Starting a business in Paraguay

Pman Active member

52POSTS

15 years ago

I have no concrete plans, this is just out of interest.

How hard is it to start a business in Paraguay (lots of bureaucracy, paperwork?)?

-I guess you have to register at the Camber of Comererce, but what else do you need to oficially do?

-When you start for example a small hotel, do you need permission from the municipality and if so do people in generally do this or just don't bother with it/bribe somebody?

-I read somewhere that you pay 10% taxes, can someone confirm this ?

See also

Living in Paraguay: the expat guide - Guide
Enquiry about migration to Paraguay - 5 Replies
Moving from the UK to Paraguay - 3 Replies
Teaching in Paraguay - 7 Replies
immigrate to Asuncion, Paraguay, start a new life... - 10 Replies
Want to start a simple online business in Paraguay - 6 Replies
The jobs that are the most in-demand for expats in Paraguay - 2 Replies

Nic'oPY Contributor

134POSTS

15 years ago

Depends mostly on where and what you wanna do. If you want to start something within Asuncion self it may give you a headache faster than you hoped for.

Wife and I have a small cake-shop that's unfortunately in Asuncion. Even for a small business like ours we have to have a book-keeper. She registered us in the Minesterio de Hacienda to whon you pay that 10% sales tax. Then we also had to register with the municipality and thats where the head-ache's start.After that Supermarket that burned down and where almost 500 people died in 2002 they've gone ape here, almost no inspector wants to give his\her permission for a shop to open.
Of-course with a bribe anything is possible, but we've been operating our shop now for 5 years and still have no permission from them... They want bribe money, and I'm not gonna start with that, because where is it gonna end then... They come once a year, try to frighten us and then they're gone.
That said for small businesses (movement of up-to G100.000.000 per year) for bigger ones it gets a bit more complicated but not too much, meaning the control you have to keep over your countability books, but otherwise I can't see lots of trouble, and of course the further you go from the urban-areas the easier it gets.

The problem of starting up shop here for expats in my opinion is that a lot of people can't get used to\can't except the living standards they will have to live by if that shop is their only income.

Pman Active member

52POSTS

15 years ago

So you actually can run the shop without the permission from the municipality as long as you can stand the BS from the inspector?

What is going to happen if you never get the permission from the municipality, do they give a solid reason not to give you the permission?

Also people that rent out rooms or have small hostels/pensiones, do they pay taxes/register themselves? Like in a lot of Latin American countries there seems to be a big grey area. I always wonder when I stay at some hostels if they are registered and pay taxes, especially the smaller ones with no signs outside etc.

Nic'oPY Contributor

134POSTS

15 years ago

Sorry, I omitted one thing. We did apply for a "patente" with the municipality 5 years ago. In theory one can't open your shop\business without a "patente"\permission form them, but like we're living proof of...聽
Not having a "patente" means I cannot open a bank account in our shops name, but we solved that.We just made ourself members of a local cooperative.
It also means we cannot put up a sign in front of our shop as they can fine you for that directly without any warning, we solved that too by every now and then putting up street-banners in-front of our shop, and currently I'm working on a sign of our shops full name that I'm gonna bolt to the wall...
They come (always just before Christmas) and tell us we cannot operate because we don't have a "patente" and because of this and that. I just tell them we applied for one 5 years ago, and if they have a problem they can close us.We are small-fish, and I guess because of that we're just not worth the hassle.
And you may know, all those hotels\hostels without any signs most certainly doesn't pay one cent tax.

barrister_py ViP

104POSTS

15 years ago

Hi Pman,
there is a one stop shop for opening new business called SUAE.聽 they advertise costs of USD 250 or so and 25 days.聽

More info:

the actual website of the SAUE apparently is not working now (I couldnt open).

greets,

PS: tax are so low here that it doesnt make sense working on grey or illegal.

Jose

1 member reacted to this post

Pman Active member

52POSTS

15 years ago

Great info guys, thanks a lot!

Does anybody know if there are different regulations for opening for example a restaurant or a hotel.

barrister_py ViP

104POSTS

15 years ago

in fiscal terms is more about sales threshold so it does not matter whether it is an hotel or restaurant.

then, in terms of sanitary issues eg: with local municipality and Ministry of Health... yes it does matter and there are different regulations.

Best,

Nic'oPY Contributor

134POSTS

15 years ago

Ministry of Health is only needed when you make products that you then sell to a second party and they then sell it to the public, if you sell directly only to the public they are not needed, believe me, we made that fault in the beginning too.

vcyanco Member

1POSTS

13 years ago

I am considering of moving to Paraguay and live there. I have my retirement so I am not concerned about my finances. That said, I would like to do something in Paraguay to keep me busy and at he same time help the local nationals.

Best Regards

Vassil Yanco

michaeldon Member

23POSTS

12 years ago

#10

Hi guys

A friend of mine is interested in a business in paraguay with me as a co-investor.

I live in Bulgaria and the taxes here are veery similar to Paraguay (10% flat tax), but I would not advise anyone to come here and open a business, at least to sell to the locals. Even a hotel is not a good idea as there were so many built pre-2007 and now the crisis has made things worse. Here I would advise an export business or an outsourcing business.

Is Paraguay similar or do you see interesting opportunities to set up a business focused on the local market?

paulopereirra ViP

1322POSTS

12 years ago

#11

hello,

what most people say on the spanish forum concerning this destination, is to spend a few weeks in situ and look for yourself.
As you are aware, many spanish are looking at聽 PY as possible destination, easy integration due to language and, a "virtual" increase in purchase power.
If you speak spanish you may read on a few post how cost of living there is not that low when compared to spain, and utilies and food are cheaper in Portugal.

Unless your in situ and conduct a feasibility study and business planing for your activity with or withouth proper consultant, advices you will get will always be limited.

Main factors if actraction is some "ease" to get the paperwork , and lower regulation and taxation for business.
One possible easy way, and since transports are not performing, is to rent an house wil multiple bedrooms, furnish them and put in the rental market.

If business is not good in bulgaria, power of purchase in PY is also not that high.

GuestPoster03771 Guest

0POSTS

12 years ago

#12

Hi guys! there are plenty of business opportunities in Paraguay.

The Paraguayan economy has experienced a 13% growth rate this year, being the fastest-growing country in the Americas, so I would definitely say is a good place to start a new business.

Taxes are low (as you mention, VAT 10% flat rate, on the other hand Income Tax is only 15%) , land is abundant, cheap and fertile, the population is young and willing to work (and consume) and like we Paraguayans say "everything is yet to be done".

Also, since there is no minimum-capital requirement, you can incorporate a company with 1,000 EUR worth social capital, if you would like to "test the playing field".

What kind of business opportunities are you guys looking forward to?.

Recently, couple of friends of mine (Belgian expats) opened an innovative fast food restaurant. The menu includes cheap popular paraguayan dishes and Belgian delicatessen (waffles and belgian fries among others). Another success story: A czech national, married to a friend's brother (Paraguayan national) recently started her own Czech Beer Bar and Restaurant. I'd say give it a go...

1 member reacted to this post

paulopereirra ViP

1322POSTS

12 years ago

#13

not that friendy.
One can incorporate in Europe for 1聙, and has many spanish people say on a long post - /forum/viewtopic.p … =6#1332824 - country has very little appeals and not that great quality of life or reduced cost of living.

GuestPoster03771 Guest

0POSTS

12 years ago

#14

paulopereirra wrote:
not that friendy.
One can incorporate in Europe for 1聙, and has many spanish people say on a long post - /forum/viewtopic.p … =6#1332824 - country has very little appeals and not that great quality of life or reduced cost of living.

Hi Paulo, thanks for sharing!

When talking about running a business I dont think you'll get much profit out of investing 1 EUR as starting capital . When refering to social capital I imply that with EUR 1,000 (PYG 6,000,000) you have a fully functioning company with capital to start operating.

Regarding the incorporation of a company in Europe, each European country has its own rules about company formation (minimum capital requirement and others), but I know at least Spain requires a minimum capital of EUR 60,000. It appears Bulgaria also has a minimum capital requirement.

I read the thread you shared and from the 3 or 4 pages I read all I saw were discussions about business plans and working conditions (maybe I havent found the specific post you mention, could you please give me other details on the post so I can individualize it?).

If by not that friendly you mean not easy to go around to do business, I agree with you, if you dont speak the local language or if you try to conduct business as in Europe or America without any consideration of the cultural factors you probably WONT have it that easy.

But, if you mean friendly in a general sense, I can say, and I think most foreigners living here or who have ever been to Paraguay will agree with me on this, that there are hardly any friendlier people
around, latin americans in general are very very very friendly and warm.

Finally, I think its a bit unfair to say that Paraguay has little appeals. Coming from a Paraguayan you may not find this information to be objective so I am referring you to concrete written examples:

[url=members.virtualtourist.com/m/a924a/8e0/]http://members.virtualtourist.com/m/a924a/8e0/[/

[url=whyparaguay.com/blog/2013/4/9/so-do-you-like-living-in-paraguay \]http://www.wh
It would ultimately depend of what you are looping for and what you consider appealing conditions to be.

Regarding quality of life... I know Paraguay is not exactly Europe, the infrastructure, public transport system and the civil culture might not be precisely refined, but we pride ourselves in the fact that we are the happiest people in the world..(countries with high living standards like Germany and Finland don聮t qualify as high in terms of happiness rankings).

[url=whyparaguay.com/expat-lifestyle/2013/1/21/paraguayans-among-happiest-in-the-world]ht

So, maybe its a personal impression, but I am taking a guess that someone considering moving out of Europe or America to Paraguay must be looking for a relaxed atmosphere, sun, slow paced life, sustainable and low-intensity business opportunities with high or moderate returns, among others. I think we are champions in all those aspects!.

Having said that, there are plenty of business in Paraguay like I said before. When combining little capital, commercial and creative vision, local cultural expertise and determination any business initiative can flourish in Paraguay.

Warm regards from Asuncion,

1 member reacted to this post

paulopereirra ViP

1322POSTS

12 years ago

#15

hi,

Do not wish to deviate from the original posting.
Have to agree that regulation is a bit "lower" in PY compared to Europe.

Anyways, in spain, 60K are required for a SA -

Others form of entity requires way less..

and UK is top notch for inception of corporations.

Understand cllamosas point of view defending your country, i do the same with Portugal.
Allow me to maintain my perspective on the subject.
Pman original post is dating for a couple of years, hope he has suceed in his venture.

stevosoparo New member

5POSTS

11 years ago

#16

Hi I have been working as a teacher and school head and now planing to open a small school in Paraguay. I was wondering if some one can help me with more information. I am also looking for partners. Stevo

Christine ViP

42879POSTS

11 years ago

#17

Hi Stevo,

What information are you looking for?
For business partner you might post an advert in the business partner in Paraguay section.

Thank you

stevosoparo New member

5POSTS

11 years ago

#18

Thanks for the tip and I am also looking for people who have opened a school before or they are working for a school, who can give me more information of the process of opening a school, best area for a middle class school for kids. Myself I am planning to take a US$5000 deposit visa thing and see if this is a good way to organise your visa (I am Australian national)? So if someone know more in this area please let me know. Thanks

paulopereirra ViP

1322POSTS

11 years ago

#19

bdisandro9 New member

7POSTS

11 years ago

#20

Not a business,but investment. Possible in a bank deposit for immigtlration cedula. May buy farming land. For the more immediate future i am concerned with banking solvency and interest rates. Is it possible to get a good bank like rabo or govt bank to pay 8%. Its more than usa banks. I tried to look on line and its not clear i see some incthat ball park,but it may be in guar money. Does it depteciate against dollar,much?

Closed