. Here's the complete roadmap to registering your SRL and operating legally.
Why Paraguay for Business in 2026
Paraguay achieved investment-grade status, lowering the cost of capital for local entities and prompting a modernization of its administrative and banking infrastructure. For entrepreneurs, this means institutional stability meets the lowest tax burden in South America.
Investment-Grade Stability
Paraguay's investment-grade rating has lowered borrowing costs and attracted institutional capital. The country is no longer a "frontier" market — it's a mature, digital-first jurisdiction.
- • First year under investment-grade scrutiny
- • Modernized banking and administrative sectors
- • Strengthened AML/SEPRELAD compliance
- • Increased foreign direct investment flows
Mercosur Market Access
A Paraguayan company provides preferential access to the massive markets of Argentina, Brazil, and Uruguay through Mercosur membership.
- • Simplified export procedures within bloc
- • Substantial tariff advantages
- • Effective vehicle for service providers
- • Access to 260M+ consumers
Triple 10 Tax Regime
The "Triple 10" system offers a flat, predictable tax structure rarely found in Latin America or globally.
- • 10% corporate income tax (IRE)
- • 10% value-added tax (IVA)
- • 10% maximum personal income tax (IRP)
- • 0% on foreign-source income (territorial)
SIFEN Digital Compliance
Electronic invoicing is now mandatory, signaling Paraguay's shift to a modern, transparent business environment.
- • Mandatory since April 2025 for new entities
- • Free e-Kuatia'i system for small business
- • Digital signature required
- • Full rollout by December 2026
Comparing Business Structures
Choosing the right legal entity is the foundational step. Your choice impacts liability, governance, registration timelines, and the ability to operate remotely. Here are the three main options for foreign investors in Paraguay.
| Feature | SRL | EAS | SA |
|---|---|---|---|
| Members | 2-25 partners | 1 shareholder | 2+ shareholders |
| Min Capital | No minimum | No minimum | ~$368,000 |
| Registration | 18-21 weeks | 1-2 weeks | 21+ weeks |
| Process | Traditional (notary) | 100% digital (SUACE) | Traditional + board |
| Governance | Flexible bylaws | Simplified | Board + Trustee |
| Best For | Most expats | Solo founders | Large enterprises |
SRL: The Default for Most Expats
The SRL offers significant flexibility in bylaws, strong legal precedent rooted in the Civil Code, and international banking recognition. Capital is divided into "quotas" rather than shares. You can start with as little as $1 (though higher amounts improve banking credibility). Requires at least 2 partners — many use a spouse or nominee.
EAS: Speed for Solo Founders
The EAS is the only Paraguayan structure allowing 100% ownership by a single individual. Fully digital registration through SUACE in 1-2 weeks. Newer legal framework means less precedent than the SRL, and some international banks may be less familiar with the structure for cross-border transactions.
SRL Registration Roadmap
Registering an SRL in Paraguay is a multi-step process requiring a lawyer and public notary. While many steps have been digitized in 2026, the Public Deed still requires physical or power-of-attorney-based signatures. Budget 18-21 weeks from start to finish.
Name Reservation
Define your corporate purpose and select a unique company name. Your notary verifies availability through the Directorate of Intellectual Property (DIPYGE) or the General Directorate of Public Registries (DGRP). The name must not be identical or confusingly similar to existing entities.
Draft Articles of Incorporation
The Articles of Incorporation (Estatutos) are formalized via a Public Deed (Escritura Publica). This document details the company purpose, management structure, capital distribution of quotas, and operational guidelines. Ensure bylaws allow for remote management and clearly define the resident director's role versus foreign partners.
Notarization + Registration
Partners sign the deed before a Public Notary (or via Power of Attorney if not in Paraguay). The deed is then registered with three entities to give the company full legal personality.
- DGRP (General Directorate of Public Registries) — grants legal personality
- Public Registry of Commerce — validates commercial acts
- Registry of Juridical Persons — corporate structure oversight
RUC Tax ID via Marangatu
Register with the Undersecretariat of State Taxation (SET) to obtain your Single Taxpayer Registry (RUC) number through the Marangatu electronic system. The RUC is mandatory for all commercial operations — invoicing, bank accounts, and tax declarations.
Municipal License + IPS/MTESS
Obtain your municipal business license (Patente Comercial) from the local municipality. If you have employees, register with the Ministry of Labor (MTESS) and the Social Security Institute (IPS). Industry-specific permits may be required from the Ministry of Industry and Commerce (MIC).
Setup Costs
Initial Registration Costs
Annual Maintenance
Minimum Wage Context
The minimum wage as of January 2026 is PYG 2,899,408 (~$370/month). This figure is critical for budgeting: it dictates the minimum social security contribution (16.5% for employers) and influences thresholds for various tax regimes.
Tax Framework for SRLs and Digital Nomads
Paraguay's tax system is governed by Law No. 6380/19 on Tax Modernization. The territorial principle means only income generated within Paraguayan borders is subject to taxation. Even if you claim 0% on foreign-source income, you must still file an annual return with SET.
IRE: Business Income Tax
Flat 10% on profits from all commercial activities. The key is the income source:
- Local source: Services consumed in Paraguay or goods sold locally → 10%
- Foreign source: Services to US/EU clients consumed abroad → 0%
IDU: Dividend Tax
5% exit tax on profits distributed from the company to shareholders. This is the most significant tax for foreign investors repatriating profits.
- Applies when distributing dividends
- Retained profits are not taxed under IDU
IRP: Personal Income Tax
Progressive rates on individual Paraguayan-source income. Foreign-source income (offshore dividends, rental income abroad) is not taxed.
| Annual Income (PYG) | Rate |
|---|---|
| 0 – 50,000,000 | 8% |
| 50M – 150,000,000 | 9% |
| 150,000,001+ | 10% |
IVA: Value-Added Tax
Standard rate of 10% on most goods and services. Essential items like basic food and pharmaceuticals may have reduced rates.
- Standard: 10% on most local sales
- Reduced: 5% on certain essentials
- Exports: 0% (tax credit recoverable)
Banking & Resident Director
The Resident Director Bottleneck
Banks almost universally require that at least one manager or legal representative be a Paraguayan resident with a valid Cedula. This person must attend in-person at the bank. Most expats hire a local law firm to provide a temporary resident director until they obtain their own Cedula through temporary residency.
Required Documents for Corporate Accounts
Public Deed of Incorporation
Duly registered with the DGRP
RUC Certificate
Issued by the SET
Board/Partners' Resolution
Authorizing account opening and designating signatories
UBO Disclosure
Identification of all Ultimate Beneficial Owners
FATCA/CRS Forms
Mandatory for reporting to foreign tax authorities
Timeline & Key Banks
After all documentation is submitted. Corporate internet banking setup can take an additional 3 weeks after approval.
Common Banks for Expat Businesses
- • Banco Continental — Largest private bank
- • Itau — International presence, familiar with foreign clients
- • Sudameris — Strong corporate banking services
Payment Gateways for E-commerce
For digital nomads selling products or services online, integrating local payment methods is essential. As of July 2026, the Central Bank (BCP) reduced maximum credit card fees to 3% and debit to 2%, making e-commerce significantly more cost-effective.
| Gateway | Typical Fees (2026) | Supported Methods |
|---|---|---|
| Pagopar | 3.0% – 5.0% + IVA | Credit/Debit, QR, Tigo Money, PIX |
| Bancard (vPOS) | ~3.0% – 4.0% | Infonet, VISA, Mastercard, QR |
| Vpagos | ~3.5% | Local bank transfers and cards |
SIFEN Electronic Invoicing
Mandatory for All New Entities Since April 2025
The Integrated National Electronic Invoicing System (SIFEN) requires all invoices to be issued, validated, and stored electronically in XML format. Failure to comply means your invoices are invalid for tax deductions by the buyer.
e-Kuatia'i (Free)
Free solution from the tax authority for small taxpayers with low invoicing volume. Issue and store Electronic Tax Documents (DTE) directly through a web portal.
Best for most digital nomadse-Kuatia (ERP Integration)
For medium and large taxpayers requiring integration with internal accounting and ERP systems. More complex setup but necessary for high-volume businesses.
For larger operationsSIFEN Implementation Timeline
Residency & Tax Residency
Registering an SRL is often linked to obtaining residency. Once you have temporary residency and your own Cedula, you can act as the legal manager of your SRL directly — removing the need for a hired resident director.
2-Year Temporary Pathway
Most expats start with 2-year temporary residency. Requires passport, birth certificate, and criminal record — all apostilled and translated. Once granted, you receive a Cedula to manage your own SRL.
Full residency guideSUACE Investment ($70K)
Direct permanent residency by committing to a $70,000 investment (can be staged over 10 years). Must hire at least 5 local workers. Processing takes ~4 months through the SUACE window with MIC.
SUACE residency guideFiscal Residency vs. Simple Residency
Having a residency permit lets you live in Paraguay, but fiscal residency requires more. SET may require proof that Paraguay is your "center of vital interests" — plane tickets, a housing contract, and capital movement within the country. For a Tax Residency Certificate (useful for avoiding double taxation abroad), you generally need 183 days of physical presence in a 12-month period.
US Expat: Form 5471 Warning
US citizens and green card holders: owning a Paraguayan SRL triggers complex IRS reporting.
The IRS treats the SRL as a foreign corporation. If you own 10% or more, Form 5471 is mandatory. If the SRL is more than 50% owned by US persons, it's classified as a Controlled Foreign Corporation (CFC) with additional GILTI and Subpart F obligations.
Penalty per unfiled Form 5471 per year
No statute of limitations on unfiled forms
Ownership threshold triggering filing
Key CFC Reporting Requirements
- GILTI: Even without distributing dividends, the IRS may tax residual income exceeding a 10% routine return on tangible assets
- Subpart F: Passive income (interest, dividends, certain rents) taxed directly to the US shareholder as if it were a dividend
- Schedule G: Requires disclosure of Qualified Business Units using different functional currencies (e.g., Paraguayan Guarani)
Paraguay vs Panama vs Uruguay
When comparing regional hubs, Paraguay stands out for its cost-to-benefit ratio for smaller entrepreneurs. The total cost of maintaining residency and a business in Panama is generally 40-60% higher than Paraguay.
| Feature | Paraguay SRL | Panama Corp | Uruguay SAS |
|---|---|---|---|
| Foreign Income Tax | 0% (Territorial) | 0% (Territorial) | 0% (10-yr Holiday) |
| Corporate Tax Rate | 10% | 25% | 25% |
| Setup Cost | ~$12,000 | $5,000+ | $15,000+ |
| Cost of Living | Low | Medium-High | High |
| Banking Privacy | High | Moderate | High |
Paraguay's Edge
Paraguay offers the lowest corporate tax rate at 10% (vs 25% in both Panama and Uruguay), combined with the lowest cost of living. While Panama has a dollarized economy and better infrastructure, and Uruguay's 10-year tax holiday eventually expires, Paraguay's territorial system is permanent with no sunset clause.
Frequently Asked Questions
What type of company should I register in Paraguay?
SRL for most expats — it requires 2-25 partners, has no minimum capital, and offers flexible bylaws with strong legal precedent. EAS if you're a solo founder — it allows 1 shareholder with 100% digital setup through SUACE in 1-2 weeks. SA only for large enterprises requiring $368,000+ minimum capital and a board of directors.
How much does it cost to start an SRL in Paraguay?
Approximately $12,850 for the first year including legal and notary fees ($3,000-$5,000), public registry filings ($200-$250), official gazette publication ($150-$200), and interim legal representation. Annual maintenance runs $4,400-$8,600 including monthly accounting ($200-$350/month) and compliance fees.
Do I need to be in Paraguay to register an SRL?
Not for the entire process. A Power of Attorney (PoA) allows your lawyer to sign the Public Deed on your behalf remotely. However, you will need a resident director with a Paraguayan Cedula until you obtain your own through temporary residency. At least one signatory must attend the bank in person for account opening.
How is my Paraguay business taxed?
10% IRE (Business Income Tax) on Paraguayan-source income, 0% on foreign-source income under the territorial tax principle. 5% IDU (Dividend Tax) when distributing profits to shareholders. 10% IVA (VAT) on local sales and services. Progressive 8-10% IRP (Personal Income Tax) on individual Paraguayan-source income.
Can I be the sole owner of a Paraguay company?
Not with an SRL — it requires a minimum of 2 partners (maximum 25). Choose an EAS (Empresa por Acciones Simplificadas) for sole ownership with 100% digital registration. Many expats use a spouse as the second partner, or work with a nominee partner arranged through their lawyer.
Do US citizens have extra tax obligations with a Paraguay company?
Yes. IRS Form 5471 is required for any US person owning 10% or more of a foreign corporation. The penalty is $10,000 per unfiled form per year with no statute of limitations. GILTI (Global Intangible Low-Taxed Income) and Subpart F income rules may also apply to your SRL's earnings. Consult a cross-border tax specialist.
What about electronic invoicing requirements in Paraguay?
SIFEN electronic invoicing has been mandatory since April 2025 for all newly registered entities. Use the free e-Kuatia'i system for small businesses with low invoicing volume, or e-Kuatia for ERP integration. A digital signature from an authorized provider is required for all electronic invoices to have legal validity.
How do I open a business bank account in Paraguay?
You need the Public Deed of Incorporation, RUC certificate, a board/partners' resolution authorizing the account, Ultimate Beneficial Owner (UBO) disclosure, proof of income or business plan, and FATCA/CRS forms. At least one signatory must have a Cedula and attend in person. Expect 4-8 weeks for approval after submission.
Estimate Your Setup Costs
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