How to open a business in Paraguay? Step-by-step guide

Want to understand everything about how to open a business in Paraguay? We've prepared a complete guide to our South American neighbor, with costs, the bureaucratic process and the best alternatives depending on your case. 

Paraguay is one of the biggest destinations for Brazilian companies, large corporations like the textile industry Lupo even small businesses and self-employed professionals. But why are so many companies moving to our neighbor? 

Quick summary:

• Total cost of starting a business: US$ 200 to US$ 500 (E.A.S);
• Opening time: 72 hours to 30 days, depending on the process;
• Required documents: articles of association, members' documents, proof of payment, Paraguayan banknotes and completed government forms;
• Do you need a Paraguayan partner? No.
• Do you need to live in Paraguay? No, but you need the ballot.
• Taxes: 10% IRE | 10% VAT | 10% IRP | Dividends 8%-15%

Table of contents:

• Why open a business in Paraguay?
• Can foreigners open a business in Paraguay?
• Taxes in Paraguay and special regimes
• Bilateral treaties and advantages for Brazilians in Mercosur
• Step by step to open a business in Paraguay
  • Documents you will need
  • Costs of starting a business
  • What are the shortcuts to starting a business in Paraguay as a Brazilian?
• FAQ

Why open a business in Paraguay?

With low energy costs, significant tax advantages in South America, a solid banking system and an abundance of natural resources, Paraguay has become attractive to investors and entrepreneurs from a variety of sectors. 

Can foreigners open a business in Paraguay?

The Paraguayan government encourages foreign investment by allowing foreigners to own 100% of open companies, without needing local people to run the company.

However, it is necessary to obtain an identity card in order to become a tax resident and not need a legal representative in the country.

Does opening a business in Paraguay reduce tax?

And if you're Brazilian and want to pay less tax, Paraguay significantly reduces the tax burden. Paraguay's tax system is known as the 10-10-10 model, referring to corporate, personal and value-added taxes which have a rate of 10%. Paraguay's average tax burden is 9.9% of GDP. For comparison, Brazil's reached 32,32% in 2024 - and that's not including other taxes.

Compared to the rest of the region, Paraguay has the lowest tax burden for both individuals and corporations. Check out our table, which also adds various taxes:

The country also has special regimes for certain sectors:

• Services and IT sector: is exempt from Value Added Tax (VAT) on the export of digital services by law 6380. Receives all the benefits of free zones. 

• IndustryThe Maquila Law 1064/9 creates, among other advantages, an 1% tax on added value or exports, full recovery of VAT (tax credit) paid on the purchase of machinery/services in Paraguay, zero VAT on the export of goods, and the facility to sell goods in free zones.

• Capital marketsThere is income tax stability for 10 years for contributions of up to US$ 50 million, 15 years for amounts between US$ 50 million and US$ 100 million and 20 years for amounts over US$ 100 million, provided that they are earmarked for the creation of industries or other productive activities that generate jobs.

Bilateral treaties and free trade for Brazil

Paraguay also has 23 bilateral investment and tax treaties. In other words, Paraguayan companies and investors around the world enjoy benefits such as non-bi-taxation agreements and trade facilities.

The country is also currently a member of Mercosur, which functions as a customs union for its members. The bloc also negotiates trade treaties with the European Union and has a pending treaty with Singapore.

Step by step to open a business in Paraguay

The first step in starting a business in Paraguay is to decide on the legal structure you want to use. As in Brazil, Paraguay has different types of companies: 

• Joint Stock Company (S.A)perfect for large companies with more than two partners, with no limits on the number of partners, whether physical or legal.

• Limited Liability Company (S.R.L)with a limit on liability in the legal entity, a minimum of two partners and a maximum of 25.

• Simplified Joint Stock Companies (E.A.S)This is the ideal solution for small and medium-sized businesses, allowing them to open easily and register just one partner or more. The process is quick and it is set up within 72 working hours.

• Sole Proprietorships and LLCs: ideas for small business owners, freelancers and developers.

• Limited Partnership (S.C.S)This allows for partners with unlimited risk and investors with limited risk.

Documents for starting a business in Paraguay

Each type of company requires different processes, documentation and minimum capital. O official government website explains the documents and procedures required for each type of company, including in Portuguese.

The first step is to get ballot, according to official website (SUACE) of the Paraguayan government, The following documents are required:

• Identity document, translated into Spanish by a public translator sworn in by the Supreme Court of Justice.
• Birth and marriage certificates.
• Criminal record certificate from the country of origin and legalized by the Ministry of Justice. Foreign relations in Asunción.
• National entry card or passport stamp.
• Health certificate issued by the Ministry of Public Health and Social Welfare, located in Brazil and in the city of Manuel Domínguez.
• Two certified copies of the Interpol certificate.
• Certificate of life and residence from the police station in the district where you will be living.
• Computer certificate issued by the National Police.
• 3×3 color photo.
• Sworn statement of law, as in the model below:

In general, you will need the following documents to open a company (SRL) after obtaining the cédula:

• Fill in the “Juridica” form, available on the official website of the Paraguayan government.
• Certified copy of the document of the owner, or legal representative, partners and directors of the company;
• Original public deed and 3 notarized copies; 
• Certified copy of your Paraguayan identity card;
• Draft Registration for Legal Entities and Associations, Registration
• 2 original documents of the Minutes of Registration for Legal Entities and Associations, Public Registry of Commerce, form number 14 of the General Directorate of Public Records.
• 2 certified copies of the Original Deposit Slip with the National Development Bank, referring to the paid-in capital in Guaraní currency;
• Proof of business address in Paraguay.

It is important that the share capital is consistent with the activity to be carried out, when there is no minimum limit.

How much does it cost to open a Paraguayan company?

The cost of starting a business in Paraguay can vary depending on the company structure and the type of business. Some costs to consider before starting a business are:

• Cost of official translation for documents (see the list on the website of the Supreme Court of Paraguay); 
• Cost of the provisional banknote, which is equal to one Paraguayan minimum wage;
• Registry costs R$500.00;
• Maintenance costs for accountants and representatives;
• Travel costs to Ciudad del Este.

For example, the average cost of opening an E.A.S. generally ranges from US$ 200 to US$ 500. As for maintaining the company, the cost ranges from US$ 400 to US$ 600 per month if you hire a company to do the maintenance process.

In total, you'll spend between R$ 4,500.00 and R$ 6,500.00, depending on the cost of your trip, accommodation and type of company.

What are the shortcuts to starting a business in Paraguay?

There are shortcuts to getting up and running quickly in Paraguay, saving between 30 and 90 days. You can do this legally through a shelf company or off-the-shelf company. Within 72 hours, you'll have a company in Paraguay, a bank account and the ability to sign contracts immediately.

However, you need to beware of companies in debt, problems with the SET (Paraguay's Internal Revenue Service) or fines. That's why it's important to hire a specialized consultancy that doesn't rely on off-the-shelf companies.

Here at Soberano, we have companies ready and able to get you into Paraguay as quickly as possible, just get in touch:

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