Tax residency in Paraguay for Spaniards: a practical guide

Among all the searches related to investing in Paraguay, one stands out by name: "tax residency in Paraguay for Spaniards". That is no coincidence: it is considered one of the most accessible in the world.

Is Paraguay a tax haven?

Technically it is not, according to official lists, but it operates under a territorial system: only income generated within Paraguay is taxed. Foreign-source income (a salary, rent or dividends still arriving from Spain) pays no Paraguayan tax. That said, to stop paying Spanish personal income tax (IRPF) you also need to stop being a tax resident there, which is independent of obtaining Paraguayan residency.

Requirements for Paraguayan tax residency

The typical steps described by firms such as Librestado or TopAbogados are: a valid passport, an apostilled birth certificate, an apostilled criminal-record certificate, and proof of a minimum income or deposit (depending on the route chosen). Documentation very similar to what any Spaniard who has processed a Hague apostille for other countries already knows.

The process, step by step

Obtain temporary residency, process the Paraguayan identity card, get the RUC (tax ID, the equivalent of the Spanish NIF), and apply for the tax residency certificate before the DNIT. According to specialised guides, the full process can be resolved in a few months, much faster than equivalent processes in other countries with non-resident regimes.

How much does it cost?

Figures circulating on specialised blogs are around USD 2,500-2,600 for the temporary residence permit plus ID card, on top of which come management fees if a firm is hired to handle the entire process remotely — common among those who cannot travel to Paraguay multiple times.

What treaty does Paraguay have with Spain?

Unlike the situation until recently, Spain and Paraguay now have a double-taxation treaty (DTT) in force. It was signed on 25 March 2023 in Santo Domingo, ratified by Paraguay through Law No. 7,271/2024 (29 May 2024) and by Spain on 29 July 2024 (published in the BOE). It entered into force on 14 October 2024 and has had tax effects since 1 January 2025. It covers Paraguay's IRE, IRP, IDU and INR against Spain's IRPF, corporate tax and non-resident income tax, follows the OECD standard, with rules for allocating taxing rights by type of income (dividends, interest, royalties, capital gains, pensions) and anti-avoidance mechanisms. In practice, this reduces the risk of paying tax on the same income in both countries and gives more legal certainty to anyone moving their tax residency or investing from Spain. Source: Amaral Abogados.