Cost of Setting Up a Company in Paraguay

Published on September 30, 2025 and written by Cyril Jarnias

Paraguay is attracting more and more foreign entrepreneurs thanks to its business-friendly environment and relatively low costs. However, before embarking on the entrepreneurial adventure in this South American country, it’s crucial to thoroughly understand the various costs associated with creating and operating a business. Here’s a detailed overview of the main expense categories to anticipate.

Initial Outlay: Essential Registration Fees

The first step to creating your company in Paraguay is to officially register it with the competent authorities. This procedure involves several administrative fees:

• Business name reservation: approximately 50,000 guaranis ($7)
• Drafting and registration of articles of incorporation: between 2 and 3 million guaranis ($280-420)
• Registration with the Commercial Registry: approximately 500,000 guaranis ($70)
• Obtaining tax identification number (RUC): free
• Registration with social security: free

In total, company registration fees in Paraguay generally amount to between 2.5 and 3.5 million guaranis ($350-490). This amount may vary slightly depending on the complexity of your structure and whether or not you use a lawyer to assist with the procedures.

Staying Compliant: Compliance Costs Not to Overlook

Once your business is created, you’ll need to comply with various legal and tax obligations. These recurring costs should be integrated into your budget:

• Accounting and tax filings: between 1 and 3 million guaranis per month ($140-420) depending on the size and complexity of your activity
• Annual audit (mandatory for certain companies): starting from 5 million guaranis ($700)
• Annual business license renewal: approximately 200,000 guaranis ($28)
• Social security contributions: 25.5% of gross salary for the employer

These compliance costs can represent a significant burden, especially for small businesses. It’s crucial to anticipate them and integrate them into your financial plan to avoid any unpleasant surprises.

Getting Off the Ground: Initial Investment for Takeoff

Beyond administrative fees, launching your activity in Paraguay will require an initial investment whose amount varies considerably depending on your industry and ambitions. Here are some expense categories to anticipate:

• Office rental: between $5 and $15 per square meter per month in commercial areas of Asunción
• Equipment and furniture: starting from $5,000 for a small office
• Staff recruitment and training: variable depending on your needs
• Launch marketing and communication: budget at least $5,000 for a basic campaign
• Working capital: at least 3 to 6 months of fixed expenses

Depending on your project, the initial investment can range between $20,000 and $100,000 or more. It’s crucial to conduct thorough market research and create a detailed business plan to best estimate your startup capital needs.

Going the Distance: Managing Operational Expenses

Once your business is launched, you’ll need to face recurring operational expenses. Although the cost of living in Paraguay is relatively low compared to other countries, some categories can weigh heavily on your budget:

• Salaries: the minimum wage is approximately 2.5 million guaranis ($350), but qualified profiles can cost much more
• Rent and utilities: variable depending on location, but generally affordable
• Electricity and internet: approximately 1 million guaranis ($140) per month for a small office
• Insurance: starting from 500,000 guaranis ($70) per month depending on coverage
• Bank fees: variable depending on services used

On average, monthly operational expenses for a small business in Paraguay can amount to between 5 and 15 million guaranis ($700-2100). This amount can of course vary considerably depending on your industry and the size of your structure.

Optimizing Your Budget: Smart Strategies to Reduce Costs

Creating and managing a business in Paraguay can prove less expensive than in many other countries. Nevertheless, there are several strategies to further optimize your budget:

• Opt for coworking space rather than dedicated offices initially
• Outsource certain non-essential functions (accounting, IT, etc.) to local providers
• Take advantage of tax incentives offered by the Paraguayan government for certain types of investments
• Invest in training your local staff rather than importing expensive talent
• Use digital tools to automate certain tasks and reduce your operational costs

By adopting a strategic approach and leveraging the advantages offered by Paraguay, you can significantly reduce your operating costs while remaining competitive.

Creating a company in Paraguay can prove to be an attractive opportunity for many foreign entrepreneurs. Although costs are generally lower than in many Western countries, it’s crucial to anticipate them well and plan them carefully. Thorough preparation, good understanding of the local market, and rigorous financial management will be your best assets for succeeding in your entrepreneurial adventure in this promising South American country.