Do you want to incorporate in Paraguay? Reading this will help you becoming knowlegeable on the specific tax laws and rates for a LLC which is the most common legal entity in Paraguay.
Paraguay taxes corporate income on a territorial basis. This means that income accrued offshore, from our research, and these things do change, is not subject to taxation. However, income from interest, commissions, and capital gains accrued outside the country, are considered local-source income and subject to Corporate Income Tax. Taxes are low in Paraguay because the income corporate tax rate is 10%. This ranks Paraguay as 34th overall in terms of corporate tax rate worldwide.
The value added tax (VAT) rate is 10.00%, which ranks Paraguay as 47th overall in terms of VAT taxation rate internationally. In terms of other taxation, an employer will contribute 16.5% to the equivalent of a social security fund and an employee will contribute 9.00%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 96hours. Contributing to this is the number of yearly labor tax payments, which is 1 in PY.
Thin capitalization laws are not in effect. This refers to any sort of laws on companies' debt-to-asset ratios.
Distribution of dividends is subject to a 5% additional tax charged on source. Dividends received are usually not considered taxable income. Stock dividends are not considered taxable income, except when represent more than 30% of taxable income of an investor. Dividends are payments of a company profit, voted on by the board, to shareholders. Dividends can be issued as shares of stock, cash payments, or other property.
Capital Gains are considered business income and therefore taxed at a flat rate of 10%. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.
The interest withholding tax rate is estimated at 15%. This should be interpreted that the taxman expects relevant legal entities to withhold 15% of interests paid abroad. The dividends withholding tax rate is 15%. This should be interpreted that the tax authorities expects LLC's to withhold 15% of dividends remitted abroad. The royalties withholding tax rate 15%. This means that the taxman expects companies to withhold 15% of payments abroad on royalties.
There is no known tax on wealth in Paraguay. There are no inheritance and transfer taxes. There is a real property tax. There are many well known credits for innovation, certain economic activities and free trade areas that include tax exemptions and incentives in Paraguay.
The above is not tax or legal advice for your particular circumstances. We are able to help you to find a tax advisor in Paraguay who can give you the proper advice and help you need. Ready to get started? Click the free consultation button above or press incorporate now if you are in a hurry.
It takes approximately 138 hours to file and prepare documents for a Paraguay Civil law (Napoleonic).
The corporate tax is approximately 10% which is 35 in the world.
Owners of a company in Paraguay are not allowed to carry back a loss .
The vat rate in Paraguay is 10% which ranks 46 in the world.
Thin capitalization rules are not in effect.
A corporate director is not permitted, meaning this country is not a good option if you are setting up a structure where you want to protect director liability.
The directors are disclosed in the public registry of Paraguay, Intuit Management Consultancy. Shareholders are disclosed in the Intuit Management Consultancy.
Typically companies take 8 weeks to setup and there are 1 director(s) required and 1 shareholder(s) required at the time of incorporation.
Overall we think Paraguay is a good option and have given it a score of 77 as an IO score, using the Incorporations.IO proprietary formula.
We can help you form a company in Paraguay. Click the button above for a no-obligation quote. We will provide you with all the necessary documents to open a bank account as well as a registered office in Paraguay, which is required by law.
We can help you with your incorporations needs for an initial payment of just $1000.
Easy Step by Step Process:
The standard process typically takes between two (2) to three (3) weeks depending on when we receive all the required information from you. Once we receive your information, we will email you a complete set of documents for your review within 3 working days upon confirmation of payment. After executing the documents, you will need to mail them to us and we will formally submit your application for filing with the Registry. The Registry will then take about 3-8 working days to process the incorporation and produce certificates necessary for opening your bank account.
Applying for Your Bank Accounts:
Incorporations.IO maintains close working relationship within our extensive network of partner banks to help you apply for and receive banking services that are most appropriate to your specific situation. From the time of verification of incorporation it can take (1) one week to (2) two weeks to apply for and receive a bank account. We work primarily with banks that allow for remotely opened accounts to ensure you are ready to do business as soon as possible.
Applying for Payment Processing:
We include introductions to payment processors or merchant accounts with all of our incorporation services. Whether you just need standard credit card processing or specialized services for high risk processing, we have partners that can assist you and are happy to help you with introductions that can empower your business.
Start Online or via Phone:
We can get started for you whenever you are ready via a US$1000 initial payment via credit card. I get notified whenever a payment is made here and would send out the welcome letter and initial forms we would need within 12 hours. If you prefer, we can also process via a phone or Skype call.