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Paraguay is consolidating itself as the main destination for Brazilian immigrants in South America, offering reduced taxes, cheap energy and opportunities that Brazil cannot guarantee.
For a long time, calling something "Paraguayan" in Brazil was almost synonymous with insult. Jokes, stereotypes, and derogatory comments shaped how Brazilians viewed their neighboring country. However, while Brazil laughed, Paraguay quietly changed course. It cut taxes, simplified laws, and opened up space to attract businesses and investors.
While the popular image associated Paraguay with smuggling, the country structured one of the most advantageous tax systems in South America. The result was not long in appearing: today, more than 263 thousand Brazilians live in Paraguayan territory, making it the main destination for Brazilian immigrants throughout the region.
From Brazilians to businesspeople and students
This migratory movement didn't start yesterday. Its roots go back to the dictator's period. Alfredo Stroessner (1954–1989), when the country, under strong state control and military support, sought to expand its economic and geopolitical presence.
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It was precisely at this time that the construction of the Friendship Bridge and Treaty of Itaipu – both financed by Brazil – facilitated the integration of the two countries. Beginning in the late 1960s, thousands of Brazilians crossed the border, first in search of cheap land and later for commercial opportunities.
In the 70s and 80s, entire families sold their possessions in Brazil to buy much larger farms in Paraguay. These immigrants became known as “Brazilians” and transformed cities like Santa Rita e Naranjal, introducing intensive soybean and corn cultivation that, decades later, would make Paraguay one of the largest grain exporters in the world.
The economic leap and the Maquila Law
With the end of the dictatorship in the 1990s, Paraguay began to reshape its economy. But it was in the 2000s that the decisive shift came: a simplified tax system, industrial incentives, and integration policies transformed the country into an investment hub.
A Maquila Law (Law 1064/97), established in the early 2000s, was a watershed moment. It drastically reduced the tax burden on exporting companies. Brazilian industries, stifled by high taxes and labor costs in their home countries, migrated to Paraguay in search of tax relief.
Second Francisco Ruiz Diaz, Deputy Minister of Industry, “70% of Paraguay’s exports to Brazil are the result of maquila”The textile sector is a striking example: Brazilian companies send inputs to Paraguay, produce locally, and re-export to Brazil, paying much lower taxes.
Paraguay as the new Brazilian Eldorado
In addition to tax incentives, other factors have made Paraguay even more attractive. The country offers electricity at prices well below the South American average, thanks to the Itaipu hydroelectric plant. To give you an idea, while in Brazil the average cost of industrial electricity is around 123 USD/MWh, in Paraguay this value drops to just 39 USD/MWhIt's like supplying three Paraguayan factories for the price of just one in Brazil.
Cities like Ciudad del Este exemplify this transformation. Previously known for the electronics trade and smuggling, today they concentrate more than 98 Brazilians, becoming business, industrial and student hubs.
The phenomenon of Brazilian students
If in the past migration was dominated by farmers, today Paraguay attracts a new profile of immigrants. Nearly 30 Brazilians study medicine at Paraguayan universitiesIn Felipe Monteiro's class, a student from Amapá in Ciudad del Este, only 2 of the 80 students are Paraguayan – the rest came from Brazil.
The difference in costs explains part of this movement. While in Bethlehem a monthly fee for Medicine comes to R $ 8 thousand, in Paraguay Felipe started paying R $ 1,2 thousand and today pay R $ 1,9 thousandThis massive savings has led entire families to rethink their children's academic future.
The unbeatable cost of living
Another great attraction is the cost of living, until 2119% lower compared to Brazil, according to international indexes. Although lunch in upscale areas can be 35% more expensive, Big Mac Index shows that in Brazil the sandwich costs 286% more than in Paraguay.
The real estate market also attracts attention: a one-bedroom apartment in a prime area costs on average R$ 1.931,75 in Paraguay, against R $ 3.019,48 in Brazil, an economy close to 356%. Utilities costs, such as electricity and gas in an 85 m² apartment, can be up to 743% cheaper on Paraguayan soil.
Tax system: the fiscal trump card
O Paraguayan tax system is the icing on the cake. Known as "10-10-10", applies 10% income tax for individuals, 10% for companies and 10% VAT (equivalent to ICMS). In addition, there are no inheritance or gift taxes, and income obtained abroad is taxed zero.
Inspired by the Mexican model, the Maquila Law still allows exporting companies to pay only 1% on gross revenue. This means that while Brazilian entrepreneurs face up to 27,5% IRPF e 34% for companies, their peers in Paraguay drastically reduce their costs simply by moving production headquarters.
Global comparison and residence facilities
Many Brazilians dream of moving to the United States, Canada, or Europe. However, in these destinations, visa bureaucracy, high real estate costs, and entry barriers make this dream a distant dream. Paraguay, on the other hand, offers simplified residency process.
In only 1,5 to 4 months the immigrant can obtain Temporary Residence. After 1 year and 9 months, you can now apply for Permanent Residency. Paraguayan citizenship takes longer – it can only be applied for after 3 years as a permanent resident, but the process is still faster than in developed countries.
The hidden side of growth
Not everything, however, is positive. Paraguay faces serious challenges: 27% of the population lives in poverty and the country occupies the 136th in the global corruption perceptions index, behind even Brazil, which is in 104th place. These obstacles reveal that, although attractive, Paraguay still has structural weaknesses.
Even so, according to the Elementary, which published a detailed report on this phenomenon, the Paraguayan rise and the mass migration of Brazilians are reflections of historical and structural changes in South America.
From “joke” to real opportunity
For decades, Paraguay was the target of ridicule. Today, however, the trend has reversed: Brazilians are crossing the border in search of economic freedom. fewer taxes and better quality of lifeWhile Brazil tightens rules and increases taxes, Paraguay grows, attracts investment, and reshapes the region's migration geopolitics.
The question remains: are we going to continue laughing at Paraguay or is it time to admit that the joke is on us?
I have been living in Paraguay for a year and a half and I can say that yes, it is better than Brazil in several aspects, there are still some issues here, but in a macro sense it is much better than Brazil.
Migrating to Paraguay is not yet an idea that has been ruled out… the only thing left to do is decide on the location.
Liberalism is great in theory. Zero taxes. Sensational. But what are public services like? Do the people have water and sewage? Are streets and roads paved? Is there a public health system (SUS)? Public schools? What is the level of education of the people? Does electricity reach every home? Without taxes, the government can't do anything. Who will? The private sector?
Oh well, said the Brazilian who lives in Switzerland in South America, but no, the highest tax rate in the world, healthcare is a butcher shop, crime, favelas everywhere, wanting to point out precariousness in a country that has not extorted its people.
Our public services are wonderful! We manage them all with maximum efficiency! We have sanitation and energy for everyone! Is this Brazil?
It could be...but it's not quite like that. It may even be that, for the less privileged class, the meager scraps of support our state provides are sufficient. But for a considerable group, who pay taxes and support this inefficient and extremely welfare-based public sector, looking at Paraguay and its liberalism is truly inspiring and, I dare say, tempting.
Does it have room for improvement? It probably does. But it's already much better than us in some aspects.
Brazil has these same problems and we still pay more!
Before criticizing, you have to know. While Brazil is breaking the small and medium-sized ones, Paraguay is welcoming... capturing more resources and making the country grow... now the Brazilian is saying what... like the dirty talking about the poorly washed.
My friend, here it's not zero tax, we pay a lot, especially in the countryside, more than Brazil, low infrastructure, no daycare centers, bad schools, no school transportation, poor roads, zero health... corruption is the highest in the world and violence!!
If I were you, I'd do a double take and compare my experience before posting this kind of comment. To give you an idea, my mother is diabetic. She spent over 10 years paying over R$1.000,00 per month for insulin, until she couldn't bear it anymore and had to take action. She chose to emigrate to Paraguay. She's now lived there for over two years. She's never had to pay for insurance again, much less the cost of insulin injections. She gets them free at the health center there every two weeks with monthly follow-up by a diabetologist. I ask you, here in Brazil, have you ever seen a doctor specializing in diabetes who offers free services to the public? I don't think there's even a doctor called a diabetologist here. I love my Brazil, but Paraguay is unreal when it comes to public services, water, electricity, and education. Unfortunately, we have to admit that we are archaic in these processes and very advanced in tax collection. In short, if there were 10% less corruption here in Brazil, we would be much better off.
The Brazilian Unified Health System (SUS) offers a range of actions and services for diabetes treatment, including comprehensive care in Primary Care, free medications (such as insulin) and supplies (test strips, syringes, and glucometers) at Basic Health Units (UBS), and dapagliflozin and other medications in the Popular Pharmacy Program. The program covers prevention, detection, control, and multidisciplinary monitoring. When patients cannot receive appropriate care in Primary Care, they can simply seek legal assistance to secure urgent relief, as the Ministry of Health/SUS frequently transfers resources to municipalities to ensure comprehensive care for patients.
"Resort to justice." There are several cases where people died before justice was served. This is when justice doesn't give the government a winning case. Wake up!!!
Betina, how are you? I am an external auditor at the Court of Auditors and I completely agree with you. You asked accurate and timely questions. Paraguay is a North American (liberal) economic experiment and the country is used geopolitically against the interests of Brazil and Argentina. Most public policies and state institutions were designed by consultants sponsored by the USA/USAID. Land concentration in Paraguay is one of the worst in the world, with a Gini Index of 0,93, and is characterized by the possession of 80% of the land by just 2% of the population, mostly large estates driven by corporate agribusiness – exporters. There is practically no family farming, peasant movements are massacred and their demands are denied by an elite that is more **** than the Brazilian one. Consequently, the country's agricultural/food production is entirely geared towards export (dollarized). You can see the result of this in cities bordering Brazil. Brazilians smuggle contraband/electronics from Paraguay and Paraguayans smuggle food from Brazil (just take a closer look at the inspection in Ciudad del Este to see this). Another good example of inequality in the country is labor rights. The working week is 48 hours. And the right to vacation is another good example: paid annual vacation varies according to length of service: 12 days for those with between 1 and 5 years of service, 18 days for those with between 6 and 10 years, and 30 days for those with more than 10 years. Public health in Paraguay, although theoretically universal, is precarious and faces problems of underfunding, inadequate infrastructure, and a shortage of supplies and professionals. Problems are also present in Brazil, but the situation there is more serious. The Paraguayan healthcare system is fragmented, disjointed, and centered on the hospital-centric model, which hinders coordination across different sectors, the provision of effective care to citizens, and increases costs. It is similar to the model that existed in Brazil before the SUS and only privileges workers with signed employment contracts, military personnel and public servants (Inamps/INPS/Santa Casas). Those who do not have the money to pay for private healthcare or do not fit into the previous categories rely on charities (of which there are few). Regarding the country's infrastructure, it is important to say that the most relevant works built in the country recently were either carried out with resources from the Mercosur Structural Convergence Fund (FOCEM) – a Mercosur financing mechanism to reduce regional asymmetries in member countries – or were supported with resources resulting from the renegotiation of the energy price agreed between President Lula and President Fernando Lugo (at the time of the negotiations the press and the traditional elite made a big fuss in Brazil) or were built within the scope of the Irsa Project (Bid/CAF/Gov. Brazil – South American Integration). When it comes to higher education, Paraguay faces a harsh reality regarding higher education courses. In the country, only 1 in 10 university students manages to complete their studies, while the remaining 9 abandon their academic path for economic and work reasons. The data are included in the final results of the National Survey of Higher Education Students (Enees) 2004, promoted by the Ministry of Education and Science (MEC). Finally, although Paraguay has experienced relative economic growth and attracted investment recently, the country still faces significant challenges in terms of social inequality, with a high concentration of income in the agro-export sector and a large number of informal workers. Low taxation leads to a chronic lack of investment in infrastructure and basic services, such as sanitation, roads, education and health, especially in rural areas, which makes it difficult to improve the population's living conditions.
LOL...it was taking a while for a civil servant to show his identity...exactly the people most responsible for the current situation in Brazil...trash...
Hahahahahaha by your "logic", tax = public services. Brazil collected 3 TRILLION in 1 year and I ask you: where are the public services?!?!??
IF THERE ARE NO TAXES, WHO WILL BUILD THE ROADS?!??
Get out of the matrix, my daughter. The State is the god that failed.
Do the following: research all this information about these two countries and be surprised. Despite charging one of the highest taxes in the world, Brazil ranks last among the 30 largest economies and provides the least social welfare. Get informed.