Choose Paraguay if you want the lowest total cost for most profiles, a 3-year naturalization horizon and you can file in person in Asunción. Choose Panama if you want a US dollar economy, fully territorial tax and, as a pensioner or investor, direct permanent residency, and you accept a higher price.
The two countries solve different problems. Paraguay is the budget-friendly route with a longer path to permanent status. Panama is faster for specific profiles but more expensive. We handle Paraguay files directly in Asunción and Panama files with our partner team, so the figures below come from the files we handle and the official fee schedules.
Residency routes side by side: cost, minimum requirement and timeline
| Route | Minimum requirement / investment | Total cost | Time to permanent status | Direct permanent? | Presence required |
|---|---|---|---|---|---|
| Paraguay temporary | Documents (ID, birth certificate, apostilled records) | 2,500 USD all inclusive with us | Temporary up to 2 years, then permanent | No | In-person filing in Asunción |
| Paraguay SUACE investment | Usual reference USD 70,000, business plan approved by the MIC | Quote on request | Depends on the file | Case by case | In-person filing |
| Panama Friendly Nations | Job offer stamped by the Ministry of Labor | 3,380 USD (+2,200 per dependent) | Provisional up to about 6 months, then permanent | No | At least one trip to file and collect the card |
| Panama Pensionado | Lifetime pension of at least 1,000 USD/month | 2,000 USD | About 3 months | Yes | At least one trip |
| Panama Qualified Investor | 500,000 USD real estate (since October 15, 2026), or 500,000 USD securities, or 750,000 USD time deposit held at least 5 years | 14,050 USD (+4,050 per dependent) | About 3 months | Yes | At least one trip |
| Panama remote worker visa | 36,000 USD/year foreign-source income | Visa, not a residency | Does not lead to permanent status (9 months, renewable once) | No | No work for Panamanian employers |
Paraguay: temporary residency and the SUACE route
Under Ley 6984/2022, temporary residency lasts up to 2 years and can be extended for the same period. It is the required step before permanent residency. The DNM fee is G. 2,787,550 under the general regime and G. 2,230,040 under the Mercosur Residence Agreement (2 years, not extendable). Our price is 2,500 USD all inclusive, covering the support and the government fees.
The investment route through SUACE/MIC has a usual reference of USD 70,000 with a business plan approved by the MIC. Treat that as a usual reference, not a fixed rule. Most of our clients do not need it, because the general route has no investment requirement.
Panama: Friendly Nations, Pensionado, Qualified Investor
Friendly Nations covers about 50 nationalities, including the US, Canada, the UK, France, Spain, Argentina and Brazil. You do not create a company or invest. The economic tie is a job offer stamped by the Ministry of Labor, which the lawyer prepares. You receive provisional residency first, in up to about 6 months, then permanent. The total is 3,380 USD per main applicant: 1,600 in fees, 1,400 in government and notary costs, 350 for job offer documents and 30 for translations. Each dependent adds 2,200 USD.
Pensionado is the cheapest Panama route if you qualify: 2,000 USD total and direct permanent residency in about 3 months, with a lifetime pension of at least 1,000 USD per month. Qualified Investor also gives direct permanent residency in about 3 months, but costs 14,050 USD (10,550 of it government fees) on top of the investment. The real estate minimum was 300,000 USD until October 15, 2026 and is 500,000 USD since then.
One common mistake: Panama's remote worker visa is not a residency. It needs foreign-source income of at least 36,000 USD a year, lasts 9 months, can be renewed once and does not allow work for Panamanian employers. For a Panama file handled end to end, see La Conciergerie Panamá, our partner team in Panama (site in French).
Taxes: two territorial systems, with one nuance
Panama taxes on a territorial basis. Only Panama-source income is taxed, and foreign-source income pays no income tax there. That is the rule of the country, not an interpretation. The ITBMS (VAT) is 7%.
Paraguay also applies territoriality to income tax under Ley 6380/2019, in force since 2020. As a general rule, foreign-source income is outside the scope, but some foreign-source capital income can have specific treatment under the IRP, which is progressive up to 10%. Other reference rates: IRE (business income) 10%, VAT 10%, and IDU on dividends 8% for residents and 15% for non-residents.
| Item | Panama | Paraguay |
|---|---|---|
| Tax on foreign income | Territorial: none on foreign-source income | Territorial as a general rule; IRP nuance for some capital income |
| Main rates | ITBMS 7% | IRE 10%, VAT 10%, IDU 8% / 15%, IRP up to 10% |
| Currency | US dollar (balboa at par) | Guaraní (PYG) |
| Citizenship horizon | 5 years after permanent residency | At least 3 years of residence |
What residency does not change for US, Canadian and UK citizens
The United States taxes citizens on worldwide income wherever they live. Moving to Panama or Paraguay does not end US filing, and FEIE, FBAR and FATCA reporting can still apply in general terms. Canadians should look at residential ties and departure rules before leaving, and Britons at the statutory residence test. Residency in a new country is a document, not a tax exit. Our guide for US citizens and tax obligations in Paraguay covers the American side in more detail.
Presence rules, documents and what slows files down
Paraguay requires in-person filing in Asunción. You need a valid ID, a birth certificate, an entry record, criminal records apostilled with an official translation, and Interpol and National Police certificates, which are obtained in Asunción. While the application is in progress you hold "precarious resident" status, which lets you leave and re-enter, study and work legally. A temporary resident can lose the status after more than 1 year of unjustified absence, and permanent residency is requested within the 90 days before the temporary one expires. The step-by-step sequence is in our Paraguay residency and cédula timeline.
Panama needs at least one trip to file and collect the card. Files slow down mostly on documents: criminal records that are not apostilled, a passport with less than 6 months of validity, or missing dependent certificates. In both countries, a clean document set matters more than the route you pick.
Currency, cost of living and banking
Panama runs on the US dollar, which removes exchange-rate risk for dollar earners. Paraguay uses the guaraní, and Moody's upgraded the country to Baa3 (investment grade) in July 2024. Many nomads keep their income in dollars or euros and only convert what they spend locally.
On banking, in the Panama files we accompany, the first bank account is opened remotely, before arrival, with banks our partner team works with. Each bank decides. We do not promise acceptance in either country.
Permanent residency and citizenship horizon
Paraguay's Constitution requires at least 3 years of residence for naturalization, which on paper makes it the shorter horizon to a second passport. In Panama, naturalization is possible 5 years after you obtain permanent residency. Because Friendly Nations starts with provisional status, its total horizon is longer than the Pensionado or Qualified Investor routes. Meanwhile, direct permanent residency in Panama gives you stable status much earlier than Paraguay's two-step path.
Which profile fits which country
- Nomad on a budget: Paraguay at 2,500 USD, or Panama Friendly Nations at 3,380 USD if you prefer to live on the dollar.
- US LLC founder: either works. Paraguay costs less, Panama keeps you on the dollar. Remember US reporting continues.
- Retiree with a pension: Panama Pensionado, at 2,000 USD, is hard to beat if you have 1,000 USD a month for life.
- Investor with 500,000 USD or more: Panama Qualified Investor gives direct permanent residency. Paraguay's reference is much lower, at USD 70,000.
- Family with dependents: in Panama, each dependent adds 2,200 USD (Friendly Nations) or 4,050 USD (Qualified Investor). For Paraguay, ask us for a family quote.
If you are still comparing options, our three-country comparison with Uruguay adds the third option, and the "What do I need?" quiz narrows it down. For a Paraguay file, you can start from our residency service request.
The common combination: residency in one country, an address in Paraguay
Many clients hold residency in Panama, or in their home country, and still need a documented address for bank and fintech KYC. Our plan covers that: a 12-month lease agreement on a real apartment in the Eje Corporativo of Asunción plus a signed certificate of address, with an updated addendum sent before the 6-month mark, since many institutions want documents under 6 months old. Each bank or fintech decides whether to accept it. You can see how this works in practice in our guide to proof of address for banks and fintechs, and the plan details are in pricing.
This content is informative and does not constitute legal or tax advice; consult a licensed professional in Paraguay, Panama and your home country.