Countries › Paraguay › Guide › 5. FX and capital controls › Capital contributions and return of capital in Paraguay: no FX registration, but reserves come out first
Capital contributions and return of capital in Paraguay: no FX registration, but reserves come out first
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Last verified: 2026-10-28 · Status: Stable
Foreign capital enters Paraguay with no prior authorization or FX registration, and capital contributions are not taxable income of the company. Capital can leave freely, but a capital reduction is deemed to return reserves and retained profits first, which bear the 15 percent dividend tax for non residents, and only then contributed capital. The BCP may require statistical information from any company on cross border investment, with fines for not answering.
USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026 (daily planilla). Conversions are for orientation only.
Key facts
| Repatriation of capital | Free, no restrictions on entry and exit of capital Ley 117/91 art. 6, as of 2026-10-28 · in force |
|---|---|
| Foreign investment authorization or registration | Not required beyond registrations set by law Ley 117/91 art. 4, as of 2026-10-28 · in force |
| Order of deemed return on a capital reduction | Reserves, then undistributed profits, then contributed capital Ley 6380/2019 art. 40, as of 2026-10-28 · in force |
| Maximum first offence fine for not supplying BCP statistical data | 5 monthly minimum wagesLey 489/95 art. 82 (Ley 6104/2018), as of 2026-10-28 · in force |
| Monthly minimum wage, actividades diversas no especificadas, from 1 July 2026 | 3044000 PYGResolución MTESS 670/2026, as of 2026-07-01 · in force |
The rule
1. No authorization or registration. Private investment requires no prior authorization and no registration beyond those set by law, and free exchange is guaranteed for the entry and exit of capital.
Cost to do it: PYG 0 in FX or registration fees; banks charge their own transfer commissions.
Example: A parent wires PYG 2,934,155,000 of capital to its Paraguayan S.A. with no BCP filing. / US$500,000 capital injection, no FX registration.Ley Nº 117/91 De Inversiones, Art. 4 and 6, 1992-01-07 official text · verified 2026-10-28
Cost to do it: PYG 0 in FX or registration fees; banks charge their own transfer commissions.
Example: A parent wires PYG 2,934,155,000 of capital to its Paraguayan S.A. with no BCP filing. / US$500,000 capital injection, no FX registration.Ley Nº 117/91 De Inversiones, Art. 4 and 6, 1992-01-07 official text · verified 2026-10-28
2. Contributions are not income. For the corporate income tax (IRE), an increase in net worth during the year is gross income except when it comes from capital contributions in cash or in kind by owners, partners or shareholders (or from exempt activities or the mandatory fixed asset revaluation).
Cost to do it: No IRE on the contribution itself.
Example: A PYG 2,934,155,000 capital increase does not raise the company's taxable income. / US$500,000 contributed, US$0 IRE.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 8 numeral 13, 2019-09-25 official text · verified 2026-10-28
Cost to do it: No IRE on the contribution itself.
Example: A PYG 2,934,155,000 capital increase does not raise the company's taxable income. / US$500,000 contributed, US$0 IRE.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 8 numeral 13, 2019-09-25 official text · verified 2026-10-28
3. Order of return on a capital reduction. A distribution of capital through a capital reduction is treated as a dividend to the extent the capital was formed by capitalizing undistributed profits or reserves, and it is presumed, without proof to the contrary, that capital is withdrawn first from capital formed by reserves (including revaluation), then undistributed profits, and only then capital actually contributed. The IDU on a capital redemption arises when the meeting or competent body resolves it.
Cost to do it: 15 percent IDU on the part deemed to be reserves or profits for a non resident shareholder.
Example: A company with PYG 1,173,662,000 of reserves and retained profits reduces capital by PYG 1,760,493,000: PYG 1,173,662,000 is treated as a dividend (IDU PYG 176,049,300) and PYG 586,831,000 as return of contributed capital. / US$300,000 reduction: US$200,000 taxed as dividend (US$30,000 IDU), US$100,000 returned tax free.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 40, 42 and 44, 2019-09-25 official text · verified 2026-10-28
Cost to do it: 15 percent IDU on the part deemed to be reserves or profits for a non resident shareholder.
Example: A company with PYG 1,173,662,000 of reserves and retained profits reduces capital by PYG 1,760,493,000: PYG 1,173,662,000 is treated as a dividend (IDU PYG 176,049,300) and PYG 586,831,000 as return of contributed capital. / US$300,000 reduction: US$200,000 taxed as dividend (US$30,000 IDU), US$100,000 returned tax free.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 40, 42 and 44, 2019-09-25 official text · verified 2026-10-28
4. BCP statistical information. The BCP compiles balance of payments and international investment position statistics, and public and private persons must supply the data it requests, truthfully and on time; the BCP keeps the data confidential. Persons not supervised by the BCP who fail to comply can be fined 1 to 5 monthly minimum wages, and 6 to 50 on repeat, after an administrative proceeding.
Cost to do it: Fine for not answering a BCP request: PYG 3,044,000 to PYG 15,220,000 (US$519 to US$2,594); repeat PYG 18,264,000 to PYG 152,200,000 (US$3,112 to US$25,936), using the PYG 3,044,000 minimum wage in force from 1 July 2026.
Example: A foreign owned company receiving a BCP survey on its external liabilities must answer by the deadline set in the request. / Maximum first offence fine about US$2,594.Ley Nº 489/95 Orgánica del Banco Central del Paraguay, as amended by Ley Nº 6104/2018, Art. 82 (as reworded by Ley 6104/2018 art. 1), 2018-07-03 official text · verified 2026-10-28
Cost to do it: Fine for not answering a BCP request: PYG 3,044,000 to PYG 15,220,000 (US$519 to US$2,594); repeat PYG 18,264,000 to PYG 152,200,000 (US$3,112 to US$25,936), using the PYG 3,044,000 minimum wage in force from 1 July 2026.
Example: A foreign owned company receiving a BCP survey on its external liabilities must answer by the deadline set in the request. / Maximum first offence fine about US$2,594.Ley Nº 489/95 Orgánica del Banco Central del Paraguay, as amended by Ley Nº 6104/2018, Art. 82 (as reworded by Ley 6104/2018 art. 1), 2018-07-03 official text · verified 2026-10-28
| Layer returned | USD | PYG | IDU for non resident |
|---|---|---|---|
| Reserves and retained profits | 200,000 | 1,173,662,000 | 15%: 176,049,300 |
| Contributed capital | 100,000 | 586,831,000 | None |
Capital reduction of US$300,000 by a company with US$200,000 of reserves and retained profits
Worked example
- Planning a tax free return: a parent that contributed PYG 2,934,155,000 (US$500,000) and whose subsidiary holds PYG 880,246,500 (US$150,000) of retained profit first declares a dividend of the profit (IDU 15 percent, PYG 132,036,975, US$22,500), then reduces capital by up to US$500,000, which is then return of contributed capital without IDU.
Step by step
- 1. Wire capital to the company's bank account and document the source of funds for the bank.
- 2. Record the contribution in the company books and the share register, with the meeting minutes or bylaw amendment.
- 3. Complete the corporate formalities for the capital increase at the registry.
- 4. To return capital, first distribute or account for reserves and retained profits, then resolve the capital reduction.
- 5. Withhold IDU on any part deemed a dividend when the reduction is resolved.
- 6. Answer any BCP statistical request within its deadline.
Common traps
- A capital reduction is not automatically tax free: reserves and profits come out first (Ley 6380 art. 40).
- Revaluation reserves count as reserves for the ordering rule.
- Exchange houses and other BCP licensed entities need prior authorization to reduce capital (Ley 2794 art. 7).
- BCP requests for information are mandatory for non supervised companies too (Ley 489/95 art. 82).
Sources
- Ley Nº 117/91 De Inversiones (BACN)
- Ley Nº 6380/2019, text published by DNIT
- Ley Nº 6104/2018 amending Ley Nº 489/95 Orgánica del Banco Central del Paraguay (BACN)
- Resolución MTESS Nº 670/2026, minimum wage from 1 July 2026
Related pages
- fx/fx-and-capital-flows
- fx/dividends-and-profit-repatriation
- taxes/dividend-tax-idu
- entities/sociedad-anonima
- entities/sociedad-de-responsabilidad-limitada
- exiting/exiting-paraguay
- /country/paraguay/
- /calendar/
- Live dashboard
Related: Paraguay country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide
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