More and more Spaniards are looking towards Paraguay as a destination to settle outside the European Union. The South American country offers a relatively swift migration process, a territorial tax system, and a cost of living well below that of Spain.
A process without special conditions for Spaniards
The National Directorate of Migrations (DNM) of Paraguay processes residency under the Law No. 6984/2022 on Migrations, a regulation that does not distinguish nationalities: a Spanish citizen follows the same process as any other foreigner. There are no admission quotas or discretionary criteria from the agency.
The standard application requires seven documents: a valid passport with at least six months of validity, an apostilled birth certificate, apostilled criminal record (valid for 90 days), a medical certificate issued in Paraguay, proof of economic solvency, passport-sized photographs, and a residence contract in the country.
Proof of solvency can be demonstrated with a bank statement from the last three months, a notarised asset declaration, or a letter from a financial institution. The DNM does not set a mandatory minimum amount.
Documents issued in Spain, such as the birth certificate or criminal records from the Ministry of the Interior, must be apostilled and translated into Spanish by a registered public translator in Paraguay before being submitted to the DNM. With the complete application, the process usually resolves in between 60 and 90 working days.
Temporary and permanent residency: two distinct pathways
Paraguay has two migratory categories. Temporary residency is the usual route and is requested once in the country, presenting the entry stamp and a sworn declaration of economic activity and residence to the DNM.
Permanent residency, on the other hand, requires maintaining temporary residency for a minimum of two years and being able to prove physical presence in Paraguay, although not continuously. From there, the path to Paraguayan nationality takes about five years of accumulated residency.
Anyone wishing to review the exact documentation and timelines that apply to Spanish citizens can consult this guide on residency in Paraguay for Spaniards.
Taxation: the territorial system
The most frequently mentioned argument among those considering relocation is fiscal. Paraguay applies a pure territorial taxation system, meaning it only taxes income generated within its borders. Income obtained abroad (salaries from international clients, rental income from properties outside the country, or investment returns) is not taxed in Paraguay, regardless of the amount.
Local-source income, on the other hand, is taxed at a rate of around 8-10% for individuals and a fixed 10% for companies. Paraguay also does not impose wealth or inheritance taxes, which also influences the decision of investors and retirees with accumulated wealth.
There is an important nuance: Spain and Paraguay do not have a double taxation agreement in force. To stop being taxed by the Spanish State Agency for Tax Administration (AEAT), it is not enough to obtain Paraguayan residency. It is necessary to formally deregister from the census of Spanish residents and prove the new tax residency, a process that should be planned with specific advice before taking the step.
How much does it cost to live in Paraguay
Specialised relocation portals to Paraguay, which are the main available source for this data, place the monthly expenditure of an expatriate in Asunción, including rent, in a range of between 800 and 1,800 dollars, depending on the standard of living and the chosen area. Eating out, transport, and basic services usually cost significantly less than in major Spanish cities.
This does not mean that the move is without drawbacks. Those already living in Paraguay often point out additional costs compared to Europe: international health insurance, more expensive flights to visit family, or backup solutions for power outages or internet connection issues, which are more frequent than in Spain. The country's infrastructure, especially outside Asunción, still lags behind Europe in several aspects.
A destination that requires planning
Paraguay is not an automatic or universal solution. It fits better with freelancers with international clients, companies whose activities are conducted outside the country, or retirees with foreign pensions looking to stretch their purchasing power. For those who maintain income or economic activity within Spain, the tax savings diminish, and the analysis changes completely.
There are no official figures on how many Spaniards currently reside in Paraguay, although the country remains a minority destination compared to other more traditional countries for Spanish emigration, such as Argentina or Mexico. The next step for anyone considering the option is usually the same in all cases: gather the documentation in good time, verify the apostille timelines in Spain, and resolve the tax exit before settling, not after.
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