Paraguay

Tax residency in Paraguay is generally triggered by physical presence exceeding 120 days in a calendar year. The country operates on a territorial basis: income sourced abroad is not subject to local income tax for residents, making it particularly attractive for individuals with cross-border income streams. No statutory CFC rules apply, which can facilitate the use of foreign holding structures without automatic income attribution.

Territorial tax system. Foreign-source income exempt. Very low cost of living. Residency by investment starting at USD 5,000. Only 120 days/year required to maintain residency.

The standard corporate income tax rate is 10%. The administrative process is considered straightforward, with minimal bureaucratic friction.

Banking access in Paraguay is attainable but may require more documentation and time than in simpler jurisdictions. Internet infrastructure is developing. Speed and reliability can vary by location and should be assessed for business-critical operations.

Paraguay is currently on the FATF grey list, indicating enhanced monitoring by the international AML/CFT body. This may affect banking relationships and counterparty due diligence requirements. EU tax blacklist status: not_listed. Structures involving this jurisdiction may attract additional scrutiny or reporting obligations under EU member state rules.

Based on our scoring model, Paraguay ranks highest for Freelancer and Digital Nomad. It offers a strong proposition for freelancer (score: 65/100). It offers a reasonable proposition for digital nomad (score: 63/100).