Setting Up in Paraguay: SA, EAS and the Territorial Regime
The EAS cut incorporation from months to 24 hours, but the four taxes that make up the system rarely appear together in one place.
Content about setting up a company in Paraguay usually settles the matter in one line: “10% VAT, sole trader, EAS or SA”. That describes a small fraction of what actually goes into the decision.
The Paraguayan tax system, reorganised by Law No. 6,380/2019, has four moving parts — not one. And the choice of corporate form shifts the incorporation timeline from days to weeks. Neither point tends to appear with the rules cited.
This article separates the two decisions: which corporate structure to choose, and how taxation on it actually works.
SA or EAS: the choice that changes the incorporation timeline
The Paraguayan Civil Code (Law No. 1,183/85) has always governed the Sociedad Anónima (SA). In 2020, Law No. 6,480/2020 created the Empresa por Acciones Simplificadas (EAS) — a new corporate form, not a variant of the SA.
| Dimension | Sociedad Anónima (SA) | EAS |
|---|---|---|
| Legal basis | Civil Code (Law No. 1,183/85) | Law No. 6,480/2020, implemented by Decree No. 3,998/2020 |
| Incorporation | Public deed, with registration at the Public Registries | Public or private instrument with notarised signature — no Public Registry filing needed for incorporation |
| Typical incorporation time | 30 to 45 days | Up to 24 hours, once documentation is complete in the system |
| Minimum number of shareholders | Two | One (single-shareholder EAS) or more |
| Incorporation channel | Deed + traditional registries | Exclusively through the Unified Company Opening and Closing System (SUACE), attached to the Ministry of Industry and Commerce |
| Publicity | Under general company rules | Incorporation published on the SUACE website itself |
The single-shareholder EAS — an EAS with one shareholder, individual or corporate — is the structure closest to what the market tends to call a “sole trader company” in Paraguay. One caveat from the implementing decree itself: a single-shareholder EAS may not be a shareholder in another single-shareholder EAS.
Both structures — SA and EAS — must report their ultimate beneficial owners to the Administrative Registry of Legal Persons and Structures, under Law No. 5,895/2017. That point is routinely omitted from material aimed at attracting investors: neither structure is anonymous vis-à-vis the Paraguayan state.
The territorial tax regime: Law No. 6,380/2019
Paraguay taxes on the basis of source, not residence: Article 6 of Law No. 6,380/2019 provides that all income connected to services, rights or assets located or economically used within Paraguayan territory is treated as Paraguayan-source income — and therefore taxable there. Income generated and used outside Paraguay falls, as a rule, outside the scope of that domestic taxation.
This is the feature underpinning much of the country’s appeal for international operations — but it does not replace the analysis of what tax base the entrepreneur retains in their home country.
The four taxes that make up the picture
| Tax | What it taxes | Rate |
|---|---|---|
| IRE (corporate income tax) | Paraguayan-source income from economic activity — commercial, industrial, services and agricultural | 10% on net Paraguayan-source income |
| VAT | Sale of goods and provision of services in the country | 10% (general rate) |
| IDU (dividends and profits tax) | Distribution of profits, dividends or returns to shareholders | 8% for residents in the country; 15% for non-residents — including a foreign parent company |
| INR (non-resident income tax) | Income obtained by non-residents operating in Paraguay without a permanent establishment | Rate varies with the nature of the income |
Here is what the “10% VAT” messaging conveniently omits: someone who incorporates a company in Paraguay and distributes profits to themselves while living outside Paraguay pays IDU at 15%, not 8% — because the reduced rate applies to Paraguayan tax residents, not to a company owner living abroad. The Paraguayan tax advantage presupposes, in most cases, that the individual has also moved their tax residence there — which is a different thing from merely incorporating a company.
Who supervises today: the DNIT
Until 2023, domestic tax enforcement sat with the State Under-Secretariat for Taxation (SET) and customs enforcement with the National Customs Directorate (DNA) — two separate bodies. Law No. 7,143/2023 merged both remits into the National Directorate of Tax Revenue (DNIT), an autonomous entity attached to the Ministry of Economy and Finance, responsible for applying both domestic and customs taxes.
In practice, that means the same institution supervising a Paraguayan company’s corporate income tax, VAT and dividends tax also controls the movement of goods across the border — reducing the fragmentation that characterised the system before 2023, and increasing the capacity to cross-reference data between the two fronts.
Note on scope: the rates and structure of the four taxes described here are those in force under Law No. 6,380/2019 and its implementing rules as at this article’s publication date. The law has been the subject of periodic general resolutions from the DNIT — including recent ones on crypto-assets and on explanatory notes in financial statements — which detail its application without altering the central rates cited here. Before incorporating any structure, we confirm the current text and the most recent implementing resolution directly with the DNIT.
Frequently asked questions
Does the EAS work for any kind of business?
It can be commercial, industrial or services, provided the declared activity is not subject to its own special regulation (mining and hydrocarbons, for instance, follow specific regimes).
Does opening a company in Paraguay make me a tax resident there?
No. Incorporating a company and the individual’s tax residence are distinct legal questions. It is perfectly possible to hold a Paraguayan company without being a Paraguayan tax resident — in which case profit distributions to you carry the non-resident IDU rate.
Does the EAS replace the Sociedad Anónima in all cases?
Not necessarily. For operations requiring specific features of the traditional corporate regime, or in regulated sectors, the SA remains the appropriate structure. The EAS mainly solves the problem of speed and simplicity at incorporation.
Is there a wealth or inheritance tax in Paraguay?
The Paraguayan territorial tax system, as structured by Law No. 6,380/2019, includes no general wealth tax and no inheritance tax of the kind found in other countries in the region. That does not remove the need to analyse succession taxation in the asset holder’s home country.
How to verify for yourself
- Law No. 6,380/2019, on Modernisation and Simplification of the National Tax System — official text at the DNIT.
- Law No. 6,480/2020, creating the EAS — official text at the BACN.
- Law No. 7,143/2023, creating the DNIT — official text at the BACN.
- EAS frequently asked questions — SUACE.
- Articles 43 and 44 (IDU) — official text at the DNIT.
The starting point
Choosing between the SA and the EAS is a decision about speed and corporate format. Understanding the four taxes bearing on the company’s result — and which IDU rate actually applies to you, depending on where you live — is the decision that determines whether the structure genuinely delivers the advantage that drew you to the country.
Both decisions have to be taken together, with your actual profile of residence, wealth and income source on the table — not in isolation. If the corporate structure comes alongside a change in your tax residence, it is worth also reading Tax secrecy or compliance in Paraguay?, on what has already changed in the country’s tax transparency.
One conversation is enough to know where to begin.
Informational content. It does not constitute legal, tax, corporate or investment advice. The rules cited were verified against the official sources indicated in July 2026 and may be amended or further regulated. Individual situations produce different outcomes and should be analysed case by case.