The Paraguayan EAS Company Explained

Read the tax warning first

We are putting this above the how-to because the order matters.

An individual taxed under Paraguay's personal income tax sits inside Article 48 of Ley N° 6380/2019, which is territorial with three narrow exceptions. A Paraguayan company is taxed under the business income tax, whose source rule in Article 6 is materially wider: it expressly treats as Paraguayan-source the interest and returns on capital deposited in banks abroad, exchange differences, and dividends from foreign entities, where the investing or beneficiary entity is constituted or resident in Paraguay. Its final paragraph reaches activity carried out abroad unless foreign tax was paid at a rate at or above the IRE rate.

So the entity that looks like tidiness can pull income into the Paraguayan base that would otherwise have stayed outside it. On top of the IRE at 10% on net income, distributions attract the IDU at 8% for a resident recipient and 15% for a non-resident one.

The full analysis is in IRP vs IRE, and it is the single most consequential page on this site for anyone considering a company. For a remote worker whose clients are all abroad, the honest default answer is: you probably do not need one.

When an EAS does make sense

• You are actually operating a business in Paraguay, with local customers, local staff or local premises.
• You need a Paraguayan counterparty to contract, invoice or hold a licence.
• You need limited liability for a genuine local operating risk.
• You are hiring, and you need a legal employer for payroll and IPS contributions.
• Your income is already Paraguayan-source, so the wider IRE rule costs you nothing you were not already inside.

Notice that every one of those is an operational reason. None of them is "to reduce tax on foreign income", because a Paraguayan company does the opposite of that.

What Ley N° 6480/2020 changed

Before the EAS, forming a company in Paraguay meant an SA or an SRL, both of which require more than one participant, notarial formalities and a slower registration. The EAS introduced something the Civil Code did not previously allow: a company with a single shareholder, individual or corporate.

The foreigner's requirements, specifically

The official EAS FAQ is explicit on this and it is the point most third-party guides get vague about.

Foreigners can form an EAS. However, a foreigner must hold a Paraguayan cédula or permanent residency, and where they do not, they must appoint a legal representative who does. The legal representative also has to obtain an electronic identity through the official portal before registration can proceed.

Two consequences follow.

First, the cédula is on the critical path. The published delivery time for a first cédula for a foreigner is 90 business days, so a plan that assumes a company within a fortnight of arrival is not accounting for the identification step.

Second, appointing a local legal representative because you do not have status yourself is a real legal relationship with real authority attached. It is not an administrative shortcut, and it should be documented properly.

What comes with a company

An EAS is fast to create and is not free to keep.

• A RUC and monthly and annual filings. IVA obligations, IRE returns, and the record-keeping behind them.
• Accounting. A recurring professional fee, not an optional one.
• Employer obligations if you hire: labour law, IPS contributions and the minimum wage, currently ₲3,044,000 a month for unspecified activities under Resolución MTESS N° 670/2026.
• A bank account for the entity, which is a separate exercise from your personal one. See opening a bank account.
• Foreign reporting. If you are American, a foreign corporation brings its own US information returns and controlled foreign corporation analysis. See US citizens. If you are European, your home country's CFC rules may attribute the company's income back to you: what Paraguayan residency does not solve.

SA and SRL are still there

The EAS did not replace the older forms. An SA remains the vehicle for larger structures with multiple shareholders and more formal governance, and an SRL remains common. Which is right depends on shareholders, governance, financing and what counterparties expect, and it is a question for a Paraguayan lawyer once you have decided you need an entity at all.

The one-line version

The EAS is a good company law reform and a bad default. Form one when you have a Paraguayan business to run. Do not form one because a residency package included it, which is a pattern we describe on residency scams and red flags.