Why Paraguay?

Paraguay is a country where you are a resident customer, unlike the EU. Permanent residency in Paraguay does not give you a lot of nonsensical obligations like in the EU country (conscription, social and health contributions, actions such as compulsory testing, census, etc.). But the fact that you don’t have any “forced” benefits like health insurance (properly “health tax”) doesn’t matter at all, as you can pay for this service on the global free market (I have been using global health insurance with William Russell for several years now).

Paraguay is not greedy like most countries with worldwide taxation. It doesn’t want you to pay taxes on income you didn’t earn in Paraguay (similar to Panama’s territorial taxation of individuals). And it certainly doesn’t wish to pay 40% taxes and levies from you on crypto sales like Slovakia.

Unlike Panama, Paraguay is a member of Mercosur, so only with Paraguayan cedula can you get into other Mercosur countries – Brazil, Argentina, Uruguay, and now Bolivia.

You can use the Paraguayan “proof of address” (called “la vida y residencia”) or Paraguayan national ID (called “cédula”) for the KYC/AML process of your favorite crypto exchange (for example, Binance officially supports Paraguayan residents, similarly Xapo or other services). While the exchange may inform the Paraguayan tax authorities of your transactions, they will throw it straight in the trash because it is your foreign income, which is not only not taxed but not declared in Paraguay (including any dividends from foreign companies you own outside of Paraguay). You can send the money from the crypto exchange to your Paraguayan or Georgian bank and enjoy it via your VISA/Mastercard.

When you cancel your permanent residency in the EU, you will be freed from many of the obligations of permanent residency. Two different continents will automatically become your new home: The EU, where you can live for as long as you like thanks to your EU citizenship, and Latin America, where you can move around a lot of countries using your Paraguayan cedula.

You can also get a Paraguayan driving license – Paraguay won’t take your EU one, unlike any other EU country (two licenses are just enough to avoid unnecessary stress on the road 🙂

When you get stopped by police in your home country, you show them your Paraguayan cedula and tell them you are just transferring to your country of permanent residence (Paraguay). Similarly, when you get stopped by Paraguayan cops in Paraguay, you show them your EU passport and tell them you are transferring to the country you are a citizen of.

What do I need for this, and how does the process work?

You can apply for permanent residency in Paraguayan within two years of obtaining temporary residency. One short visit of three working days is enough to obtain temporary residence. Avoid public holidays when no one is working in Paraguay.

Within three months, you will be granted temporary residence. You can then apply for a cedula (Paraguayan national ID) (either to stay in Paraguay for three months or to make another visit). You must apply for the cedula within six months of obtaining temporary residency. Suppose you missed this deadline and would like to apply for a cedula on your next mandatory visit within one year. In that case, you will need a new apostilled criminal record certificate translated into Spanish.

You must arrive in Paraguay again within one year after your temporary residency has been approved. You can visit Paraguay and apply for permanent residency within two years (precisely 21-24 months) of getting your temporary residency. Like temporary residency, within six months of obtaining permanent residency, you should visit Paraguay in person and apply for a cedula. Suppose you cannot do this and wish to apply for a cedula on your next mandatory visit within three years (as a permanent resident). In that case, you will need a new apostilled criminal record certificate translated into Spanish.

After that, as a permanent resident of Paraguay, you only need to visit the country once every three years.

From your home country, you need:

1. The birth certificate – must be apostilled and translated into Spanish by a legal translator, and the translation must then be apostilled.
2. A valid passport – if you are going to cancel your permanent residence in your home country, we recommend you also apply for a second passport (many countries allow it).
3. Criminal record extract – must be apostilled and translated into Spanish by a legal translator, and the translation must be subsequently apostilled.
4. University diploma (to be legalized usually by the Ministry of Education) – you only need this if you want to apply for permanent residency. It is not required for temporary residence. If you don’t have a university degree (or other technical diploma), you must prove your economic activity in Paraguay to obtain permanent residency. This means that you must be registered with the Paraguayan tax office (we will register you there) and make three monthly VAT declarations (then apply for a “cumplimiento tributario” – a certificate that you have fulfilled all your obligations to the tax office).
5. Marriage (and divorce) certificate (if you have one) – must be apostilled, translated into Spanish by a legal translator, and then the translation apostilled.

Once again, all these documents must be apostilled and officially translated into Spanish (by a state-certified translator), and then the translation must be apostilled again.

First visit to Paraguay (for three working days) – application for temporary residence

The first visit to Paraguay is only necessary for three working days (we usually handle all the formalities on the first day, so the other two days are just a reserve). Public holidays when no one is working in Paraguay should be avoided.

On this visit, you will take all the documents mentioned above. In one afternoon, we will go with “you” to all the necessary authorities (including Interpol, where they will do a “background check”). You will take a photo of the relevant documents, and with the help of our lawyers, you will apply for temporary and later permanent residency in Paraguay.

Second visit to Paraguay (for three working days)

We will then collect your residency card (“carnet de radicacion“) and your cedula (Paraguayan national ID) on your behalf when you no longer need to be in Paraguay. And we will send the picked-up documents to you by courier anywhere in the world.

ThIRD visit to Paraguay (for three working days)

If you want to apply for permanent residency, you should appear in Paraguay within 21-24 months of your temporary residency. To apply for permanent residency, you need a university diploma (the Ministry of Education must legalize it in the country that issued you your university diploma and apostilized it). Suppose you don’t have a university diploma. In that case, you need to be registered with the Paraguayan Tax Office (SET) and complete the tax returns for the last three months (and apply for a “cumplimiento tributario” – a certificate that you have fulfilled all your tax obligations). We at Liberation Travel will happily help you with this whole process.

During this visit, you can apply for a Paraguayan driving license (for both car and heavy motorbike). The whole process of getting your driver’s license takes about 2 hours at the office. You must have a valid cedula to apply for a Paraguayan driving license. If you don’t already have one, you can apply for one during this visit (but you will need a new apostilled criminal record certificate translated into Spanish).

You can also open a bank account during this visit (Banco Familiar or ITAU). If you do not have local income in Paraguay, opening a basic bank account (with a limit of about USD 1000 per month) is possible. Again, to open a bank account in Paraguay, you must have a valid cedula. In
this case, we recommend you open a premium bank account in Georgia, where you can set up your Paraguayan (tax) residency.

FOURTH visit to Paraguay (for three working days)

After three months, you will be approved for permanent residency. Within the following months, you should make another visit to Paraguay and apply for a permanent residency cedula (Paraguayan ID card for permanent residency).

Next visit to Paraguay (once every three years to maintain permanent residence)

You have been permanently resident in Paraguay for ten years. As a permanent resident, you should make at least one visit to Paraguay every three years.

Deregistration of permanent residence in the EU

As long as you don’t want to apply for a mortgage, be a full-time employee of a corporation, or be able to vote in regional elections, I don’t think there’s any rational reason to be a permanent resident in the EU (it’s just a bunch of obligations you want to get rid of). And that’s regardless of whether you live there or not.

I’ve tried to summarise the risks and benefits of losing permanent residence in most EU countries:

Risks of losing residency:

• You lose your firearms license
• you cannot renew your EU driving license (but you can use your Paraguayan license as a tourist in the EU)
• you cannot vote in regional elections (only national)
• you cannot apply for a mortgage/loan in your EU bank (exceptions can be applied for)

Benefits of losing residency and getting Paraguayan residency:

• You may lose your conscription if it is tied to your permanent residency (e.g., Slovakia). Unfortunately, sometimes, it is tied to your citizenship 🙁
• You will eliminate the obligation to pay social/health contributions and taxes! (so you shouldn’t be in your citizenship country most of the time in a year; you shouldn’t have a permanent residence and a permanent apartment there)
• You will get rid of the state’s harassment because it will delete you from many registers – the state will also lose the ability to communicate with you (which is a “feature,” not a “bug”), while you will not lose that ability – you will be able to use your passport to do everything at any state office.
• You will likely have better access to health care in your EU country because you will pay in cash and be reimbursed by a global health insurance company (you will not be a victim of the quotas that the current health insurance companies have signed with doctors)
• Freedom to leave – if there is a lockdown/crisis, you will always be allowed to leave the country to go home (to Paraguay) and always back because you are EU citizens (note that in April 2020, the Czech government closed the border for Czech citizens who could not leave the Czech Republic because of COVID-19 – if they had residency in Paraguay, they could go!)
• Getting rid of many collective obligations (obligation to be counted, blanket COVID testing, etc.)
• On the Paraguayan cedula, you can travel all over Mercosur (Brazil, Argentina, Uruguay, Paraguay, and now Bolivia)
• You get a great tax residency in a country with territorial taxation (all those who don’t live anywhere else for more than 183 days a year can take advantage of it)

Getting rid of it is usually straightforward:

1. You pop down to your local office and apply to cancel your permanent residency.
2. With a certificate from the local authority, you go to the police, where you hand over your national ID and tell them that you are canceling your permanent residence.
3. You then check out with the social and health insurance office (currently, this should be automatically done directly when you cancel your permanent residence). Of course, you can’t be officially employed (if you are engaged in your own company, you get fired) to deregister with the social insurance office. The health insurance company may want proof that you are paying your health insurance elsewhere. The cheapest place to get this certificate (from €40/month) is SafetyWing, where you can get insurance. If you want better insurance covering cancer or heart disease, migrate to William Russel, IMGlobal, or AllianzCare.

And you have just successfully freed yourself. And you’re one step closer to being a global citizen.

Conclusion

According to the flag theory, it is good to have citizenship in one country, permanent residence in another, a bank account in a third country, a business in a fourth country, customers in a fifth country, and physically living in a sixth country. You should choose each country as best as possible for a particular purpose and from a global perspective.

Thinking that a single country can give you this is absurd and naive. The EU, in particular, is entirely unsuitable for most of these things (it’s good to have an EU passport, maybe EU customers, but that’s about it).

Paraguay may not be the country to live in (although it is very cheap). However, it is ideal for permanent residence and tax residency.