Why should you move to Paraguay?

Why should you move to Paraguay?

While small in global impact, Paraguay is actually a large country with a growing population and economy. As it’s subtropical, it’s a great county to go to if you enjoy warm weather. Even though it lacks a shore, beautiful artificial beaches are built on rivers (and bikini girls are present).

As you would with any other country, you need to reflect on what you want in life. You need to figure out your financial situation, your current health and where you will see yourself in the next decade. Most importantly of all, it’s a good idea to visit the country prior to investing in permanent residency, real estate or a business.

 

American Expats Living in Paraguay

 

Paraguay, a small landlocked country with few direct flights, is severely lacking tourism or foreign migrants as it isn’t most people’s radar. In fact, there are only a few thousand Americans living in the country, many of which are dual-citizens with Paraguayan family.

If you are white and blonde, many will assume you are an Argentinean or Brazilian on a business/shopping trip. The few Americans they encounter are likely with some sort of NGO or church mission. Once they do discover that you are an American voluntarily living in Paraguay, prepare to be the most popular person on the block.

Check out Chad, one of the most famous expats in Paraguay. His only claim to fame is that he boasts about how he likes Paraguay on social media, and he gets treated like a rock star.

 

The Economy of Paraguay

 

Paraguay may seem like a backwater, but in the big picture, the country is experiencing economic growth and stability that outshines the rest of South America. Since 2008, the country had an average GDP growth rate of a little over 1%. Taking a look at their supposedly wealthy neighbor Argentina, they have trouble climbing out of the negative growth rate.

Also speaking of Argentina, the Paraguayan Guaraní has been extremely resistant against the dollar in comparison to the Peso. In fact, unlike Argentina, exchanging money is unrestricted you probably won’t have to worry about hoarding dollars under your mattress.

The economy obviously varies based on region, with Asuncion and surrounding areas being the most prosperous. With the large concentration headquarters for private enterprises and public institutions, it is a service-based economy with plenty of banking, entertainment, and government jobs. What you will notice in comparison to developed countries is the variety of small enterprises over national or international chains.

In rural areas, agriculture makes up the bulk of jobs, especially in growing soybeans, raising cattle and other activities geared towards transport. There is also plenty of production to make the country self-sufficient, including grains, root vegetables and tropical fruits that locals demand.

 

Low Cost of Living

 

It’s hard to say that the cost of living will be cheaper for you as everything is relative to where you are coming from and the lifestyle you want to live. If you only like certain imported foods, imported wines and driving a Hummer, Paraguay is the worst country in the world for you.
If you live a semi-modest exist, I have to say that Asuncion, Paraguay is the cheapest and most comfortable city in Latin America to live. Unlike other LA capital cities that are scaling to First World prices, it’s hard to exceed $1,000 per month in living expenses if you live as you did back home.

If you speak Spanish and go apartment hunting on Clasipar, you can find modest two-bedroom apartments between $200-$300 per month in various parts of the city. If you want to splurge, even $600 can get something more luxurious.

As for food, it is always best to stick to what the locals eat, including lots of bread, meat, dairy products, and tropical fruits. A kilo of bananas is a mere $0.60 while your favorite brand of frozen food is likely more than double the price than back home. To get a feel for current supermarket prices, check out Super Seis’s online store.

Consumer goods, especially electronics, is quite the concern for most of Latin America due to import taxes. At the moment, Paraguay has the lowest import tax rates in the region, which is why Brazilians and Argentineans take long bus rides just for the opportunity to save lots of money. Since the enforcement of import taxes are relatively new in 2019, there are many import service you may use that skirt around them.

Paraguay also famously has the lowest electricity prices in the region thanks to their large-scale hydroelectric production. Instead of being in the double digest, it rivals the prices of oil-rich countries like Russia You may check out my post regarding the electricity prices in Paraguay.

As for medical care, this is always quite relative depending on where you are coming from. The public system is very cheap but lacking in quality while private care is multitudes cheaper than anything in the United States. As expected, plans vary based on your age and current health. At the very least, you can buy many medications without a prescription at reasonable prices.

 

Low Tax

 

What may be helping with the prosperity of Paraguay’s private sector is the extremely low taxes, whether it’s for the wealthy or middle class. Unlike most countries carrying the tax burden on the middle class, Paraguay doesn’t start the tax bracket until one earns 36 times the minimum wage. This is typically translated to $13,000, in which it only applies to a small fraction of the population.

As a foreign business owner in Paraguay, the tax rate is a little weird on the surface but ends up being a flat 10%. It is calculated as 20% over the net income of 50% of the price of your services. While it isn’t the lowest in the world, this is a huge load off for wealthy expats from Europe, Brazil or other parts of Latin America.

For those with online businesses, don’t sweat about paying income taxes as Paraguay isn’t looking for it unless it’s all based within the country. The authorities are really only looking for those with large-scale businesses, multi-nationals, real estate investors and the like.

Unfortunately for Americans, local banks participate with FATCA so it isn’t like your money will be off the radar. Although, Paraguay is an extremely friendly country to those wanting to renounce citizenship, so it could be possible to reap the benefits of this tax haven down the line.

How to Obtain Permanent Residence in Paraguay

 

The Language of Paraguay

Coming from someone that lived in 7 other Latin American countries, I think Paraguayan Spanish is a lot more pleasant to pick up for a North American. For starters, they don’t roll their “rr” sounds, which all of my American friends in Mexico and Panama could never do.

You also need to be aware that Guaraní is an official language that is taught in school and depending on where you live, it may be necessary to learn some of it. In some remote rural areas, Guaraní is the dominant language with Spanish being secondary or not used at all. In the capital of Asunción and other major cities, Spanish is almost entirely used.

Before you visit the country, it is recommended that you learn a little of both languages to make immersion smoother. There is a Guaraní dictionary hosted on Scribdb to give you an introduction on basic vocabulary.

 

Education in Paraguay

 

Paraguay has an underfunded public school system, so it’s unfortunate that underprivileged kids are left behind. The upside is that post-education is either free through the government or relatively cheap in private institutions.

A highly recommended private school is the American school of Asuncion as it teaches students in English and Spanish from a young age. There various other bi-lingual schools that even include German, Portuguese, Chinese and French. As expected, the English-speaking schools are more expensive.

The Universidad Nacional de Asunción (UNA) is the largest public university San Lorenzo with lots of satellite locations for surrounding areas. There are 12 main areas of study, covering all of the essentials to a functional society.

 

Safety in Paraguay

 

South America, and particularly neighboring Brazil, is known for its violence and delinquency. Even in the United States, supposedly one of the richest and most developed nations in the world, cities are turning ugly.

For Latin America, is an extremely safe country and violent crime has been plummeting in recent years. The only regions that are ominous for travelers are border towns since they’re plighted by drug gangs and fugitives. In Asuncion or any random town in Paraguay, you can walk around with little fear.

Source: insightcrime.org

Let’s not kid ourselves, considering wages are low, there are always pickpocketers, muggers, burglars, and opportunists. In fact, a growing trend is drive-by motorcycle robberies, mostly targeting people that look like easy targets. As you would in any other country in South America, avoid flaunting wealth, install an alarm and consider getting a dog to greatly mitigate these threats.

 

The Food of Paraguay

 

The cuisine of Paraguay may not be spectacular if you are coming from Italy, but it is very rich and affordable. Fried carbohydrates in the form of yucca, empanadas and the famous Sopa Paraguaya are what fuels this country’s workers. Imagine the fact that a very dense cornbread with eggs and cheese being the national dish.

 

There is no shortage of international cuisine in the nation’s capital, particularly food from neighboring countries and the United States. Some of the hottest chains include Burger King, T.G.I Friday’s, Johnny Rockets, KFC, Hard Rock Cafe, and other familiar brands. If you love Argentinean lomitos, there’s plenty of that in Paraguay.

 

Immigration in Paraguay

While going to a new country with a new language and culture isn’t hard enough, going through the bureaucratic gauntlet to reside legally is a pain the trasero. Fortunately, while there are many steps in the immigration process, the fees aren’t particularly high and the use of a lawyer isn’t an obligation (like in Panama).

On the other hand, it is worth spending the extra $1,000 or so to use an immigration lawyer or fixer to help process the papers quicker. Many of them will have a connection with government offices, assuring that you can skip some lines and will even cover some steps on your behalf.

The great part about their immigration program is that just about anyone with a clean background check, a clean bill of health and approximately $5,000 to hoard in a bank account can get residency in a matter of months. In comparison to other “easy-residence” countries, this place is faster & cheaper to get established than anywhere else in the world.

While you are technically able to lodge a citizenship application after 3 years, it is highly unlikely it will get approved quickly without local family ties or providing significant value to the country. Unlike in previous years, they also want you to live in the country for a significant amount of time before applying as well. Besides, don’t come to Paraguay for quick citizenship and enjoy yourself!

If you would like to get prepared for the cryptic immigration process, check out: Quick Guide to Obtain Permanent Residence in Paraguay.

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