INFOS
Some useful information
Paraguay is officially bilingual: the populations speaks Spanish and Guarani.
Temperatures are between 25°/35° in summer, 15°/25° in spring and autumn and 5°/20° in winter.
The seasons are reversed compared to Europe.
There is a 6-hour time difference from the end of March to mid-October and a 4-hour time difference from mid-October to the end of March.
There are 11 public holidays observed per year. The Electricity norm is 220 V and 50 cycles.
In the capital and now in the countryside, there are many international and regional banks and financial institutions where you can open accounts in Guarani, Dollar, €uro or any other currency. The banking system is extremely secure. Banks are open to the public from 8am to 1pm.
The exchange rate of the Guarani is completely free and you can change your currencies in banks, financial institutions or on the street.
The $ is currently worth 7000 Gs and the €uro 8000 Gs and all credit cards are accepted, especially Visa and Master Card.
The cost of living is stable and low
The minimum wage is currently just under $400 and domestic staff receive around $200 per month for room and board. A full grocery cart at the supermarket is considered to cost 3 times less than in Paris.
The price of cars and vans is slightly lower than in Europe.
A litre of petrol costs $1.30 and a churasqueria-type restaurant costs less than $20. Tips are theoretically about 5%.
Most shopping centres and supermarkets are open 362 days a year, from 9am to 10pm.
A nice house of 3/400 m² will be worth between $500,000 and $1 Million and there are more and more very luxurious flats, especially in the area of the World Trade Center, La Galeria and Shopping del Sol where prices are equivalent to those of a nice house.
All strata of the population benefit from primary education and more and more young people are going to universities. While law and medicine are always in demand, the most popular are currently business administration and management, commerce, and the fast-growing careers of veterinarians and agronomists.
The middle class has been growing rapidly for about 15 years and this is very beneficial to the country.
The administration in general is not too restrictive and many things can be “arranged”.
For all important purchases (cars, houses, farmland, etc.) you have to go through a notary who gives you a title deed. Transactions are almost all in $.
The Napoleonic Code is more or less in force and the transactions at the notary’s office are more or less the same as in France.
Before selling you a property, the notary will check whether the seller has the right to sell, whether he is up to date with his tax obligations and whether the property exists in the land register and has the right to be sold.
A foreigner (who has exactly the same rights and duties as a Paraguayan) may purchase a property in his own name, in the name of a company or a limited liability company.
The taxes and fees for the transfer of a property are about 4% of the sale price, often to be shared between seller and buyer by agreemen.
ASUNCION
On 15 August 1537, Juan de Espinosa y Salazar stopped briefly in a bay on the left bank of the river to get supplies. As he was well received by the natives.
he decided to build a fort there. It was Assumption Day, hence the name Asunción.
This fort really became a city in 1541. The same year, the natives destroyed Buenos Aires. The Spaniards fled to Asunción. The city became the centre of a large Spanish colonial province that included part of Brazil, present-day Paraguay and northern Argentina.
Today, 600,000 inhabitants live in the city itself, 1,400,000 in Greater Asunción (Luque, San Lorenzo, Fernando de la Mora, Mariano Roque Alonso, Lambaré, Ñemby, Villa Elisa) and 2,300,000 in the central department, which represents more than 30% of the total population of Paraguay.
The population has increased a lot during the last decades due to the economic boom of the last years.
Asunción is a very pleasant city to live in on a daily basis with at least 300 days of sunshine per year.
The summer (January, February and March) is a bit hot, but everything is organized to cope with the heat. The thermal sensation is less than during summers in Europe.
A temperature of 35° in Asunción is much easier to bear than 30° in a European metropolis.
The average minimum temperature is 18.2° and the maximum 28.2°.
The total rainfall is 1,333 mm per year.
Asunción is located on the Paraguay River, opposite Argentina. You only have to cross the Remanso bridge, about ten kilometres from the city centre, to find yourself in the Chaco.
Its geographical location is ideal, in the middle of South America, less than 2 hours by plane from other major capitals such as Sao Paulo, Buenos Aires, Santiago de Chile, La Paz, Lima, etc….
The city is very spread out and, rare in Latin America, there is not really a residential area. Each district has its superb villas (really there are some very beautiful ones) and its popular houses.
In the last 20 years or so, large luxury shopping centres have sprung up.
They are almost always open 7 days a week. The first two were the Shopping del Sol and the Mariscal Lopez. Recently, new ones have been built regularly, especially in the outlying areas, which are in full development. (Mariano Roque Alonso, San Lorenzo, etc…)
The hotel infrastructure (Sheraton, Ibis) is now important for costs ranging from $40 to $150.
Especially in the area of the World Trade Center (4 towers of 20 floors) and the Shopping del Sol and La Galeria.
Also from the Jardin Botanico to the Presidential Palace, the Costanera, about 5 km long, has just been completed.
The city is developing harmoniously without causing too many problems of insecurity. This is the new face of Asunción.
The nightlife is nice. There are many nightclubs, pubs and restaurants, especially in the so-called new city centre, towards the World Trade Center, the historical centre being more dedicated to administrations and old businesses.
There are 4 beautiful golf courses in and around Asunción.
Daily life is much easier and cheaper than in Europe.
Asunción has been one of the cheapest capitals in the world for some years now, considering its standard of living and quality of life.
The city is all year around full of greenery with flowers in full blossom.
ECONOMY
Paraguay’s economy is liberal and has been booming for about 15 years.
Free entry and exit of capital and opening of bank accounts in all major currencies.
The non-interference of the state in the economy allows a dynamic development of private companies, whether they are Paraguayan or foreign. The population was 7,250,000 in 2020.
At least 50% of the population is under 30 years of age and increasingly has a higher education.
The labour force is abundant and is now much more qualified than a decade ago.
Some figures:
-GDP: Is increasing significantly every year. In 2019 it was $46,360 million, in 2020 $45,980 million and in 2021 $48,281 million, despite the Covid pandemic. The forecast for 2022 is also excellent ($50,083 million according to the B.C.P.).
Thanks to its stability and macroeconomic discipline, it is one of the countries that has best weathered the crisis.
The economic consequences are in the process of being absorbed.
GDP per capita is $5,481
Between 2003 and 2019 the country’s average growth was 4.1% per year, while keeping internal and external public debt and inflation low and stable.
The external debt is $5,592 million and the internal debt is $1,576 million.
The public deficit was 34% of GDP at the end of 2020, but the forecast for 2022 is for a drastic reduction in this debt.
Despite the pandemic, unemployment rate is 5.8% in 2021.
The poverty index has fallen from 39.3 to 15.4% in ten years.
The Central Bank’s international reserves are $9,946 million and the country has 8 tonnes of gold.
The amount of direct foreign investment sets a new record in 2020 with $190 million. This shows the confidence investors have in the country.
Current wealth:
Paraguay is the world’s leading exporter of electricity, a renewable energy source that does not produce greenhouse gases.
The country’s wealth comes from the hydro-electric dams of Itaipu
(the 2nd largest in the world) and Yacireta.
It consumes only 10% of its production.
Agriculture, especially soya (4th largest soya exporter in the world). 90% of sesame production is sold to Japan, which pays 15 to 20% more than the world price thanks to its exceptional quality.
Cattle breeding: Is on an upward curve for several years. The price of a tonne of meat is constantly rising on the international market due to the exceptional quality of its meat. (4th largest exporter of “organic” meat in the world).
The construction industry is becoming more and more important (see the enormous towers, the World Trade Center, the malls such as La Galeria, Del Sol, Pinedo).
Diversity of raw materials: Minerals not yet exploited, iron manganese, gold, silver, precious stones, oil, marble, etc….
-Probability of oil and gas in the High Chaco.
-In agriculture, Stevia, a plant originating from Paraguay, has a bright future since it has been authorised for marketing in the USA and Europe. Rice is also developing strongly and some niche markets such as macadamia nuts can be profitable.
–Bio-diesel will make it possible to cultivate relatively poor land and reduce dependence on oil. For the first time Paraguay will export biofuel.
-Huge titanium deposit apparently discovered in Alto Paraná.
-The search for minerals is just beginning and gold and diamonds have just been found.
-The wood industry should finally take off.
It seems that today investors are moving away from financial assets to real assets and Paraguay is going to be a very interesting and profitable haven for this capital.
TAXATION
Paraguay has the lowest tax burden in South America (excluding tax havens) and probably in much of the world.
VAT is 10%, except on essential goods including rent, where it is only 5%.
The tax on profits, whether from companies or sole proprietorships, is 10%, after deducting absolutely all expenses.
Taxpayers who are not entrepreneurs or traders, such as employees, professionals, etc., also pay an income tax of 10% after deduction of all expenses (food, travel, clothing, etc.).
This tax is the same for everyone above a certain income threshold. There are no different tax brackets, it is 10% for all taxpayers.
Finally, the tax on dividends is 8%, unless the dividends are reinvested.
Property taxes are very low.
For example, for our building, which is a major construction, the annual tax is about $1,500. There is no wealth tax apart from this property tax.
There is no direct capital gains tax. Only on the sale of a property is there an exemption of 70% of the declared value and the tax is 10% on the remaining 30% (considered as profit on resale), less expenses.
Social security and pension contributions are 9% for the employee and 16.5% for the employer.
It should also be borne in mind that there is often a significant difference between the figures communicated to the tax authorities and the reality.
