The first step is to obtain a residence permit and cedula. The residence permit and cedula also give you the right to work in Paraguay. If you want to do this legally, you will need a tax number from the tax office.
Your personal RUC number
This tax number is called a RUC number in Paraguay. RUC means “Registro Único de Contribuyentes” and is basically a list from the tax office (SET) of who is a taxpayer. Together with the RUC, you will also receive your first invoice block, making you a fully operational sole trader in Paraguay.
Together with the team of Paraguayprofis, this process can be done within a week. In addition to the application, we also have to go directly to the tax office (SET) in Villarrica once, where there is a compulsory lecture on your rights as a taxpayer. In Spanish; you probably won’t understand a word, but that’s no problem – the man from the tax office speaks so fast that even no Paraguayan understands anything. Your presence will suffice.
Update 2020: Due to the pandemic, the lecture and visit to the tax office is cancelled and signatures can be done in the tax advisor’s office until further notice!
Depending on the size of your business, monthly accounting costs of Gs. 100,000 (Euro 13.-) or more are to be calculated.
For bigger plans: The S.A.
If you have big plans or simply want to solve the liability issue, then setting up a public limited company is a good option. In Paraguay, public limited companies are called S.A. “sociedad anónima”.
An S.A. is a fully incorporated company with its own RUC number, which is independent of your personal RUC number. This means that you, as a director of your limited company, can also invoice it for your services. This has great advantages in terms of optimising your tax burden. This is a complex subject on which we will be happy to advise you individually.
The formation of an S.A. takes approximately 4 months (as of 2021) until it is fully legal. The costs for our service depend on the desired statutes of the S.A. and the desired business model. As a guideline, you can calculate with Euro 2.998,- in 2021, whereby all green costs, the books and the notary are already included. The incorporation is done with our contador through a notary in Villarrica. At least for one appointment you have to appear personally at the notary. After the notary appointment, the first 50% must be paid, in the local currency Guaranies at the daily exchange rate.
In addition to the one-off costs of setting up a company, you must calculate with ongoing costs for bookkeeping of ~Euro 150,- (depending on the business activity, even more) per month.