Establishing Citizenship In Paraguay: Part 2

Money, Residency & Visas| Views: 1785

In Part 1 of this Guide, we talked about how to become a permanent resident in Paraguay and why you would do it. The process is not so difficult, but it can be time consuming and bureaucratically grueling. It takes about 6 months, a lawyer and a bunch of paperwork to get the residency. That said, compared to many other countries, the process is relatively quick and cheap.

Of course, there are those who want a new lifestyle in a laid-back and sunny country, however most people are looking to get a tax break when applying for a residency in Paraguay. There is a lot of information out there that says you can just leave Paraguay and come back in 3 years to get your citizenship, while enjoying the tax benefits. This isn’t really how it works. So if you’ve decided to become a Paraguayan citizen, then there are a few things you need to consider over the next 3 years after receiving your residency.

Residency Requirements in Paraguay

First of all, after you’ve become a permanent resident, you need to physically live in Paraguay for 3 years, or at least the minimum of days required by law. As mentioned above, in the past people used to be able to leave Paraguay as soon as they applied for the residency and come back 3 years later to get their passport. The process was taken care of by their lawyer and they lived happily ever after.

The Paraguayan Government has since been much stricter with the naturalization process. While the decision-making process on whether a citizenship application is approved or not is not 100% clear, there are some points that you need to comply with to apply:

  • Reside in Paraguay for a minimum of 3 years. Normally this means 183 days per calendar year, although it’s best to get advice from a reputable lawyer. Keep in mind that for taxation purposes only, you are considered a Paraguayan resident if you spend 120 days per calendar year in the country.
  • Demonstrate ties to Paraguay. This can include a work contract, a business or investment, studies, friends, colleagues, memberships, etc.
  • You also need to be 18 years of age or older and have a clean criminal record in Paraguay and elsewhere.

While this is still one of the shortest processes to get a second passport, it’s an investment on your part and you need to be well prepared. So let’s talk about some things you can do during your 3 years in Paraguay.

What to Do in Paraguay for 3 Years

Let’s start by discussing the cost of living – how much money do you actually need to live comfortably? Of course, this will vary greatly depending on what someone might consider comfortable, whether you are on your own or with a family and where in Paraguay you choose to live.

Keep in mind that the average salary in Paraguay is $500 USD or so, meaning that people are living on very little. Somewhere in the $1,500-$2,500 USD range gets you quite a bit in Asuncion (the capital) and even more in the rural areas. That said, finding a job that will pay you that much locally may be more challenging. So the best advice for someone moving to Paraguay is to have something set up such as investment, freelancing, a business or a multi-national contract, rather than looking for local contract work.

Of course, remember that you only need to spend half the year in Paraguay, not the full 365 days. So if you have a seasonal business back in the US or just want to get a dose of home now and then, you are not permanently tied up for 3 years, but can move around freely. Whatever you decide, here are some pointers on what you could do:

Invest

Paraguay has a quickly growing economy. The landlocked country is rich in resources and is still relatively cheap as far as the South American continent goes. One of the biggest industries to invest in is agriculture. Some important sectors include soy, beef, yucca, chia, and corn production. Because land is cheap to buy and fresh water is abundant, it can be a great sector to put your money in.

Another option is manufacturing, including textiles, hardwoods, cedars and other consumer goods. Alternatively, you can also look in the mining and energy sector if you are after a big investment, since Paraguay is rich in titanium, uranium and gold. Plus, there is always the option of real estate. As mentioned earlier, land is cheap and the economy is booming, so it could be a good investment in the long-run.

Open a Business or Freelance

It’s likely that after all, you are getting a second passport in Paraguay to save some money on taxes. Well, then it’s the perfect place to run your business out of. With personal and corporate taxes at only 10%, it’s a pretty win-win situation. If you are a professional, who can freelance online, then this is straight forward. You just keep running your virtual consultancies the way you normally would and declare your taxes in Paraguay. One thing to consider is where your income is coming from – if your clients are in the US, you may need to review the IRS conditions on that.

If starting a business in Paraguay or moving branch down, keep in mind that it takes a couple of months to constitute a company with a variety of different options available. In this case, it’s probably a good idea to hire a good lawyer to help you through the process. In addition, get an accountant. Even though the tax is 10% flat rate, there may be some hidden taxes to pay for, in addition to social security benefits for employees, etc.

Study

Another option is to study in Paraguay. You can learn Spanish, and even Guarani if you’d like, take a Master’s degree or write your thesis from sunny Asuncion. While learning Spanish may not require 3 years of living in the country, a Bachelor or a Master’s degree might be a good idea. While higher education is a newer industry in Paraguay, tuition and living costs are really cheap and you get your citizenship in the meanwhile. An alternative is to write your Master’s or Doctorate thesis – this is particularly attractive to someone whose subject may be relevant to Paraguay or South America in general.

The Cons of Living in Paraguay

Paraguay is a wonderful country, but there are some pros and cons to weigh out when thinking about moving down there. The country and atmosphere are quite different from what you may be used to, so there is an element of culture shock that is involved when moving to a new place. Let’s take a look at some of things that expats often cite as difficulties they face when arriving in Paraguay.

Back and forth travel

Let’s face it, Paraguay is far. Almost at the very south of the continent, it isn’t the largest hub for flights either. This means that there are few direct options and they are expensive. This is something that you need to factor into your budget and lifestyle. If you foresee frequent travel home or want to be close in case of an emergency – how long will it really take you to get back if needed? How much will it cost on average and what are your route options?

Transportation in general

Besides international air travel, Paraguay does not boast the most sophisticated transportation infrastructure. There is a bus system in Asuncion, but it can be confusing and not 100% reliable. Elsewhere, you will also find inter-city buses, but again, they aren’t as well organized as they could be. That said, this is constantly improving as the economy grows. For someone moving to Asuncion, you should be able to get around with taxis and buses, but a car is something to consider in your plans. If you are going somewhere more rural, then it’s almost a must if you want any mobility.

Education system

Are you moving down with your kids? Then consider the expenses of a private education system. You may already be paying for this in the US and you are likely going to continue doing so in Paraguay. The public education system is, just like its transportation counterpart, largely improving, but isn’t quite up to the standard that most expats are looking for.

Safety

As far as countries in Latin America go, Paraguay is pretty safe and secure. That doesn’t mean, however, that it’s the safest place on the planet and that you won’t need to be alert and aware. Most frequent are petty crimes and scams, which as an expat you’ll need to watch out for especially. While Paraguayans are lovely and warm people in general, there is a black sheep in every family, and you just need to avoid them. In terms of violent crime, it’s definitely there, but likely nothing you need to worry about too much if you live in a safe area of the city and take customary precautions.

Bureaucracy

This is last, but certainly not least. You might think that there is a lot of bureaucracy where you are already, and there probably is, but it’s very likely that in Paraguay there is much more. While it may not affect you in your everyday life, it definitely will when you are applying for residency, citizenship or doing any other paperwork. Not that it’s a huge lifestyle concern, but it can be extremely frustrating, so it’s a good idea to do your research, talk to other expats and prepare yourself for this shift in mentality.

The Pros of Living in Paraguay

Not all is bad. Most expats who move down to Paraguay love it, and there are many reasons for this. We’ve already discussed why you would move to Paraguay in the first place, but here are some pros of actually living in the country.

Summer heat all year round

While there are probably a few people who would consider this a disadvantage, most expats look for this kind of climate. Never-ending summer! Sure there are rainy days, but overall, you’ll never be cold again. When moving to a hot country, look for a few extras that you might not consider back home. A swimming pool access in your building is ideal, as is outdoor space, whether it’s a garden or a balcony. You will likely be spending a lot of time outside. In addition to this, you might want to check how much air flow your place gets, whether it has air conditioning, what time the sun hits your windows, and other small considerations like these.

Learn a new language

Paraguay is unique in that it has preserved the language of its indigenous people – Guarani. Not only does the majority of the population speak it fluently, it’s also one of the two official languages of the country, alongside Spanish. So even if you are already a fluent Spanish speaker, you can still learn a new language. It may not come in too handy outside of Paraguay, but like all new languages, it will develop your brain, help you gain new perspective, and just be a very cool thing to tell people at a party.

Good healthcare

A big concern for many expats moving to the south is healthcare. Paraguay ranks pretty high as far as health services go and you have access to both public and private healthcare as a foreigner. While public healthcare is OK, it’s always advisable to get private insurance. Through this, you will get access to top high-quality medical institutions in the country. Something to consider is the fact that the government is constantly investing more in healthcare and it is vastly improving and has improved over the past decade. In addition, it is generally more affordable than the US.

Best meat you’ll ever eat

Famous for its meat industry, Paraguayan meat is one of the best in the world. And it’s available everywhere, all the time. Delicious, cheap and quality steak all year round – sounds like a great deal! And you can get more than just meat when it comes to fresh quality produce. With a very strong agriculture industry, Paraguay is a wonderful place to eat local.

Discover hidden gems

There aren’t too many places on the planet, which are widely undiscovered by tourists, and Paraguay just happens to be one of them. A country blessed with spectacular natural beauty, it has yet to be overrun with tours. While Asuncion and Ciudad del Este are two places you hear about the most, check out some less popular locations such as the Cerro Cora National Park and the Saltos del Monday. For culture and heritage, visit the least visited UNESCO World Heritage site in the world – La Santisima Trinidad de Parana.

As mentioned earlier, the Corazon de America, or the Heart of America, Paraguay is a wonderful country with lovely people. That said, a move that far from home to a new culture may or not be for you. So do your research before you decide to go, talk to expats who are already in Paraguay and who have lived there, and be ready for an adventure if you do decide to go. Plus, stay tuned for our next and last part of the Guide, covering how to get your citizenship in Paraguay.

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