What everyday life is like for foreign residents in Paraguay
Paraguay has retained a lot of its native culture and religions, unlike other South American countries, and the tribal language of Guaraní is still considered the nation’s official language, alongside Spanish. In addition to native Paraguayans and indigenous people – almost all of whom identify as mestizo (“mixed” in Spanish), i.e. of both Guaraní and Spanish descent – the country, and its capital of Asunción in particular, are home to a large number of non-nationals who have relocated from other countries; largely from neighbouring Brazil and Argentina but also from Europe, the Middle East and, increasingly, South East Asia. In total, the landlocked country has an estimated population of 6.7 million, spread across an area of 406,753 square kilometres.
Paraguay is an increasingly appealing option for global citizens seeking dual residency, thanks to its relaxed residency laws, attractive tax regime, welcoming population and agreeable climate. Foreigners don’t even necessarily have to live in the country full-time, or even part-time, to retain permanent residency. But should they decide to relocate and spend at least some time there, it is important to know what to expect, and what everyday life looks like for foreign residents in Paraguay.
Relocating to Paraguay
Getting to and from Paraguay is relatively easy, and the country’s two main airports – Silvio Pettirossi International Airport and Guaraní International Airport, serving Asunción and Ciudad del Este respectively – offer flights to international destinations all over the world, with most major airlines. Alternatively you can make the short drive across the border from Ciudad del Este to Brazil’s Cataratas International Airport in Foz do Iguaçu, which is similarly well-connected. And if you’re looking to ship your belongings as you relocate, you can do so via the country’s main port of Villeta, located near Asunción, or other large ports such as Encarnación or San Antonio.
Once you’re settled in, you’ll find that the local population are generally welcoming and receptive towards foreigners, often inviting them to take part in the village fairs and parades which take place regularly throughout the year. This is a good opportunity to get to know the local culture better, from the best vantage point and with the best guides possible.
Although Paraguay is a developing country where a significant amount of the population live in poverty, crime is not a major issue outside of the big cities. Even in metropolises like Asunción, where pickpocketing is a common occurrence, common sense measures like keeping your belongings safe on your person should be enough to guarantee your safety. Sensationalist media reports, coupled with a penchant for corruption and money-laundering among certain echelons of society, have unfortunately left the country with an less-than-ideal reputation with regards to crime, that doesn’t do its friendly population justice.
Paraguay has a subtropical climate, and experiences both dry and wet seasons throughout the year, in keeping with its South American neighbours. Because of the country’s lack of mountains, sea or any other natural barrier, the wind in Paraguay can be extremely strong, reaching up to 160 km/h, which has a significant impact on the local climate and agriculture. Warm wind blows in from the Amazon Basin during the summer months (May to August), while cold wind descends from the Andes over the winter season (October to March), and the temperature can vary from average highs of 28.9°C to average lows of around 18°C.
During warmer spells, residents can make the most of Paraguay’s natural beauty and expansive countryside, as well as impressive biodiversity and natural features such as beaches, waterfalls, hiking trails and vast lakes. There is no shortage of natural attractions in Paraguay for lovers of the great outdoors!
Healthcare & Education in Paraguay
Healthcare in Paraguay is state-funded, although many expatriates prefer to take out private health insurance, since the standard of facilities and service is often superior. Travelling to nearby Brazil is also a frequent option for more serious treatments or operations. Hospitals are well-equipped in Asunción, albeit less so in the provinces and countryside.
Education in the country is state-funded too, and Elementary School (Educación Primaria) is mandatory for children between 7 and 13 years old. High School (Educación Secundaria) is then provided for children up until the age of 18. The education system has improved greatly in recent years, and foreign residents can also decide to send their children to any one of a number of excellent international schools. These include the Pan American International School and the American School of Asuncion, both of which teach in English, and the Deutsche Schule Asunción which focuses on German-language education. Most of these international schools can be found in the capital city of Asunción, but there are some exceptions, like Ciudad del Este’s British School.
Finally, Paraguay’s universities include domestic institutions like the National University of Asunción and the National University of Itapúa, and prestigious international universities such as Columbia University of Paraguay, the German University Paraguay, and the Three Frontiers International University.
The Economy
As a founding member of Mercosur, a trade group with Brazil, Argentina, Uruguay, and Venezuela born from the signing of the Treaty of Asunción in 1991, Paraguay has emerged as a major economic force in South America in recent years. The nation’s rate of growth between 1970 and 2013 was 7.2%, the highest across the entire continent.
The country’s Gross Domestic Product of 35.3 billion USD is split between services (54.5%), industry (27.7%) and agricultural production (17.9%), and its primary export products – typically to nearby Brazil, Argentina and Chile – are soy beans (of which Paraguay is the world’s fourth largest producer), tung-oil (world’s second largest producer) and stevia (world’s second largest producer). Paraguay’s other major exports include beef and wheat, and it is also the world’s sixth largest exporter of corn. Local industry has expanded significantly in recent years, and is the main sector of employment for foreigners living in the country.
Paraguay’s currency is the guarani, and the current exchange rate is approximately 7 guarani (PYG) to the US dollar (USD). Despite experts predicting a sharp rise in Paraguay’s inflation rate, it has remained below 10% in recent years, thanks in part to former President Nicanor Duarte’s economic reforms and austerity programs. Overall the country has a low cost of living, even by South American standard. Rent, public transport, water, gas and electricity are all eminently affordable.
Working in Paraguay
Working in Paraguay requires a permit, but these are relatively easy to obtain for “skilled” jobs, since they are of measurable benefit to the Paraguayan economy, and the country is currently experiencing a dearth of skilled workers. Make sure you have copies of your official documents, including passport, CV, employment contract, educational certificates and records of achievement, when applying for a job and a work permit. References from previous employers are a bonus too.
If you are looking to start a business or expand one that is already in operation elsewhere, Paraguay is as good a place as any. Minimal government oversight, combined with unrestricted access to the Mercosur markets, make it an idea location for dual residents to forge ahead with their business plans, or pivot to a new industry altogether in an exciting new regional economy.
Foreign residents working in Paraguay are required to pay income tax on earnings within the country, and according to the country’s progressive tax system, the amount of income tax paid varies according to the total amount earned, minus expenses. However, Paraguay has no inheritance or estate tax, no net worth tax, no capital duty, no stamp duty, and no capital acquisitions tax, and residents pay no tax on foreign-sourced income, which is one of the many reasons Paraguay is viewed so favourably by foreign business owners.
Everyday life in Paraguay is unique in both South America and the world, and it can take some getting used to, especially for foreign residents who have previously lived in Europe or North America. But despite its status as a developing country, the country is an excellent place to start a business, a family, or a whole new life! As a dual resident, you will be able to take advantage of the best aspects of two different countries at once – from their culture and traditions to educational and business opportunities, and so much more.
Making the first move towards obtaining residency in a new country can be daunting, which is why it is always worth seeking out professional advice on how to make the most of this fantastic option. Get in touch with Strategicasa today to find out more about what everyday life is like for foreign residents in Paraguay, and how you can get started on the path towards dual residency.