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What is normal abroad but works differently in Paraguay

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

Paraguay is an open market with free exchange, but several habits foreign investors bring from home work differently here, each with a cost or a deadline written into law. Employers cannot dismiss at will: notice of 30 to 90 days, 15 daily wages per year of service, a 13th salary and, after ten years, job stability with a double indemnity. Interest is capped at 30 percent above the average consumer rate, nationals of neighbouring countries cannot own rural land in the 50 km border zone, share transfers must be reported within days, and a general data protection law only applies from late 2027.

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

Key facts

Dismissal indemnity per year of service or fraction over six months	15 daily wagesCódigo del Trabajo art. 91 (Ley 496/1995), as of 1995-08-22 · in force
Minimum dismissal notice (up to one year of service)	30 daysCódigo del Trabajo art. 87, as of 1993-06-29 · in force
Maximum dismissal notice (more than ten years of service)	90 daysCódigo del Trabajo art. 87, as of 1993-06-29 · in force
Years of service that give job stability	10 yearsCódigo del Trabajo art. 94, as of 1993-06-29 · in force
Aguinaldo as a fraction of annual remuneration	1/12 fractionCódigo del Trabajo art. 243, as of 1993-06-29 · in force
Minimum paid annual leave (up to five years of service)	12 business daysCódigo del Trabajo art. 218 (Ley 496/1995), as of 1995-08-22 · in force
Minimum wage, monthly, from 1 July 2026	3044000 PYGDecreto 6225/2026; Res. MTESS 670/2026, as of 2026-07-01 · in force
Minimum daily wage (jornal mínimo) from 1 July 2026	117077 PYGDecreto 6225/2026; Res. MTESS 670/2026, as of 2026-07-01 · in force
Usury threshold above the average consumer credit rate	30 %Ley 489/1995 art. 44 (Ley 2339/2003), as of 2003-12-26 · in force
Credit card rate cap as a multiple of the average deposit rate	3 timesLey 5476/2015 art. 9, as of 2015-08-25 · in force
Border security zone width for rural land	50 kmLey 2532/2005 art. 1, as of 2005-02-17 · in force
Fine for a void border zone deal, multiple of operation value	2 timesLey 2532/2005 art. 8, as of 2005-02-17 · in force
Business days for the buyer to report a share transfer to the company	5 business daysLey 5895/2017 art. 5, as of 2017-10-05 · in force
Months from publication until Ley 7593/2025 enters into force	24 monthsLey 7593/2025 art. 57, as of 2025-11-27 · pending
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, 27 October 2026	5847.90 PYGBCP planilla de cotizaciones, as of 2026-10-27 · in force

The rule

1. No dismissal at will without cost. An indefinite contract can only be ended with prior notice of 30 days up to one year of service, 45 days from one to five years, 60 days from five to ten years and 90 days beyond ten years; an employer that skips the notice pays the salary for the notice period instead. A dismissal without just cause, with or without notice, also costs an indemnity of 15 daily wages for each year of service or fraction over six months, calculated on the average pay of the last six months.
Cost to do it: Notice (or pay in lieu) plus 15 daily wages per year or fraction over six months. On a monthly salary of PYG 10,000,000 (daily wage PYG 333,333), each year costs PYG 5,000,000 (US$855).
Example: A worker paid PYG 10,000,000 a month dismissed without cause after 4 years and 8 months counts as 5 years: indemnity PYG 25,000,000 plus PYG 15,000,000 for 45 days of omitted notice, PYG 40,000,000 in total. / About US$4,275 of indemnity plus US$2,565 in lieu of notice, about US$6,840 in total.Ley Nº 213/1993, Código del Trabajo, as amended by Ley Nº 496/1995 (promulgated 22 August 1995), Código del Trabajo art. 87, 90 and 92 b (original text); art. 91 (text given by Ley 496/1995), 1995-08-22 official text · verified 2026-10-28

2. Ten years of service brings job stability. A worker who completes ten uninterrupted years with the same employer can only be dismissed for a just cause proven beforehand; if the cause is not proven the employer must reinstate the worker with back pay, and where reinstatement is not feasible, or the worker opts out of it, the employer pays double the ordinary indemnity plus any omitted notice. The same double indemnity is owed to stable workers when the establishment closes without proven force majeure.
Cost to do it: Twice the ordinary indemnity, plus 90 days of notice or pay in lieu.
Example: A stable worker paid PYG 10,000,000 a month with 11 years of service is owed PYG 110,000,000 (double PYG 55,000,000) plus PYG 30,000,000 for 90 days of omitted notice. / About US$18,810 plus US$5,130, about US$23,940 in total.Ley Nº 213/1993, Código del Trabajo (promulgated 29 June 1993), art. 94, 96, 97, 98 and 99 (not amended by Ley 496/1995), 1993-06-29 official text · verified 2026-10-28

3. A 13th salary and paid leave by seniority. Every worker earns an aguinaldo equal to one twelfth of all remuneration accrued in the calendar year (salary, overtime, commissions and other items), payable before 31 December or when the job ends, and a proportional aguinaldo is due on resignation or dismissal on top of any indemnity. Paid annual leave is 12 business days up to five years of service, 18 from five to ten years and 30 beyond ten years, starting on a Monday.
Cost to do it: The aguinaldo adds one twelfth (about 8.3 percent) to annual pay before social security; leave grows from 12 to 30 business days.
Example: A worker paid PYG 10,000,000 every month of 2026 receives an aguinaldo of PYG 10,000,000 before 31 December 2026; at the minimum wage of PYG 3,044,000 the aguinaldo is PYG 3,044,000. / About US$1,710, or about US$521 at the minimum wage.Ley Nº 213/1993, Código del Trabajo; art. 218 as reworded by Ley Nº 496/1995, art. 243 and 244 (original text); art. 218 (text given by Ley 496/1995), 1995-08-22 official text · verified 2026-10-28

4. Interest has a legal ceiling. Rates are set freely by supply and demand within limits: compensatory and punitive rates are usurious when their effective rate exceeds by 30 percent the average effective annual rate that banks and finance companies charge on consumer credit, by term and currency, which the Central Bank publishes monthly. From default, compensatory interest becomes default interest at no more than the agreed rate, a punitive surcharge may not exceed 30 percent of the default rate, and interest may not be capitalised on default or punitive interest. Credit card interest may not exceed three times the average deposit rate in the market.
Cost to do it: No fee; the limit caps pricing. Check the Central Bank's monthly averages for the term and currency before setting a rate.
Example: Illustration only: if the published average consumer rate for a term and currency were 20 percent, any compensatory rate above 26 percent would be usurious; on PYG 100,000,000 for one year that caps interest at PYG 26,000,000. / On the same illustration, about US$17,100 of principal and at most US$4,446 of interest.Ley Nº 489/1995, Central Bank charter, art. 44 as reworded by Ley Nº 2339/2003 (promulgated 26 December 2003); Ley Nº 5476/2015 on credit and debit cards (promulgated 25 August 2015), Ley 489/1995 art. 44 (text given by Ley 2339/2003 art. 1); Ley 5476/2015 art. 9, 2003-12-26 official text · verified 2026-10-28

5. No rural land near the border for neighbours. In a 50 km security zone along land and river borders, nationals of neighbouring countries (Argentina, Bolivia and Brazil) and companies majority owned by them cannot own, co own or hold usufruct over rural land unless the Executive authorises it by decree on public interest grounds. Shares of companies seeking such land must be registered and non endorsable, notaries may not record barred deals, and a breach is void and carries a fine of twice the value of the operation. Rights acquired before the law, inheritance, bank foreclosures and neighbouring nationals with permanent residence are excepted.
Cost to do it: A void deal plus a fine of twice its value; budget a Catastro certificate, which must state whether the land is in the zone (art. 7).
Example: A company majority owned by Argentine nationals that buys a PYG 2,000,000,000 ranch inside the zone without a decree loses the deal and faces a PYG 4,000,000,000 fine. / About US$342,003 of land and a fine of about US$684,006.Ley Nº 2532/2005, border security zone (promulgated 17 February 2005), art. 3 as reworded by Ley Nº 2647/2005 (promulgated 18 August 2005), Ley 2532/2005 art. 1, 2, 4, 5 and 8; art. 3 (text given by Ley 2647/2005), 2005-02-17 official text · verified 2026-10-28 · changed: Ley Nº 2647/2005 of 18 August 2005 reworded art. 3 to add the exceptions for inheritance, bank foreclosures and permanent residents.

6. No bearer shares, and share transfers are reported within days. Bearer shares were converted by law into registered shares; companies that did not convert lose access to the financial system and have their RUC tax number blocked. Every share transfer must be reported by the buyer to the company within five business days, and by the company to the Abogacía del Tesoro (part of the Ministerio de Hacienda in the law's text) within a further five business days. Breaches are fined 50 to 500 daily minimum wages. Listed issuers follow their own regime.
Cost to do it: No filing fee; fines from PYG 5,853,850 to PYG 58,538,500 at the daily minimum wage of PYG 117,077 (Res. MTESS 670/2026).
Example: A foreign group that sells its Paraguayan S.A. on 2 November must make sure the buyer notifies the company within five business days and the company notifies the Abogacía del Tesoro within the next five. / Fines of about US$1,001 to US$10,010.Ley Nº 5895/2017, transparency in share companies (promulgated 5 October 2017), art. 2, 3, 4, 5, 6 and 8, 2017-10-05 official text · verified 2026-10-28

7. A general data protection law exists but is not yet in force. Ley 7593/2025 protects the personal data of individuals for any automated or partly automated processing, but enters into force only 24 months after its official publication on 27 November 2025, so its duties apply from late 2027. Until then, foreign groups used to GDPR style rules should not assume an equivalent general regime already applies.
Cost to do it: No cost before entry into force; budget the compliance project during 2027.
Example: A Paraguayan subsidiary running a customer database should map its processing in 2027 so it is ready when the law applies. / Not applicable.Ley Nº 7593/2025, personal data protection (promulgated and published 27 November 2025), art. 1, 2 and 57, 2025-11-27 official text · verified 2026-10-28 · changed: Ley Nº 7593/2025, published 27 November 2025, creates a general data protection regime, in force 24 months after publication under art. 57.

8. What is not different: money moves freely. Unlike several neighbours, Paraguay guarantees free exchange without restrictions on the entry and exit of capital or on remitting dividends, interest, commissions and royalties abroad; operations are subject only to the taxes set by law.
Cost to do it: No authorization or registration fee for the exchange itself; bank charges and taxes on the payment apply.
Example: A subsidiary converts PYG 58,479,000 of after tax profit to US dollars at the market rate and remits it without prior approval. / About US$10,000 remitted, subject to the dividend tax covered in the FX and exiting sections.Ley Nº 117/1991, investment law (promulgated 7 January 1992), art. 6, 1992-01-07 official text · verified 2026-10-28

Common abroad	In Paraguay	Rule
Dismissal at will	Notice of 30 to 90 days plus 15 daily wages per year without just cause	Código del Trabajo art. 87, 90 and 91
Seniority does not lock in a job	Stability after 10 years; reinstatement or double indemnity	Código del Trabajo art. 94 to 99
Twelve salaries a year	Aguinaldo of one twelfth of annual pay, before 31 December	Código del Trabajo art. 243 and 244
Freely priced interest	Usury above 130 percent of the average consumer rate; cards capped at 3 times the deposit rate	Ley 489/1995 art. 44; Ley 5476/2015 art. 9
Any foreigner can buy farmland	Neighbouring nationals barred from rural land within 50 km of the border	Ley 2532/2005 art. 1 and 2
Bearer shares or unreported transfers	Registered shares only; transfers reported in 5 plus 5 business days	Ley 5895/2017 art. 2 to 6
A general data protection law applies	Ley 7593/2025 applies 24 months after 27 November 2025	Ley 7593/2025 art. 57
Exchange controls on profits (common in the region)	Free exchange and free remittance of dividends	Ley 117/1991 art. 6

Habit abroad and the Paraguayan rule

Worked example

A Brazilian distributor hires 20 staff in Asunción at PYG 10,000,000 (US$1,710) a month each. Per worker, it accrues PYG 10,000,000 a year for the aguinaldo, and plans for a dismissal cost of PYG 5,000,000 (US$855) per year of service plus notice. It caps its customer credit rates against the Central Bank's monthly consumer averages and, because its owners are Brazilian, keeps any land purchase outside the 50 km border zone or seeks a decree first.

Step by step

Before hiring, budget notice, indemnity and the aguinaldo per worker and accrue them monthly.
Track each worker's seniority: plan reviews well before the ten year stability date.
Before lending or financing sales on credit, check the Central Bank's monthly average consumer rates for the term and currency and stay below 130 percent of them.
Before buying rural land, get a Servicio Nacional de Catastro certificate showing whether the plot is in the border zone, and check the nationality of the owners up the chain.
After any share transfer, diarise five business days for the buyer's notice to the company and five more for the company's notice to the Abogacía del Tesoro.
Start a data protection compliance plan in 2027 for Ley 7593/2025.

Common traps

Counting service badly: a fraction over six months counts as a full year for the indemnity (Código del Trabajo art. 91 as amended by Ley 496/1995), and the base is the average pay of the last six months, including variable pay (art. 92 b).
Reading the 1993 text of the Código del Trabajo: Ley 496/1995 rewrote about 70 articles, including art. 91 (indemnity) and 218 (vacation), so check the amendment list before relying on any article.
Assuming a stable worker can be bought out like any other: after ten years, dismissal without previously proven just cause leads to reinstatement or a double indemnity (art. 94 to 97).
Forgetting the proportional aguinaldo on exit: it is owed on resignation as well as dismissal, on top of any indemnity (art. 244).
Holding border zone land through a company: the ban reaches companies majority owned by neighbouring nationals, and the deal is void with a fine of twice its value (Ley 2532/2005 art. 2 and 8).
Treating the default penalty as free: punitive interest may not exceed 30 percent of the default rate and no interest may be capitalised on default or punitive interest (Ley 489/1995 art. 44).

Sources

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