Paraguay vs Chile
Tax Residency Comparison
Paraguay taxes foreign income at 0% through its territorial system, while Chile taxes residents at up to 40%. Chileans switching to Paraguay residency save $35,000 - $145,000+ per year on average, with a fast 90-day process and only a $5,000 bank deposit required.
Side-by-Side Tax Comparison
| Category | 🇵🇾 Paraguay | 🇨🇱 Chile |
|---|---|---|
| Foreign Income Tax | 0% | up to 40% |
| Capital Gains Tax | 8% | up to 40% |
| Corporate Tax | 10% | 27% |
| Residency Timeline | 90 days | N/A |
| Investment Required | $5,000 bank deposit | N/A |
| Physical Presence | Once every 3 years | 183+ days/year |
| Path to Citizenship | 3 years to citizenship | Varies |
| Double Tax Treaty | Paraguay has a double tax treaty with Chile | |
Why Chileans Choose Paraguay
Save $35,000 - $145,000+/Year
The average chileans moving to Paraguay saves $35,000 - $145,000+ annually by eliminating up to 40% taxes on foreign-sourced income.
Territorial Tax System
Unlike Chile's worldwide taxation, Paraguay only taxes income generated within its borders. Foreign income is generally exempt.
Location Freedom
While Chile requires 183+ days presence, Paraguay only requires a visit once every 3 years to maintain residency.
Fast Process
Get permanent residency in just 90 days. No years of waiting, no complex point systems, no quotas.
The Chile Tax Problem
High top marginal rate
Worldwide taxation for residents
Political instability affecting policy
Rising cost of living
Important: Leaving Chile
Chile has worldwide taxation. Paraguay offers territorial taxation and easy residency for Mercosur citizens.
Our team includes specialists familiar with Chile tax law who can help you navigate the transition properly and legally.
Who Should Consider Paraguay Over Chile?
Remote Workers
Keep 100% of your foreign-earned income instead of losing up to 40% to taxes.
Entrepreneurs
Build your business without the Chile tax burden holding you back.
Investors
Optimize capital gains with Paraguay's favorable 8% rate vs up to 40%.
Retirees
Stretch your pension and investments further with minimal tax obligations.
Frequently Asked Questions
Is Paraguay better than Chile for taxes?
For foreign income, Paraguay is dramatically better with 0% tax versus Chile's 40% top rate. Paraguay also has a double tax treaty with Chile, providing legal certainty. Corporate tax is 10% in Paraguay versus 27% in Chile.
What's the tax difference between Paraguay and Chile?
Chile taxes worldwide income at up to 40%, capital gains at up to 40%, and corporate profits at 27%. Paraguay taxes only local income at 10%, has zero tax on foreign income, a 10% corporate rate, and a double tax treaty with Chile.
Can Chileans get Paraguay residency easily?
Yes. Chilean citizens enter Paraguay visa-free and benefit from Mercosur association agreements. The process takes 4-6 weeks with standard documentation, and the existing tax treaty adds legal certainty to the arrangement.
Explore More Resources
Everything you need to make an informed decision about Paraguay residency
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Last reviewed: February 2026