Legal Forms of Business in Paraguay: The Right Structure for You in 2026

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You want to run your consulting, software or e-commerce business from Paraguay, or through a Paraguayan company while you travel. This guide compares the legal forms available in 2026, what each costs to set up and run, how each is taxed, and whether a non-resident can manage one remotely without creating tax trouble at home.

Paraguay legal forms of business in 2026: the key figures

Is this guide for you?

Read on if you…

• are a freelancer or founder moving to Paraguay and deciding between invoicing personally or through a company;
• want a Paraguayan company for a mining, agribusiness, software or trading venture;
• live abroad and are wondering whether a Paraguayan entity makes sense for you.

Probably not your case if you…

• only need to register as an individual professional for IRP, covered in our obtaining tax residency guide;
• are setting up a regulated bank, insurer or fund, which follow separate licensing rules.

Which legal forms exist in Paraguay?

Empresa unipersonal (sole trader)

You and the business are one person. You register a RUC with DNIT, choose an IRE regime or stay under IRP, and invoice with VAT. No liability shield: your personal assets answer for business debts. Setup costs almost nothing. Good for testing an idea or low-risk services.

EAS – Empresa por Acciones Simplificada

Created by Law 6480/2019, the EAS is Paraguay's start-up vehicle. One or more shareholders, individuals or companies. Limited liability. No minimum capital. Incorporation is fully online through SUACE with a standard template or custom bylaws, and the company receives its RUC, municipal licence and IPS registration in one flow. Shares cannot be listed publicly.

SRL – Sociedad de Responsabilidad Limitada

The classic small company under the Civil Code. Between 2 and 25 partners holding cuotas – basically quota shares that cannot be freely sold without partner consent. Limited liability. Set up by notarial deed, registered at the Registro Público de Comercio, then RUC and municipal licence. Banks, landlords and larger clients know it well.

SA – Sociedad Anónima

The share company, used for larger ventures, investors and groups. Requires a board (directorio) and a statutory auditor (síndico), annual shareholder meetings and published accounts in some cases. Shares are nominative. Setup by notarial deed and registration, with higher legal and ongoing costs.

Branch of a foreign company (sucursal)

Your foreign company registers a branch in Paraguay with a resident legal representative and assigned capital. The branch pays 10% IRE on Paraguayan profits and remittances abroad are treated like dividends at 15% IDU. Useful for groups, rarely for solo founders.

How do the entity types compare?

Setup cost estimates cover notary, registration and professional fees and vary by provider.

How is a Paraguayan company taxed in 2026?

Law 6380/2019 gives every company the same core package:

• IRE at 10% on net profits. Deductible expenses must be necessary, documented and Paraguayan-invoiced, or justified if foreign. Our business expenses guide has the detail.
• IRE SIMPLE for businesses with turnover up to PYG 2,000 million: simplified accounting, 10% on real or presumed profit. RESIMPLE for turnover up to PYG 80 million: fixed monthly amounts instead of a profit calculation.
• IDU on distributions: 8% to resident shareholders, 15% to non-residents. Combined burden of profit distributed abroad is about 23.5%.
• VAT at 10%, with 5% for certain goods and real estate. Exports of goods and some services are zero-rated.
• Withholding (INR) on payments to non-resident suppliers at 15% of a presumed base, often 4.5% effective.

Paraguay has no minimum tax, no payroll tax beyond IPS, and no capital duty on incorporation. Full detail in our corporate income tax guide.

Can a non-resident run a Paraguayan company remotely?

Legally, yes. There is no nationality or residence requirement for shareholders or directors of an EAS, SRL or SA. In practice you need a legal representative with a Paraguayan cédula and RUC, because DNIT, banks and municipalities expect one. Many founders appoint a lawyer or accountant.

Here's the catch, and it is not Paraguayan. If you manage the company from Berlin or Lisbon, your home country may treat it as tax resident there under place of effective management rules – basically, where the real decisions are made. It may also treat your home office as a permanent establishment (PE) of the Paraguayan company, taxing part of its profits. Controlled foreign company rules can attribute passive income to you personally.

So the structure only works cleanly in two cases:

1. You are tax resident in Paraguay, with permanent residence or more than 120 days a year, and manage it from there.
2. You have real management in Paraguay: a resident director who genuinely decides, staff, an office, and minutes to prove it.

Paraguay itself defines PE in Law 6380/2019 along OECD lines, so a foreign company with a dependent agent in Paraguay also faces 10% IRE there. If you are leaving, see our ceasing tax residency guide before you take the company with you. For a structured review of entity choice and management setup, see Heavnn's business setup service.

How do you set up an EAS step by step?

1. Reserve the name and prepare bylaws in the SUACE online portal, using the standard template or a lawyer's draft.
2. Identify shareholders and legal representative with cédula or passport details; foreign documents need apostille and translation.
3. Sign electronically and pay the SUACE fee; the Ministry of Industry and Commerce validates the filing.
4. Receive registration in the Registro Público and the company's RUC from DNIT, with VAT and IRE regime chosen.
5. Obtain the municipal licence (patente comercial) and register with IPS before hiring.
6. Open a bank account, which requires the legal representative in person and proof of address.

Common mistakes (and what they cost)

• Incorporating in Paraguay while living in a high-tax country → the company becomes tax resident at home or creates a PE there, and Paraguay's 10% is replaced by 25% to 30% plus penalties.
• Choosing an SRL with a nominee second partner → disputes and forced transfers later; an EAS allows a single shareholder from day one.
• Skipping IPS registration → fines and back contributions at 25.5% of wages once you hire anyone.
• Taking money out as "loans" → DNIT reclassifies them as dividends subject to IDU, with interest and penalties.
• Missing monthly VAT and annual IRE filings → fixed fines per return; see our tax fraud guide.

Frequently asked questions

What is the easiest company to set up in Paraguay?

The EAS, created by Law 6480/2019. It allows a single shareholder, has no minimum capital, and is incorporated online through SUACE, which combines commercial registration, the DNIT tax number, the municipal licence and IPS registration. Many founders complete the process in a few weeks for a few hundred dollars in fees.

Can a foreigner own 100% of a Paraguayan company?

Yes. Paraguay places no nationality restrictions on ownership of an EAS, SRL or SA, apart from specific sectors such as border-zone land. You do not need residence to be a shareholder. You will need a legal representative with a Paraguayan cédula and RUC to deal with DNIT, banks and the municipality.

How much tax does a Paraguayan company pay in 2026?

Corporate income tax (IRE) is 10% of net profit. Dividends carry an additional 8% IDU for resident shareholders or 15% for non-residents, so the total burden on distributed profit is about 17.2% or 23.5%. VAT is 10%, and employer social security is 16.5% of wages.

What is the difference between an SRL and an SA?

An SRL has 2 to 25 partners holding quotas that cannot be transferred freely, no board requirement and lighter formalities. An SA issues shares, needs a board and a statutory auditor, and is designed for investors and larger ventures. Both have limited liability and the same 10% IRE and IDU taxes; the SA costs more to run.

Do I need to be in Paraguay to open the company?

Not strictly. Incorporation can be done by a power of attorney granted abroad, apostilled and translated. Opening the bank account is the practical obstacle: banks usually require the legal representative in person. Most founders either travel once or appoint a resident representative for the first months.

Does a Paraguayan company protect me from tax at home?

Only if you are not tax resident at home or the company has genuine management in Paraguay. Otherwise your home country can treat it as resident there under effective-management rules, or tax its profits through a permanent establishment or controlled foreign company rules. Residence first, structure second.

Related guides

• Corporate income taxes in Paraguay
• Business expenses in Paraguay
• Obtaining tax residency in Paraguay
• Specific taxes in Paraguay
• Paraguay tax landscape overview
• Legal forms of business in Mexico
• Legal forms of business in Costa Rica
• All country tax guides

Sources

• SUACE – Sistema Unificado de Apertura y Cierre de Empresas
• Ministerio de Industria y Comercio
• DNIT – Dirección Nacional de Ingresos Tributarios
• Law 6480/2019 (EAS) and Law 6380/2019 – Biblioteca y Archivo Central del Congreso Nacional
• PwC Worldwide Tax Summaries – Paraguay, corporate

This guide is general information, not personalised tax advice. See how we research and review.