Paraguay is often referred to as the heart of South America and it’s not hard to see why.
It’s a green nation with spacious, modern cities and a friendly local population. If you’re tired of concrete jungles and crowded tourist spots, some time spent in Paraguay may be just what you need.
In this article, I’m going to go over the key benefits and considerations for those who want to retire in Paraguay!
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Where is Paraguay
Paraguay is in central South America. It borders Argentina to the southwest, Bolivia to the northwest, and Brazil to the east.
Cost of Living in Paraguay
Paraguay is one of the cheapest countries in the world when it comes to cost of living.
A three-bedroom apartment in the capital city of Asuncion costs less than $700 per month. A one-bedroom apartment outside Paraguay’s city centers will cost you $200 per month or less. Whether you want a large apartment or small studio, renting is incredibly cheap in Paraguay.
Watch this five-minute drone video of the capital to get a feel for Asuncion:
Milk, bread, rice, eggs, and other staple foods are also cheaper than most countries since the local agricultural industry is mostly self-sufficient. Paraguay’s long history of locally-produced crops and livestock means you won’t have to worry about food prices rising anytime soon.
Not convinced? A loaf of bread costs $0.65 in Paraguay. Enough said.
There isn’t much public transportation infrastructure in the country since Asuncion’s tramway was abandoned in 1997 but there are bus routes across most of the big cities. Just don’t expect these busses to be particularly comfortable (unless you’re on long-distance routes).
Overall, I’d highly recommend you buy a car if you plan on retiring in Paraguay. It’s not nearly as walkable as small nations like Malta or Singapore and you won’t find any metro stations like you would in Europe.
It’s worth noting that Paraguay is aiming to have 1,000 electric busses on its streets by 2027 so this may soon change. The plan was developed alongside the EU’s EUROCLIMA+ program which aims to reduce the impact of climate change in Paraguay, Argentina, Colombia, and Panama.
Taxes in Paraguay
Paraguay is the lowest-tax country in South America with a flat income tax rate of 10%. The country doesn’t tax any foreign-source income (except capital gains if you’re a tax resident in Paraguay).
How to Become a Permanent Resident in Paraguay
Becoming a permanent resident in Paraguay is extremely easy.
To become a permanent resident, you need to deposit ₲24,554,600 in a local bank.
Sounds expensive, right?
Well, that actually comes out at less than $5,000.
Furthermore, you’re allowed to withdraw the full amount once your residency application has been granted. This is because the deposit is just a test of financial solvency rather than a national donation you’d have to make for a citizenship by investment programs.
The National Constitution of Paraguay states that only three years of permanent residence is required to be eligible for Paraguayan citizenship by naturalization.
This is great news because Paraguay’s passport is one of the best in the world (more below).
Note: you have to live in Paraguay for three years to qualify for citizenship but you only have to visit the country once every three years to maintain your permanent residency permit.
Paraguay Passport Visa-Free Countries
Paraguayan citizens are able to travel to 84 countries visa-free:
This coverage includes the entirety of Latin America and Europe (except Guyana, Georgia, and Belarus).
In summary, the Paraguayan passport has excellent coverage despite only costing $5,000 and three years to get. If you’re in the market for a second citizenship but don’t want to pay six figures or wait a decade, Paraguay is your best bet.
Safety in Paraguay
The US Department of State gives Paraguay a level 1 travel advisory classification.
This is the lowest-concern classification and only asks travelers to exercise normal precautions when visiting the country. Increased caution is recommended in the areas of Amambay, Alto Paraná, Canindeyu, San Pedro, and Concepcion due to higher crime rates.
This is primarily due to illegal trafficking activity at the border with Brazil.
Paraguay is also much safer than its northern neighbors according to the Global Peace Index:
As usual, watch out for pickpockets and scammers in popular tourist spots.
Conclusion
If you’re looking for a low-cost retirement with favorable tax rates then Paraguay undoubtedly is the best (and cheapest) option. It may not have the ski resorts of Argentina or the beaches of Panama but that’s a small price to pay for the higher quality of life you’ll be able to buy here.
Besides, you can always catch a flight to Argentina for less than $100.
The only consideration I’ll leave you with is the fact that most Paraguayans don’t speak English. Google Translate may be fine for short visits but if you plan to live in the country long-term then I’d highly recommend learning Spanish or even Guarani.
If you’re not sold on living in South America then have a look at my full guide on the best countries to retire in the world for every continent!