The benefits of dual residency for foreigners living in Paraguay
Benefits of dual residency
Dual residency is becoming an increasingly attractive option for people from all over the globe, and from all walks of life. In an increasingly online world, it makes more and more sense to take advantage of the benefits of dual residency, with access to multiple social service systems, tax systems, cultural touchstones and business infrastructures. New generations are looking to reap the financial and social benefits of a more agile, global approach to living, while older generations are understandably on the lookout for smart, attractive retirement options. In both cases, dual residency may provide the answer.
As a dual resident, you will be able to benefit from the advantages of not one country but two – their culture, history, languages, traditions, educational facilities and contrasting ways of life. Government officials in the countries in question, meanwhile, like to point to dual residents as examples of their nation’s attractiveness to outsiders – so everybody wins!
If you consider yourself to be a global citizen, unencumbered by notions like a single “home country”; if you are looking for new opportunities for both your personal life and your professional career in the wake of the Covid-19 pandemic; or if you are merely interested in broadening your horizons and seeing the world… then dual residency could be for you. And arguably the most attractive country in the world in which to establish dual residency with a minimum of fuss, and enjoy a uniquely appealing way of life, is Paraguay.
Why Paraguay?
Tucked away in the middle of South America, Paraguay is a beautiful country, full of welcoming people and rolling green countryside, that offers residents relatively high levels of personal freedom, low taxes, and minimal regulation. It’s a place where you can live your life as you please, in a great deal of comfort, and with a very low cost of living compared to the West and even other Latin American countries. It’s little wonder that Europeans have been heading to Paraguay for years now, to seek out new business opportunities, see other parts of the world or retire in peace and quiet.
Furthermore, the country’s dual residency laws and benefits are among the best in the world, and among the easiest to obtain for outsiders. Foreigners who have been granted Paraguayan residency can choose to live in the country permanently, or live elsewhere, all while retaining dual residency rights – a perk which is practically unheard of elsewhere. Most countries impose a minimum annual period of residency to retain the relevant permit. Paraguay’s moderate dual residency laws, meanwhile, are much more in keeping with the new wave of mobility which has emerged in recent years, prompted in part by the pandemic and subsequent pivot to remote working.
Dual residency – and dual citizenship, which is usually the next logical step for foreigners – have a reputation for being long, cumbersome and expensive processes. Depending on the country in question, they can also result in financially disadvantageous systems of double taxation.
The application for Paraguayan citizenship, or dual citizenship with Paraguay, is inexpensive and straightforward, requiring only a $5,000 bank deposit and no minimum income, following an initial residency period of as little as three years. You don’t even necessarily have to be residing in the country to maintain residency or apply for dual citizenship. And the process became even simpler in 2014, after Paraguay officially joined the Hague Convention. This diplomatic step means that documents from the US government – among others – are now accepted at face value in Paraguay, based on an apostille issued by the US State Department. So going through the Paraguayan Consulate is no longer required for citizenship, removing another step from the bureaucratic process.
Your rights as a dual resident
Once you obtain your permanent residency in Paraguay, you will be legally allowed to live and work there – or elsewhere – for life, without losing your status. In this respect, Paraguay differs from many countries where permanent residency comes up for renewal on a regular basis. Here, “permanent” really does mean “permanent” – unless residency is specifically revoked by the Paraguayan authorities due to illegal activity, which happens extremely rarely. As a dual resident, you will have lifelong access to the country’s excellent education and healthcare systems, as well as its rich cultural heritage.
Three years into your permanent residency, you will be able to apply for naturalization as a Paraguayan citizen, or for dual citizenship, and obtain a Paraguayan passport. As detailed above, this is a relatively straightforward process, and will allow you to vote and run for office, among other additional benefits. The country allows dual citizenship by reciprocation, so as long as your home country allows dual citizenship, Paraguay will allow it too, and you won’t need to renounce your current citizenship to become a Paraguay citizen, which is often a requirement for citizenship in other countries. Furthermore, Paraguay’s policy of jus soli – or “right of the soil” – means that any children you give birth to while in Paraguay will obtain Paraguayan citizenship at birth.
Finally, with dual residency in Paraguay you will be able to enjoy other benefits within South America’s Mercosur region, opening up attractive business markets and tourist destinations such as nearby Brazil and Argentina at no extra cost or inconvenience. With dual residency confirmed for life, Latin America will be your oyster!
A favourable tax system for dual residents
Defying its history as one of South America’s poorest countries, Paraguay has experienced considerable economic growth over the last decade, and is regularly cited as one of the fastest growing economies in the world today, with a large and expanding informal economy. Minimal government regulation and unfettered access to the Mercosur markets make it a great place for dual residents to start or import a business, or seek out a new career path in an exciting new economy.
Paraguay also boasts an extremely favourable territorial tax system. Only income and capital gains earned in Paraguay are taxed, at a flat rate of just 10%. This means resident pay no tax on foreign-sourced income, making it an attractive option for outsiders with an established business elsewhere (remember, you don’t have to live in Paraguay for any set period of time in order for your residency to be upheld). In addition, Paraguay has no inheritance or estate tax, no net worth tax, no capital duty, no stamp duty, and no capital acquisitions tax.
Should you decide to physically reside in Paraguay, the cost of living is far lower than most European countries, and even those of its South American neighbours. It is possible to live for as little as $1,000 to $1,500 per month, and living expenses drop even further outside of the capital city of Asunción. Local food is cheap and plentiful, transportation is dependable and inexpensive, and you can expect reliable access to all the necessary amenities. When you look at it that way, dual residency in Paraguay becomes a no-brainer decision!
People come from all over the world to take up dual residency in Paraguay, and for all sorts of reasons. And the regulations in place mean they very rarely have reason to regret doing so. In general, dual residency in Paraguay makes most sense for people who live, work and thrive in an international environment, and have embraced the spirit of mobility which has been accelerated by global developments over the past few years.
Anyone involved with mostly online businesses, or in sectors with a largely international scope like shipping, logistics and IT, will most likely be able to benefit from the advantages of dual residency with no negative impact on their everyday life and work. “Digital nomads”, or people with no fixed place of residence or work, are also becoming increasingly aware of the day-to-day advantages of dual residency, particularly in Paraguay. It also makes sense for anyone seeking a better financial situation, as seen in the favourable tax conditions prevalent in the country.
Although dual residency is comparatively easy in Paraguay compared to the rest of the world, the specifics of each case can vary, and getting to grips with a whole new culture, language and social structure can be tiring enough without having to worry about the ins and outs of the bureaucratic process. For this reason, it is always best to seek the help of an experienced, qualified agency to help you with this extremely worthwhile process. Get in touch with us today to find out more about our dual residency services and consultancy.