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FX and capital flows in Paraguay: free exchange, repatriation and the taxes on money going out

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

Paraguay has no capital controls: Ley 117/91 guarantees free exchange with no restrictions on bringing capital in or taking capital, dividends, interest, royalties and fees out, and foreign investment needs no prior authorization or registration. The guaraní floats in a free market where the Central Bank sets exchange rules and intervenes with reserves only to keep the market orderly; it publishes a daily reference rate. What stands between a Paraguayan company and its foreign owner is tax, not FX: 15 percent dividend tax for non residents, 15 percent non resident income tax on deemed net income from interest, royalties and other remittances, and deduction limits on payments abroad, plus a mandatory customs declaration for cash above US$10,000.

USD figures use PYG 5,847.90 per US dollar, the Banco Central del Paraguay reference quotation for 27 October 2026 (latest published planilla on the verification date). Conversions are for orientation only.

Key facts

Access to foreign currency for dividends	Free, guaranteed by law with no restrictions Ley 117/91 art. 6, as of 2026-10-28 · in force
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
BCP reference rate, guaraníes per US dollar (27 Oct 2026)	5847.90 PYGBCP reference rate methodology, Resolución Nº 3, Acta Nº 31 of 13 July 2026, as of 2026-10-27 · in force
Dividend tax (IDU) on dividends to non residents	15 %Ley 6380/2019 art. 43, as of 2026-10-28 · in force
Dividend tax (IDU) on dividends to residents	8 %Ley 6380/2019 art. 43, as of 2026-10-28 · in force
Effective INR on interest to the foreign parent or related parties	15 %Ley 6380/2019 art. 75 num. 6 and art. 76, as of 2026-10-28 · in force
Effective INR on interest to unrelated foreign lenders	4.5 %Ley 6380/2019 art. 75 num. 1 a) and art. 76, as of 2026-10-28 · in force
Effective INR on royalties and technical assistance to the parent or related parties	15 %Ley 6380/2019 art. 73 num. 1, art. 75 num. 6 and art. 76, as of 2026-10-28 · in force
INR rate on deemed net income	15 %Ley 6380/2019 art. 76, as of 2026-10-28 · in force
IRE cap on related party interest, royalties and technical assistance	30 % of net incomeLey 6380/2019 art. 15 num. 23, as of 2026-10-28 · in force
Cash and bearer instruments declaration threshold at the border	10000 USDResolución DNA 475/2021; Ley 1015/97, as of 2025-07-22 · in force
Maximum cash that may enter or leave	No limit (declaration above US$10,000) Resolución DNA 475/2021, as of 2025-07-22 · in force

The rule

1. Free exchange and repatriation guarantee. A free exchange regime is guaranteed with no restrictions on the entry and exit of capital or on remitting dividends, interest, commissions, technology transfer royalties and other items abroad. All exchange operations, remittances and transfers remain subject to the taxes set by law. Private investment needs no prior authorization and no registration beyond those already required by law, and the foreign investor has the same guarantees, rights and obligations as national investors.
Cost to do it: No FX permit, Central Bank registration or fee to bring in or take out capital: PYG 0 (US$0). Banks charge their own transfer commissions and the exchange spread, which the law does not fix.
Example: A foreign parent wires PYG 584,790,000 of capital into its Paraguayan S.A. and later takes it back by a formal capital reduction; neither leg needs an FX authorization, only the corporate and tax steps that apply. / US$100,000 in and US$100,000 out with no exchange permit, quota or waiting period.Ley Nº 117/91 De Inversiones, Art. 2, 4 and 6, 1992-01-07 official text · verified 2026-10-28

2. Central Bank powers over the exchange market. The Banco Central del Paraguay (BCP) has the fundamental objectives of preserving the stability of the value of the currency and promoting the efficiency, integrity and stability of the financial system. It takes part in formulating exchange policy and is responsible for executing it; its Board executes monetary, credit and exchange policy, sets the guidelines and instruments for it and issues the regulations on international exchange operations. Banks, finance companies, other credit entities and exchange houses are supervised by the Superintendencia de Bancos, and breaches of exchange rules and regulations can be sanctioned. International reserves are exclusively for keeping transactions in the free exchange market (mercado libre de cambio) normal, overcoming temporary balance of payments difficulties and preserving the external value of the guaraní. The BCP's daily reference rate is the weighted average of interbank spot dollar trades between 8:30 and 13:00 on the business day.
Cost to do it: The BCP reference rate is free to consult. Exchange spreads and commissions are set by each bank, finance company or exchange house.
Example: On 27 October 2026 the BCP reference rate was PYG 5,847.90 per US dollar and PYG 3.80 per Argentine peso. / US$1,000 converts to PYG 5,847,900 at the reference rate before the bank's spread.Ley Nº 489/95 Orgánica del Banco Central del Paraguay, as amended by Ley Nº 6104/2018, Art. 3, 4 literal a), 19 numerals 2 and 11, 31 literal a), 61 and 83 (texts as reworded by Ley 6104/2018 art. 1), 2018-07-03 official text · verified 2026-10-28 · changed: Ley 6104/2018, promulgated on 3 July 2018 and published on 6 July 2018, reworded the BCP charter articles on objectives, functions, Board powers, supervision, reserves and sanctions cited here.

3. Dividend tax on profits paid abroad (IDU). Profits, dividends or returns made available or paid to owners, partners or shareholders by Paraguayan companies, including profits of permanent establishments of foreign entities (remitted to the head office), are taxed at 15 percent when the recipient is a non resident and 8 percent when it is a resident. The payer withholds and is jointly liable, and for non residents the tax is final. The tax arises when the shareholders' meeting resolves the distribution, whatever the payment date; for an S.R.L. without a meeting, on the date in its bylaws or, failing that, in the fourth month after year end. Profits sent to the legal reserve, voluntary reserves or capitalization are not taxed until capital is redeemed. A capital reduction is deemed to return first reserves (including revaluation), then undistributed profits and only then contributed capital, and loans to shareholders (outside financial intermediation within 2 percent of the loan book), cash shortfalls above 10 percent of the cash account and withdrawals without consideration are presumed dividends.
Cost to do it: 15 percent of the gross dividend paid to a non resident shareholder, withheld at source; no FX cost beyond the bank's spread.
Example: Declared dividend of PYG 584,790,000 to a foreign parent: IDU 15 percent PYG 87,718,500 withheld; PYG 497,071,500 wired abroad. Starting from PYG 649,766,667 of pre tax profit, IRE at 10 percent (PYG 64,976,667) leaves the PYG 584,790,000 dividend. / US$100,000 dividend: US$15,000 withheld, US$85,000 received. On US$100 of pre tax profit, 10 percent IRE plus 15 percent IDU on the remaining US$90 leaves US$76.50, a combined 23.5 percent.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 40, 41, 42, 43 and 44 (IDU), 2019-09-25 official text · verified 2026-10-28

4. Non resident income tax (INR) on interest, royalties, fees and other remittances. Non residents are taxed on Paraguayan source income, which expressly includes interest on loans from the foreign head office or other branches, royalties and technical assistance paid by branches, interest and commissions on loans from foreign lenders, services from abroad linked to IRE taxed income, and any other amount made available, remitted or paid abroad (except payments for imports of goods). The rate is 15 percent on a deemed net income fixed without proof to the contrary: 30 percent of gross interest and commissions on loans from foreign public or private lenders and multilateral bodies that are not related parties (including bonds placed on recognised foreign markets); 100 percent of amounts paid to partners, shareholders, the head office or related entities; and 100 percent of other amounts not specifically listed. The tax arises when funds are made available, remitted or paid, whichever is first (offset, novation and settlement count), the payer withholds and is jointly liable, the tax cannot be deducted from its own base and it is final. Paraguayan public debt and securities traded on regulated stock exchanges are exempt.
Cost to do it: Effective withholding of 4.5 percent (15 percent of 30 percent) on interest to unrelated foreign banks and 15 percent (15 percent of 100 percent) on interest, royalties and fees paid to the foreign parent or related companies.
Example: Annual interest of PYG 584,790,000: to an unrelated foreign bank, INR PYG 26,315,550; to the foreign parent, INR PYG 87,718,500. / US$100,000 of interest: US$4,500 withheld if the lender is an unrelated foreign bank, US$15,000 if it is the parent.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 71, 72, 73, 74, 75, 76, 77 and 79 (INR), 2019-09-25 official text · verified 2026-10-28

5. Deduction limits on payments abroad. For the 10 percent corporate income tax (IRE), interest, royalties and technical assistance paid to the foreign head office, branches, related companies or shareholders are deductible only at market prices, with interest rates not above the BCP published average deposit (passive) rate for similar operations, only if the corresponding taxes have been paid, and only up to 30 percent of the year's net income before that deduction; the interest stays subject to withholding even when not deductible. Other expenses incurred abroad are capped at 1 percent of gross income unless the foreign provider is subject to INR and the withholding is made, in which case they are fully deductible.
Cost to do it: Non deductible related party interest above the cap costs the 10 percent IRE on the excess, on top of the 15 percent INR already withheld.
Example: Net income before related party charges of PYG 2,923,950,000 allows at most PYG 877,185,000 (30 percent) of interest, royalties and technical assistance to the parent; a PYG 1,169,580,000 charge leaves PYG 292,395,000 non deductible, PYG 29,239,500 of extra IRE. / On US$500,000 of net income the related party cap is US$150,000; a US$200,000 charge loses US$50,000 of deduction, US$5,000 of extra IRE, while INR of US$30,000 is still withheld on the full US$200,000.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 15 numerals 10, 18 and 23 (IRE), 2019-09-25 official text · verified 2026-10-28

Flow	FX access	Tax on the way out	Effective rate	Norm
Dividends to a foreign shareholder	Free, no permit	IDU withheld by the company	15%	Ley 117/91 art. 6; Ley 6380 art. 43
Branch profits to the head office	Free, no permit	IDU withheld by the branch	15%	Ley 6380 art. 40 and 43
Return of contributed capital	Free, no permit	None on contributed capital, but reserves and retained profits are deemed returned first and taxed as dividends	0% or 15%	Ley 6380 art. 40
Interest to an unrelated foreign bank	Free, no permit	INR on 30% deemed net income	4.5%	Ley 6380 art. 75 num. 1 a) and 76
Interest, royalties, technical assistance to the parent or related parties	Free, no permit	INR on 100% deemed net income; IRE deduction capped at 30% of net income	15%	Ley 6380 art. 15 num. 23, 75 num. 6 and 76
Other payments abroad not listed (except imports of goods)	Free, no permit	INR on 100% deemed net income	15%	Ley 6380 art. 73 num. 13, 75 num. 7 and 76
Cash carried across the border	No limit	Customs declaration above US$10,000	n/a	Res. DNA 475/2021; Ley 1015/97

Money out of Paraguay: FX access and tax by flow (BCP rate PYG 5,847.90 per US$, 27 Oct 2026)

Worked example

US$100,000 dividend to a foreign parent: a Paraguayan S.A. whose shareholders' meeting declares PYG 584,790,000 (US$100,000) of dividends withholds IDU at 15 percent, PYG 87,718,500 (US$15,000), files and pays it to DNIT, and wires PYG 497,071,500 (US$85,000), or the dollar equivalent bought from its bank, without any exchange permit. Paraguay's comprehensive income tax treaties on the DNIT list are with Chile, Taiwan, the United Arab Emirates, Uruguay and Qatar; for parents elsewhere, including Argentina, relief for the 15 percent depends on home country rules.
Financing choice, US$1,000,000 loan at 8 percent: annual interest is PYG 467,832,000 (US$80,000). From an unrelated foreign bank, INR is 4.5 percent, PYG 21,052,440 (US$3,600), and the interest is deductible if within market rates. From the parent, INR is 15 percent, PYG 70,174,800 (US$12,000), and the deduction is also limited to the BCP average passive rate and to 30 percent of net income.
Capital first or profits first: a company with PYG 1,169,580,000 (US$200,000) of retained earnings and PYG 584,790,000 (US$100,000) of contributed capital reduces capital by PYG 584,790,000. Because the law deems reserves and undistributed profits to be returned first, the whole reduction is treated as a dividend and bears IDU of PYG 87,718,500 (US$15,000) for a non resident shareholder.

Step by step

1. Bring capital in by bank transfer to the Paraguayan company's account; no BCP registration or investment authorization exists, but the bank applies know your customer and beneficial ownership checks and may ask for the source of funds.
2. Keep the corporate paper trail: record the contribution in the company's books and, for an S.A., in the share register, so that a later capital reduction can show which part is contributed capital.
3. For dividends, hold the shareholders' meeting approving the distribution; for IDU purposes the tax arises on that date, whether or not cash moves.
4. Withhold IDU (15 percent for non residents) or INR (15 percent on the deemed net income) when funds are made available, remitted or paid, whichever comes first, and pay it to DNIT in the form and deadline it sets.
5. Buy dollars from a bank, finance company or exchange house at a negotiated rate (the BCP reference rate is a benchmark only) and send the transfer; no exchange form or permit is required.
6. Check the IRE deduction tests before booking related party interest, royalties or technical assistance: market price, interest at or below the BCP average passive rate, tax withheld and paid, and the 30 percent of net income cap.
7. If anyone carries more than US$10,000 in cash or bearer instruments across the border, file the electronic traveller declaration with DNIT (customs) before travelling.

Common traps

Free exchange is not tax free: Ley 117/91 art. 6 itself says every remittance stays subject to tax, and Ley 6380 art. 73 num. 13 makes any amount paid abroad (other than for imports of goods) Paraguayan source income taxed at an effective 15 percent unless a specific lower deemed rate applies.
Capital reductions are taxed first as profit distributions: reserves, revaluation reserves and retained earnings are deemed returned before contributed capital (Ley 6380 art. 40), so pay out or capitalize profits deliberately before planning a tax free return of capital.
Loans to shareholders and money taken out without consideration are presumed dividends and bear IDU (Ley 6380 art. 40); cash pooling or upstream loans to a foreign parent need care.
The 4.5 percent rate on interest only applies to unrelated lenders; a back to back loan or a loan from a group finance company falls under the 100 percent deemed income rule and 15 percent.
Expenses abroad without INR withholding are deductible only up to 1 percent of gross income (Ley 6380 art. 15 num. 18), so skipping withholding on a foreign service fee usually costs the deduction too.
For a dividend, IDU arises when the shareholders' meeting resolves the distribution, not when cash is paid (Ley 6380 art. 44), so a declared but unpaid dividend still triggers the withholding obligation.
There is no cap on cash at the border, but undeclared amounts above US$10,000 are dealt with as a customs and anti money laundering matter; Ley 1015/97 art. 12 applies its anti money laundering controls to operations above US$10,000, and DNIT runs the electronic traveller declaration under Resolución DNA 475/2021.

Sources

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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