Paraguay

Paraguay is a landlocked country located in the heart of South America, bordered by Argentina, Brazil, and Bolivia.

Known for its natural beauty, Paraguay is rich in rivers, forests, and fertile land.

Why Paraguay

Paraguay is considered one of the safer countries in Latin America, with lower crime rates compared to its neighbors. While petty crime can occur, particularly in urban areas, rural regions are known for their tranquility and close-knit communities. The government continues to make efforts to improve security and infrastructure, contributing to an overall sense of safety and stability, particularly in gated communities and residential areas designed for expats.

This combination of safety, political stability, low cost of living has made Paraguay an attractive destination for those seeking a peaceful and secure environment.

Political system

Paraguay operates under a representative democratic republic, led by a president, who serves as both the head of state and government, elected for a five-year term without the possibility of immediate re-election. The National Congress is a bicameral body, consisting of the Chamber of Senators and the Chamber of Deputies, responsible for legislative functions.

Paraguay has enjoyed a period of political stability in recent years, with peaceful transitions of power and adherence to democratic principles. The judiciary functions independently, ensuring checks and balances within the political system. Despite occasional challenges, Paraguay remains committed to democratic governance, with efforts continually made to strengthen its institutions and political processes.

Economy

Paraguay’s economy is primarily driven by agriculture, with key exports including soybeans, corn, beef, and other agricultural products.
The country benefits from its fertile land and favourable climate, making it a major producer in the region.
Hydroelectric power is another vital sector, with Paraguay being one of the world’s largest exporters of electricity, thanks to the Itaipú and Yacyretá dams shared with Brazil and Argentina.

The economy is characterized a business-friendly environment, and a growing manufacturing sector.
In recent years, Paraguay has attracted foreign investment due to its competitive labor costs, stable currency, and openness to trade.
While poverty remains a challenge, the country’s macroeconomic stability, low inflation, and controlled public debt provide a foundation for steady growth.

Work

Working in Paraguay can be challenging for expats, as the local minimum salary is too low to sustain a comfortable lifestyle.

Even jobs with international companies often offer wages far below Western standards.

However, Paraguay presents excellent opportunities for digital nomads and entrepreneurs. Expats can establish local or online businesses,
benefiting from the country’s low cost of living and tax advantages.

Safety in public areas

Paraguay offers a safe and peaceful environment for expats and residents alike.

With relatively low crime rates compared to other Latin American countries, especially in rural and suburban areas, it provides a stable and secure living experience.

The country benefits from a strong sense of community, and gated urbanizations, like Aqua Village in Altos, provide an added layer of security for families.

While urban centers may experience petty crime, taking common-sense precautions ensures a high level of personal safety,
making Paraguay an attractive option for those seeking peace of mind in their new home.

Tax system

Paraguay is considered a low-tax country, offering favourable conditions for residents and businesses without being classified as a tax shelter or tax haven,
which can sometimes raise issues with Western countries.

Based on the territorial model, its transparent and straightforward tax system ensures compliance with international standards.
This allows expats to benefit from low taxes—such as the “3 x 10% rule”.
This includes a 10% Value Added Tax (VAT) on most goods and services, a 10% personal income tax on net local income after deducting expenses,
and a 10% corporate tax on profits for those running a Paraguayan business.

Income earned abroad is not subject to taxation, making Paraguay an attractive option for expats seeking a tax-friendly environment.
As a result, Paraguay provides an ideal balance for those seeking a legitimate, tax-efficient environment without the complications of a tax haven designation.

Health system

Paraguay’s healthcare system offers both public and private options, with the private sector being the preferred choice for most expats due to its higher quality of care.

Most expats contract private health insurance, which, while coming at a cost, ensures access to the best medical services in the country.

Private insurance also provides premium care at international hospitals if needed.
Many insurance providers offer packages with worldwide coverage, or at a discounted rate, worldwide excluding Brazil, the USA, and Canada.
This allows expats to enjoy top-tier healthcare both locally and abroad with peace of mind.

Safety at home

Low wages in Paraguay can contribute to burglaries, with thieves often targeting homes to steal household goods when the owners are away.

To prevent this, many who can afford it hire a “house caretaker,” someone who lives in a small house on the same property.
These caretakers are often familiar with local burglars and deter theft by redirecting them elsewhere.
Homes without caretakers are frequently broken into, sometimes multiple times.

A far safer solution is living in a closed urbanization, of which Paraguay has many.
While some offer only minor advantages, others, as detailed on the ‘Living in Luxury’ page, are almost like paradise.

Cost of living

Paraguay offers an incredibly affordable cost of living, making it highly attractive for expats.

Housing, utilities, and groceries are significantly cheaper compared to Western countries, allowing expats to enjoy a comfortable lifestyle without breaking the bank.
Luxury living, such as in gated communities like Aqua Village, is accessible at a fraction of the price found in Europe or North America.
Dining out, transportation, and services are also very budget-friendly.
Overall, expats in Paraguay can experience a high quality of life while benefiting from low living costs, especially when compared to the Western world.

Quality of life

In Paraguay, the very low wages offer only a basic lifestyle for much of the local population, who are eager to work to improve their living standards.

In contrast, both locals and expats can afford a luxurious or even very luxurious lifestyle depending on their net worth.
For middle and upper class persons and expats, It’s common to hire staff for tasks such as cleaning, washing, ironing, cooking, and grocery shopping.
Many households also employ gardeners, pool cleaners, and sometimes personal chauffeurs, even without being millionaires.

Paraguay provides an opportunity to enjoy a superb quality of life that would be out of reach for many in Western countries,
making it an appealing destination for those seeking comfort and affordability.

Retirement

For those looking to retire, Paraguay is an ideal destination, allowing retirees to enjoy their assets and savings in a peaceful and affordable environment.

Retiring in Paraguay offers even greater advantages, for those in need of care.

In Western countries, retirement and care homes can be extremely expensive, with limited staff often leading to reduced quality of care.

In contrast, Paraguay’s low wages make it affordable to hire one or even two full-time nurses to provide 24/7 care,
all at a cost significantly lower than placing one person in a care home in the Western world.

This allows retirees to receive personalized, attentive care while enjoying a comfortable and affordable retirement in Paraguay.

Disadvantages

Living in Paraguay comes also with some disadvantages.

The roads are often in poor condition, full of potholes and speed bumps, making driving a challenge.

The public health system is underfunded and offers limited care, so those who can afford it usually opt for private health insurance.

Wages are extremely low, which is a downside for people seeking employment, but for business owners and expats, it’s an opportunity to hire household help affordably.

Public transport is slow and outdated, but alternatives like Uber, Bolt, and taxis are extremely cheap.

Consumer goods are often of lower quality, though you can import items from Amazon in the U.S. for a small fee.
High import duties on certain goods can be a challenge, but many people bypass this by declaring lower values when importing.

Despite these drawbacks, Paraguay’s low cost of living makes it attractive for expats.