Investing in Paraguay from Spain: the guide nobody told you about

More Spaniards are looking to invest in Paraguay as an alternative to low returns and high taxation at home. It is not a passing trend: media outlets such as OkDiario and Clarín already describe a ‘boom’ in European investors attracted by property returns above 20% a year and an economy growing well above the regional average.

Why has Paraguay become popular with Spanish investors?

Three reasons recur in almost every search: simple taxation — the well-known 10% framework discussed in another article — macroeconomic stability, and entry prices still far below those in Spain or Portugal. In addition, operating in guaraníes does not require complex structures: a foreigner can set up a company or buy property relatively quickly.

Is investing in Paraguay a good idea? What the figures say

‘Is investing in Paraguay a good idea?’ is one of the most common questions, and the honest answer is: it depends on the investment vehicle. Property in Asunción and Encarnación attracts the greatest demand, with rental yields that in Spain are generally only seen in high-risk assets. There are also opportunities in agribusiness, logistics linked to the Bioceanic Corridor, and renewable energy. What does not yet exist is a liquid stock market comparable to Spain’s, so people asking ‘where should I invest my money in Paraguay?’ usually end up considering property or direct stakes in companies.

How to invest in Paraguay without living there

You do not need to move. The most common route for Spanish investors is to: 1) set up a company or buy the asset using an apostilled power of attorney issued in Spain; 2) open a local bank account or use an authorised agent; and 3) delegate management to a trusted administrator. Companies such as Paraguay Investment Group specialise in supporting precisely this type of remote investor.

Risks to consider before investing

Paraguay has only recently obtained an investment-grade credit rating — see our article on credit ratings — and has a less regulated property market than Spain, with lower liquidity when exiting an investment if plans change. It is also important to understand the difference between investing as a non-resident and investing after obtaining tax residence, because the tax burden changes completely.

A practical first step

If the aim is simply to ‘test the waters’ before committing capital, the least expensive approach is to learn about Paraguay’s Investor Pass, explained in the following article, speak to a local law firm that already works with Spanish clients, and compare at least two cities — Asunción and Encarnación — before deciding. Investing in Paraguay from Spain is more accessible than ever, but, as in any emerging market, additional returns come with additional risk that must be assessed using data, rather than social media testimonials alone.