Countries › Paraguay › Guide › 16. What is normal abroad but not here › Dollar contracts are enforceable, but wages are paid in guaraníes

Dollar contracts are enforceable, but wages are paid in guaraníes

Argentina. For full detail on Argentina, go to The Argentine Thread.

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

Several countries in the region force dollar debts to be paid in local currency or restrict access to dollars. In Paraguay, contracts and obligations in foreign currency are valid and enforceable in the agreed currency, and capital and profits move freely. The exception that surprises foreign groups is payroll: wages must be paid in legal tender, with at most 30 percent in kind.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026 (planilla de cotizaciones). Conversions are for orientation only.

Key facts

Contracts in foreign currency enforceable in the agreed currency	yes textLey 434/1994 art. 1, as of 1994-10-10 · in force
Maximum share of wages payable in kind	30 %Código del Trabajo art. 231, as of 1993-06-29 · in force
Free remittance of dividends abroad	free, no prior authorization textLey 117/1991 art. 6, as of 1992-01-07 · in force
BCP reference rate, PYG per US dollar, 28 October 2026	5868.31 PYGBCP planilla de cotizaciones, as of 2026-10-28 · in force

The rule

1. Foreign currency obligations are valid. Legal acts, obligations and contracts in foreign currency are valid and enforceable in the agreed currency. They may be secured by registered pledges, mortgages, warrants and other guarantees for the amount in that currency, registered with the amount of the debt and the guarantee. Court attachments are recorded in the currency of the obligation, and foreign currency debts in executory instruments can be claimed through the fast executive procedure.
Cost to do it: No fee for the currency choice; the usual registration costs of the guarantee apply.
Example: A Paraguayan importer signs a US$1,000,000 supply credit secured by a mortgage registered in US dollars. / About PYG 5,868,310,000 at the BCP reference rate.Ley Nº 434/1994, obligations in foreign currency (promulgated 10 October 1994), art. 1, 2, 3 (third paragraph) and 4, 1994-10-10 official text · verified 2026-10-28

2. Insolvency converts at the selling rate. In a creditors' meeting proceeding foreign currency debts are converted provisionally into guaraníes only for the vote, and finally at the selling exchange rate on each payment date under the arrangement; in bankruptcy they are converted at the selling rate on the day bankruptcy is declared.
Cost to do it: No fee; exchange rate risk shifts to the creditor from the bankruptcy date.
Example: A US$200,000 claim in a bankruptcy declared on a day when the selling rate is PYG 5,900 is fixed at PYG 1,180,000,000. / Illustrative rate, not a published quotation.Ley Nº 434/1994, art. 3 (first and second paragraphs) and 5, 1994-10-10 official text · verified 2026-10-28

3. Wages must be paid in legal tender. Salaries are paid in legal tender (moneda de curso legal); paying them in vouchers, promissory notes, coupons, tokens or other substitutes for money is prohibited. Payment in kind is allowed only partially and exceptionally, up to 30 percent, if it suits the personal use of the worker and family and is fairly valued.
Cost to do it: No fee; a breach is a labor violation.
Example: An expatriate paid the equivalent of US$5,000 a month is paid about PYG 29,341,550 in guaraníes, and housing in kind may cover at most 30 percent. / US$5,000, of which at most US$1,500 in kind.Ley Nº 213/1993, Código del Trabajo, art. 231 (not amended by Ley 496/1995), 1993-06-29 official text · verified 2026-10-28

4. Money moves freely. Paraguay guarantees free exchange without restrictions on the entry and exit of capital or on remitting dividends, interest, commissions, technology royalties and other items abroad, subject only to the taxes set by law.
Cost to do it: No authorization or registration fee; bank charges and taxes apply.
Example: A subsidiary converts PYG 58,683,100 of after tax profit and remits it without prior approval. / About US$10,000.Ley Nº 117/1991, investment law (promulgated 7 January 1992), art. 6, 1992-01-07 official text · verified 2026-10-28

Item	Rule	Norm
Commercial contracts and loans	Valid and payable in the agreed currency	Ley 434/1994 art. 1
Guarantees	Registered in the currency of the debt	Ley 434/1994 art. 2
Bankruptcy	Converted at the selling rate on the declaration day	Ley 434/1994 art. 3
Wages	Legal tender; up to 30% in kind	Código del Trabajo art. 231
Remittances	Free, subject to tax	Ley 117/1991 art. 6

Currency rules at a glance

Worked example

Argentine and Brazilian groups often arrive used to tighter currency rules at home. In Paraguay a dollar loan, lease or supply contract is enforced in dollars, and profits can be converted and sent abroad without approval; only the payroll has to run in guaraníes. For the Argentine side of a cross border structure, see The Argentine Thread guide.

Step by step

Draft commercial contracts in the currency you want to be paid in; Ley 434 enforces it.
Register guarantees showing the foreign currency amount.
Run payroll in guaraníes and document any benefit in kind and its value.
Keep remittance paperwork for the tax withholding covered in the FX and taxes sections.

Common traps

Paying a local employee in dollars: wages must be paid in legal tender (art. 231).
Assuming the currency clause survives insolvency unchanged: in bankruptcy the claim is fixed in guaraníes at the selling rate of the declaration day (Ley 434 art. 3).
Over relying on benefits in kind: the 30 percent cap applies (art. 231).

Sources

← Working hours, overtime and restInterest rate ceiling and penalty free prepayment →

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