Paraguay is a hidden gem in South America, offering a unique blend of affordability, political stability, and an exceptionally welcoming atmosphere for expats. While it has its downsides, like any country, it presents many opportunities and advantages that make it a compelling place to call home. Here’s a deep dive into what makes Paraguay an attractive destination, along with some challenges to consider.
A Developing Country with a Unique Charm
Paraguay is classified as a developing country, like much of South America and large parts of Asia, Africa, and Eastern Europe. This means it has a lower average income than Western Europe or North America, and its infrastructure is still catching up in certain areas. However, comparing it to Geneva or Melbourne would be unfair—Paraguay offers a different experience, more akin to Brazil, South Africa, or Indonesia. If you appreciate vibrant cultures, lower costs, and a relaxed way of life, Paraguay can be an appealing choice.
Plenty of Space, Less Crowding
Despite appearing small on a map—squeezed between Brazil and Argentina—Paraguay is the 59th largest country in the world. With a population of just over 7 million, it is significantly less crowded than many developed nations. To put things into perspective, Paraguay is more than three times the size of England, yet has a population smaller than the London metropolitan area.
While Asunción and its metropolitan area are the most densely populated, traffic congestion is minimal compared to other major global cities. If you dream of open landscapes, rural tranquility, and plenty of personal space, Paraguay is a fantastic option.
Affordable Cost of Living
Paraguay is one of the most affordable places to live, especially for those earning in foreign currencies. Key factors include:
- Cheap Electricity: Paraguay is the world’s largest exporter of hydroelectric power, ensuring exceptionally low electricity costs.
- Low Food Prices: Locally produced beef is high quality and inexpensive, with a kilo of tenderloin costing around $8 USD in supermarkets.
- Affordable Dining: Even high-end restaurants in Asunción offer large steak dinners for as little as $12-$20.
- Housing Costs: Renting or buying property is far cheaper than in North America or Europe.
Not everything is inexpensive—imported goods can be costly—but local and regional products are very budget-friendly.
A Welcoming Attitude Toward Foreigners
Paraguayans are friendly and hospitable, with a culture that embraces expats. The government also encourages foreign residency and investment. Once you obtain a Paraguayan National ID (Cedula), you have the same rights as citizens when it comes to owning property, starting businesses, and working.
Paraguayans are naturally helpful—whether it’s a shop assistant guiding you through product choices or a local inviting you to share tereré in a rural village. Social interactions are easy, especially if you learn some Spanish.
A Young and Optimistic Population
Approximately 75% of Paraguay’s population is under 40, contributing to its dynamic and growing economy. The country consistently ranks among the world’s happiest nations according to Gallup’s Positive Experience Index. The local mindset values community, relaxation, and enjoying life—making it an attractive destination for those looking to escape high-stress environments.
That said, things in Paraguay move at their own pace. Tasks promised to be done “in five minutes” might take a day or even a week. Adapting to the laid-back lifestyle is essential for expats.
One of the Most Tax-Friendly Countries
Paraguay’s tax system is highly favorable, especially for foreign residents and digital nomads:
- 10% income tax on Paraguayan earnings
- 0% income tax on foreign earnings
- 1% – 10% corporate tax on Paraguayan business profits
- Sales tax deductions: Any sales tax paid on personal expenses reduces income tax liability, meaning many residents effectively pay little to no income tax.
For expats running online businesses or working remotely, this tax structure is incredibly advantageous.
Political Stability & Business-Friendly Policies
Paraguay has maintained political stability for years. Unlike some neighboring countries, it avoids extreme political swings that could disrupt the economy. Business regulations remain consistent, and foreign investors are welcomed. The country operates as a liberal democracy with a pro-business environment, making it easy for expats to settle, invest, and thrive without worrying about drastic political changes.
Is Paraguay Right for You?
If you’re looking for an affordable, welcoming, and low-tax country with a relaxed pace of life, Paraguay is a fantastic choice. Of course, it’s not for everyone—if you need highly developed infrastructure, fast-paced efficiency, or a bustling urban scene, you may find it challenging. But for those who embrace its unique charm, Paraguay offers an incredible quality of life at a fraction of the cost of many Western countries.
If you’re considering a move, check out our guide on obtaining residency and contact us for assistance in making Paraguay your new home!
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