If you are a globe-trotting digital nomad who can work from anywhere with an internet connection, it might seem tempting to live as a perpetual tourist, never changing your official residency away from your home country.
But you might be missing out by doing that - particularly if you are from a country which has a more expensive tax regime, or from a country which doesn't have a particularly powerful passport. Here are some reasons why getting residency in Paraguay during your nomadic years is great for digital nomads - both in the short term, and the long term.
You often need an "official base", on paper at least
Whilst you personally might not need to be a resident of anywhere, if you travel far or often enough, you're going to come across many people who do need you to confirm where you are a resident of (banks, embassies, etc). By default, unless you proactively change it, this will be your home country.
Whilst there is nothing wrong with this per se, do you genuinely believe that being an official resident of whatever country you are from is best for all digital nomads? Or have you just never thought about it?
There are many advantages to choosing an optimal place to be an official resident - and choosing Paraguay might just give you some extra advantages that you hadn't realised before.
Very low taxes
Paraguay is not a tax-free country, but it's close. Some of the headline rates for residents of Paraguay are:
10% income tax on anything you earn inside Paraguay
0% income tax on anything you earn outside Paraguay
Assuming your total income as a digital nomad doesn't currently originate in Paraguay, it means that if you become a resident (and tax resident) of Paraguay, you don't need to pay any income taxes, 100% legally.
Whilst you may well be able to legally pay 0% income taxes whilst still being an official resident of your home country - for example if you are outside you home country for more than 180 days per year, in most cases - unless you actually change your domicile, your low taxes are only temporary, and if you ever stop nomad-ing and go back home, you're immediately on the hook for the much higher tax rate (on global income, in many cases) that your home country charges.
By obtaining residency in Paraguay whilst living internationally, you will be able to keep it active forever, just by visiting Paraguay once ever three years (once your temporary residency has been converted to permanent residency after two years).
It will not fully protect you from high taxes if you go back to live in your home country permanently, but it will give you more options, potentially delay the date you go back to being an official tax resident of your home country, and crucially give you some official documentation to show that you have proactively changed your domicile, if it's ever needed.
Travel benefits
As an official resident of Paraguay, you can use your Cedula (National ID Card) to travel to any Mercosur country (almost every country in South America), as long as your nationality (which is stated on your Cedula) does not require a visa to enter that country.
A great Plan B, if not Plan A
Remember the pandemic, where you couldn't travel anywhere as a tourist, and could only enter countries if you had the legal right to live there? Remember how some people got stuck in a country they didn't want to be in (often their home country), which in some cases had a much higher cost of living, and/or charged high taxes, and/or forced people to get vaccinated whether they wanted it or not?
With a residency in Paraguay, you could have travelled here, and lived cheaply in a country which encouraged everyone to get a vaccine and made it readily available, but didn't force it on anyone.
In any similar travel-restricting situations in future - such as another pandemic, or another world war, or a nuclear war/accident, or something else - would you like to have an extra option for where you could go? Would you like that to be somewhere which has loads of fresh water, loads of locally-produced food, cheap electricity, cheap land, and is welcoming to foreigners?
Paraguay is a great Plan B - many expats have made it their Plan A (here are some reasons why Paraguay is a great place to live for expats) - why not spend a few weeks here and get your official residency documents whilst you're living as a global nomad? Might you regret it one day in future if you don't?
It's not difficult or expensive to get - have a look at the checklist for what you need to do to get residency in Paraguay, read the FAQs and Detailed Info sections to answer most (all?) of your questions, and then contact us when you want to get started!