0% tax on income you earn abroad
The 0% comes from Paraguay's territorial tax system. It covers income from work done entirely outside Paraguay for foreign clients, if you can document the foreign source. Work you do while in Paraguay is taxed. Your home country's rules still apply, and the US taxes its citizens wherever they live.
Get Paraguay residency and your cédula (ID card).
- No income or investment test for temporary residency
- Pairs with your US LLC
Who it's for
- You earn from clients outside Paraguay and do the work outside Paraguay.
- You're leaving your home country, and its rules let your tax residence go.
- You want a second residency as a Plan B.
- You want one local team to handle residency and the ID card.
How Paraguay's 0% works
Paraguay taxes income by source, not by where you live. Income from work done in Paraguay, goods located there and rights used economically there is taxed (Ley 6380/2019, Art. 48). Income from work done entirely outside Paraguay for foreign clients is generally outside Paraguayan income tax.
Two exceptions. Work you do while you're in Paraguay is taxed there, even for foreign clients: 10% VAT plus personal income tax of up to 10%. And services for a Paraguayan taxpayer can count as Paraguayan income even when you do the work abroad.
Keep records that show where you did the work and who paid you: Paraguay can tax money it can't trace to a foreign source. Your home country's rules still apply.
General information, not tax or legal advice.
Who it isn't for
You expect the US to stop taxing you.
The US taxes its citizens wherever they live. Paraguay residency doesn't change that.
Most of your income is US royalties.
US-source royalties paid to someone who isn't a US citizen or US resident are generally withheld at 30%, and as of 2026 there's no US–Paraguay tax treaty to reduce it.
Your home country won't let you go (exit or CFC rules).
Some home countries can still tax you, or your company, after you leave. Spain's exit tax, for example, reaches large shareholdings (over €4M, or 25% and over €1M). A controlled-foreign-company rule can tax a company's profit in the owner's hands. Paraguay residency doesn't switch that off; whether yours applies is a question for a lawyer at home.
You'll keep living in your home country.
Your home country applies its own residency test. If your home, family or work stay there, you can still be its tax resident, and a Paraguayan document doesn't decide that test.
You'll work full time from inside Paraguay.
Work you do while in Paraguay is taxed there, whoever pays you. Spending time in Paraguay doesn't make foreign income taxable; doing the work there does.
You want a passport soon.
Residency and the cédula aren't citizenship. Citizenship is a separate process that takes years longer.
Paraguay vs Portugal, the UAE and Cyprus
Income tax, the route to residency and the paperwork in each country, with official sources.
How Paraguay residency works
You attend the appointments in person in Paraguay.
Questions about Paraguay tax residency
Your US LLC, your home country, US citizens, keeping residency, CRS and the tax certificate.