Paraguay vs United States
Tax Residency Comparison
Paraguay taxes foreign income at 0% through its territorial system, while United States taxes residents at up to 37%. Americans switching to Paraguay residency save $50,000 - $200,000+ 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 | 🇺🇸 United States |
|---|---|---|
| Foreign Income Tax | 0% | up to 37% |
| Capital Gains Tax | 8% | up to 20% |
| Corporate Tax | 10% | 21% |
| Inheritance/Estate Tax | None | 40% federal estate tax |
| 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 |
Why Americans Choose Paraguay
Save $50,000 - $200,000+/Year
The average americans moving to Paraguay saves $50,000 - $200,000+ annually by eliminating up to 37% taxes on foreign-sourced income.
Territorial Tax System
Unlike United States's worldwide taxation, Paraguay only taxes income generated within its borders. Foreign income is generally exempt.
Location Freedom
While United States 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 United States Tax Problem
Worldwide taxation regardless of where you live
Complex FATCA reporting requirements
State taxes on top of federal taxes
Self-employment tax of 15.3%
Important: Leaving United States
US citizens can use the Foreign Earned Income Exclusion (FEIE) to exclude up to $120,000 of foreign earned income. Paraguay residency provides a legitimate tax residence for structuring.
Our team includes specialists familiar with United States tax law who can help you navigate the transition properly and legally.
Who Should Consider Paraguay Over United States?
Remote Workers
Keep 100% of your foreign-earned income instead of losing up to 37% to taxes.
Entrepreneurs
Build your business without the United States tax burden holding you back.
Investors
Optimize capital gains with Paraguay's favorable 8% rate vs up to 20%.
Retirees
Stretch your pension and investments further with minimal tax obligations.
Frequently Asked Questions
Is Paraguay better than the United States for taxes?
For foreign-sourced income, Paraguay is significantly better with a 0% tax rate compared to the US federal rate of up to 37% plus state taxes. Paraguay's territorial system means only locally-sourced income is taxed at 10%.
What's the tax difference between Paraguay and the United States?
The US taxes worldwide income at rates up to 37% federally, plus state taxes up to 13.3%. Paraguay only taxes local income at a flat 10%, with zero tax on foreign income. Corporate tax is 10% in Paraguay versus 21% in the US.
Can Americans get Paraguay residency easily?
Yes. Americans can enter Paraguay visa-free and apply for permanent residency directly. The process takes 4-6 weeks, requires minimal documentation, and there is no language or investment requirement beyond a small bank deposit.
Explore More Resources
Everything you need to make an informed decision about Paraguay residency
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Last reviewed: February 2026