Countries › Paraguay › Guide › 10. Capital markets and finance › Insurance and reinsurance in Paraguay: licensing, US$500,000 capital per group, foreign branches, the ban on offshore cover and tax on premiums paid abroad

Insurance and reinsurance in Paraguay: licensing, US$500,000 capital per group, foreign branches, the ban on offshore cover and tax on premiums paid abroad

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Last verified: 2026-10-28 · Status: Changing

Only sociedades anónimas and branches of foreign insurers authorized by the Superintendencia de Seguros of the Banco Central del Paraguay may sell insurance in Paraguay, and insuring or reinsuring Paraguayan risks for premiums is reserved to authorized companies unless a treaty says otherwise. Insurers need capital equal in guaraníes to US$500,000 for each group of business (non life and life), national reinsurers US$2.5 million per group, and every reinsurance contract must be registered with the Superintendencia. Disputes on direct insurance and reinsurance must go to Paraguayan courts, and premiums paid to foreign insurers or reinsurers are Paraguayan source income for the non resident income tax.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026. Fines tied to the minimum wage use PYG 3,044,000 per month and PYG 117,077 per daily jornal, in force from 1 July 2026 under Resolución MTESS Nº 670/2026. Conversions are for orientation only.

Key facts

Licence required to sell insurance in Paraguay	Yes, Superintendencia de Seguros (BCP) Ley 827/96 art. 3, 4 and 125, as of 2026-10-28 · in force
Insurer minimum capital per group, in guaraníes equivalent	500000 USDLey 827/96 art. 17, as of 2026-10-28 · in force
National reinsurer minimum equity per group	2500000 USDLey 827/96 art. 92, as of 2026-10-28 · in force
Foreign insurers may operate through branches	Yes, same conditions as local companies Ley 827/96 art. 3 and 6, as of 2026-10-28 · in force
Paraguayan risks may be insured directly with unauthorized foreign insurers	No, save treaties Ley 827/96 art. 125, as of 2026-10-28 · in force
Superintendencia term to decide a licence once conditions are met (silence means approval)	90 daysLey 827/96 art. 8, as of 2026-10-28 · in force
Insurance and reinsurance disputes reserved to Paraguayan courts	Yes, contrary agreements void save treaties Ley 827/96 art. 94, as of 2026-10-28 · in force
Effective INR on premiums for cover of risks in Paraguay and abroad jointly	4.5 %Ley 6380/2019 art. 75 num. 1 e) and 76, as of 2026-10-28 · in force

The rule

1. Who may insure. Insurance and reinsurance activity anywhere in Paraguay is subject to Ley 827/96 and the control of the Superintendencia de Seguros. Only sociedades anónimas and branches of foreign companies may operate, and neither may operate until authorized; foreign branches are authorized on the same conditions as local companies and must also file the head office's last five balance sheets showing solvency margins at least equal to those required locally. Conditions are legal incorporation, exclusive insurance object, full payment of minimum capital, no legal disqualifications of organizers and filing of plans; once met, the Superintendencia must decide within 90 days, after which silence means automatic authorization. Insurers may operate only in authorized lines and must reinsure the excess over their retention with national or foreign companies. Policies may be issued in foreign currency.
Cost to do it: Minimum capital below; no application fee in the law.
Example: A Chilean insurer can open a branch in Asunción by filing five years of head office balance sheets and funding the local capital; if the Superintendencia does not object within 90 days of a complete file, it is authorized. / Policies covering a US$20 million plant can be written in US dollars.Ley Nº 827/96 De Seguros, Art. 1, 3, 4, 6, 8, 9 and 131, 1996-02-12 official text · verified 2026-10-28

2. Capital, reserves and solvency. Insurers are grouped into non life (property, guarantees and personal cover without mathematical reserves) and life (capital, paid up policy or annuity); each group needs minimum capital equal in guaraníes to US$500,000, paid only in cash and adjusted to the US dollar exchange rate; a shortfall must be cured within 180 days or the authorization is revoked. National reinsurers must hold equity of at least US$2.5 million per group. Insurers keep technical provisions and mathematical reserves under Superintendencia rules, invest preferably in Paraguay and keep a solvency margin set by the Superintendencia; if losses reach 30 percent of the required equity, the Superintendencia suspends new policies until it is restored, within at most 180 days, failing which the authorization is withdrawn.
Cost to do it: Insurer: PYG 2,934,155,000 (US$500,000) per group; national reinsurer: PYG 14,670,775,000 (US$2.50 million) per group (US$ amounts converted at the 28 October 2026 rate).
Example: A composite insurer writing life and non life must hold the guaraní equivalent of US$1 million, about PYG 5,868,310,000. / A new non life insurer needs US$500,000 in cash; a local reinsurer writing both groups needs US$5 million.Ley Nº 827/96 De Seguros, Art. 16 to 19, 22, 25, 35 and 92, 1996-02-12 official text · verified 2026-10-28

3. Offshore insurance, reinsurance registration and jurisdiction. The business of insuring and reinsuring risks for premiums may be carried on in Paraguay only by companies authorized under the law, save what international agreements and treaties provide; anyone acting as representative of or intermediary for a foreign entity in breach is sanctioned. All reinsurance contracts of insurers must be registered with the Superintendencia, which checks the reinsurers' suitability and solvency and keeps a register of reinsurers, including foreign ones operating in the country. Reinsurance does not change the direct contract and cannot delay payment of a claim. Disputes on direct insurance and reinsurance contracts under the law go to Paraguayan courts, and any agreement to the contrary is void, save treaties.
Cost to do it: Sanctions under art. 123 and 124 for unauthorized intermediaries.
Example: A Paraguayan factory cannot buy a fire policy directly from a foreign insurer through a local broker; it must use an authorized insurer, which can reinsure abroad. / A US$50 million program for a Paraguayan hydro project is fronted by a local insurer and ceded to registered foreign reinsurers.Ley Nº 827/96 De Seguros, Art. 93, 94, 95 and 125, 1996-02-12 official text · verified 2026-10-28

4. Sanctions and appeals. Insurers that breach the law or regulations face a written warning, a fine of up to 1,000 daily minimum wages for unspecified activities in the capital, suspension of up to one year or revocation; directors who start operations without authorization are fined individually. Fines are paid into a BCP account within 15 days. Superintendencia decisions may be appealed to the BCP Board within 5 business days, which decides within 30 days; a contentious administrative action may then be filed within 10 business days.
Cost to do it: Maximum fine on an insurer: PYG 117,077,000 (US$19,951) at the PYG 117,077 jornal from 1 July 2026.
Example: An insurer using unregistered policy wordings can be fined, suspended or have its licence revoked (art. 112). / The fine ceiling of about US$19,951 is low, but suspension and revocation are the real deterrents.Ley Nº 827/96 De Seguros, Art. 109, 110, 111, 125, 127 and 128, 1996-02-12 official text · verified 2026-10-28

5. Tax on premiums paid abroad. Insurance or reinsurance covering risks in Paraguay, or relating to persons or entities resident in Paraguay when the contract is made, is Paraguayan source income. For the non resident income tax (INR, 15 percent), premiums and other income from insurance, coinsurance or reinsurance covering risks in Paraguay and abroad jointly are taxed on a deemed net income of 30 percent of the gross amount, an effective 4.5 percent; the law gives no specific deemed percentage for cover of Paraguayan risks only, which on its face falls under the residual 100 percent basis of num. 7; confirm with DNIT. Insurance and reinsurance services are also services for IVA, deemed rendered in Paraguay when they cover risks there. The payer withholds when it pays, credits or remits.
Cost to do it: INR 4.5 percent effective on qualifying premiums covering risks in Paraguay and abroad jointly; 15 percent on the residual basis.
Example: A Paraguayan insurer ceding PYG 500,000,000 of premium to a foreign reinsurer under a regional treaty covering several countries withholds INR on 30 percent of it at 15 percent, PYG 22,500,000. / On US$100,000 of ceded premium for joint cover, INR is about US$4,500; for Paraguay only cover, check with DNIT whether the 15 percent full basis applies.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 75 num. 1 e) and 7, 76 and 77 (INR); source and IVA services articles, 2019-09-25 official text · verified 2026-10-28

Item	Rule	Amount	Norm
Insurer capital	Per group, cash, dollar adjusted	PYG 2,934,155,000 (US$500,000)	Ley 827/96 art. 17 and 18
Reinsurer equity	Per group	PYG 14,670,775,000 (US$2.50 million)	Ley 827/96 art. 92
Licence decision	90 days, silence is approval		Ley 827/96 art. 8
Capital shortfall	Cure in 180 days or revocation		Ley 827/96 art. 18 and 35
Maximum fine	1,000 daily minimum wages	PYG 117,077,000 (US$19,951)	Ley 827/96 art. 109
Appeal	BCP Board within 5 business days		Ley 827/96 art. 127

Insurance requirements (US$ converted at PYG 5,868.31, 28 Oct 2026)

Worked example

A multinational wants global program cover for its Paraguayan subsidiary: the local risk must be written by an authorized Paraguayan insurer (Ley 827/96 art. 125), which cedes to the group's reinsurers; the reinsurance contract is registered with the Superintendencia (art. 95), disputes stay in Paraguayan courts (art. 94) and the insurer withholds INR on the ceded premium (Ley 6380/2019 art. 75 to 77).

Step by step

1. Decide between a local S.A. and a branch; for a branch, gather five years of head office accounts.
2. Fund US$500,000 per group in cash and file plans and policy wordings.
3. Count 90 days from a complete file for the Superintendencia's decision.
4. Register every reinsurance contract and check reinsurers are on the Superintendencia's register.
5. Set up INR withholding on premiums ceded abroad and IVA on premiums.

Common traps

The capital amounts in Ley 827/96 date from 1996 and are not indexed except to the dollar rate; the Superintendencia can set higher solvency margins by regulation (art. 25).
Arbitration abroad or foreign courts in a reinsurance treaty covering Paraguayan risks is void unless a treaty allows it (art. 94).
Fronting is mandatory: local intermediaries placing Paraguayan risks directly offshore are sanctioned (art. 125).
Capital is dollar linked, so guaraní depreciation raises the required guaraní amount (art. 18).

Sources

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