The landlocked Mercosur member state’s $70,000 residence by investment program is more popular than you may think, especially within Latin-America.
Paraguay launched a unified fast-track residency by investment program in 2013, which requires a minimum investment of US$70,000 into their own Paraguay-registered company. The applicant then has ten years to employ this amount, once he/she has registered the business entity at SUACE (Sistema Unificado de Apertura y Cierre de Empresas – Unified System for the Forming and Closing of Companies)
According to official statistics, between January 2016 and May 2019, SUACE processed 799 applications from investors, the greatest number of whom arrived from Brazil (329), followed by 106 Argentinian entrepreneurs.
In an interview, economist Margarita Peña Concha, General Director of SUACE, detailed the program’s objectives.
“Our mission is to facilitate the opening of companies through transparent and straightforward support and administration. However, most of the foreign businesspeople will need to settle in Paraguay to control their investments,” explained Peña Concha. “Because of the company, they will need the residence permit. It allows them to become a member of the board of directors in the case of an SA (Sociedad Anonima – Inc, Plc) or to become the director of an SRL (Llc). In these cases, foreign company owners must become permanent residents of Paraguay. If the overseas applicant wishes to register a unipersonal company, then he or she also has to become a resident of Paraguay.”
How many investors obtained their Paraguayan permanent residency through the SUACE?
“The foreigner becomes an investor when SUACE issues the certificate and record of investment (Constancia del investor), which document declares the amount of the planned investment. This document is one of the requirements of the immigration process. Last year, SUACE issued 302 certificates of investment. However, this number also includes the applicants, who are partners or co-owners of companies registered by the SUACE. This year, the inflow of investors slowed markedly and from January to April we issued only about sixty certificates, although some of the current investments are exceptionally high.”
Which is the most popular investment sector in Paraguay?
“Ultimately, construction-related real estate projects attract foreign capital. Before, the most popular investment type was the Maquila (reexport tax incentive), which was favored by most Brazilian and Argentinian investors.”
What is the difference between the SUACE Residency by Investment Program and permanent residency through normal procedures?
“Suace provides a fast-track immigration process that is significantly quicker than the regular procedure system. To tell you the truth, this is much more convenient for investors. Because an investor has no more than 15 days to get the permanent residence permit and the ID card, we must offer faster service than the usual immigration channels to help them by reducing the red tape.”
The European Union is considering investment migration programs as part of planned future regulatory efforts. Do you know anything about the future of the Paraguayan Residency by Investment Program?
“Paraguay’s policy is to stay open for investors as well. Paraguay is a welcoming country with a friendly immigration system; we don’t maintain any restrictive policies like in other countries. We don’t expect any obstacles to the program in the future.”
Do you prohibit any nationalities from applying?
“There can be temporarily restricted nations such as crisis-stricken countries, for example. However, this issue can change fast and has more to do with foreign policy than with the company registration.”
Is any exact investment type required in Paraguay?
“The original idea was to bring significant investments, which can generate many jobs. This is still the main objective to reach, to create more jobs for the people of Paraguay.”
Why would investors consider Paraguay? Some of attractive characteristics of the SUACE program include
- The potential for permanent resident status to lead to citizenship. Among other requirements for this, the resident must exercise his or her profession for at least three years in Paraguay to qualify.
- The country’s membership in the US E-2 Investor Visa Treaty.
- A complete tax exemption on foreign sourced income.
- Freedom of movement within Mercosur by use of the Paraguayan ID-card.