Paraguay is a top performer for growth in Latin America. Between the years of 2004-2017, Paraguayan GDP grew at a yearly average of 4.5%.
Government authorities have understood the importance of foreign investment, and thus have implemented a serious of measures to entice companies from around the world into its borders.
This includes incentives such as non-restraining taxes and movement of capital.
Noting the above, the company formation process also involve the following steps:
1. Drafting and signing a Power of Attorney (POA) allowing a locally residing person to act on your behalf
If as the business owner, you can’t be present for the sign of the bylaws, you can grant a special mandate from your home country or place of residency to an individual to sign the bylaws on your behalf. To do this, you’ll need to have the special mandate recognized by the public records office through a public notary before proceeding.
2. Choosing and verifying your company’s name
Choosing your company name is free. You’ll need to check with the Advocacy Institution that the name is not already taken. The institution also manages the process for changing the company name, if that’s something you need later on.
3. Drafting the company by-laws and public registration
As mentioned above, this process is made by the public notary and is a crucial step leading into communications with the Treasury Advocacy Institution, and registration with the Public Records Office.
After registering in the Public records office, you need to publish your company’s formation in a local newspaper for 3 days and communicate the registration back to the Treasury Advocacy Institution.
4. Obtaining the company’s identification number (RUC)
With a copy of the bylaws and the excerpt of your company published in the news, you can apply for the company’s identification number, known as a RUC, with the State Secretariat of Taxation (SET).
5. Opening and activating a corporate bank account
For this step, you’ll need to present a copy of the company’s bylaws to the bank, along the personal documents of all investors to identify beneficiaries. Due to strict banking regulations, this process should take around 5 days.
6. Subscribing the initial company capital
There’s no minimum upfront capital required for certain legal entities, but your investment should reflect the type and scale of activity you intend to undertake.
Other required documentation
To be a shareholder in Paraguay and sign the bylaws, you need your passport or another form of official identification. To be a director or CEO of your company, you’ll need a permanent residency ID known as a ‘carnet.’
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