Employer of Record in Paraguay
Skuad’s Employer of Record Paraguay (EOR) solutions make business expansion to Paraguay easy and hassle-free. Our unique HR platform allows companies to hire exceptionally talented employees in Paraguay, without having to set up a separate legal entity. It streamlines the process of hiring and onboarding a remote team by handling payroll management, taxation, and other legal compliances. To learn more about Skuad, Book a demo today.
Paraguay At A Glance
Population: 7.04 million (2019)
Currency: Paraguay Guarani
Capital city: Asuncion
Languages spoken: English, Spanish, Guarani
GDP: -0.03% (2019)
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What You Must Know Before Employing In Paraguay
While trying to set up and expand your local entity in Paraguay, one needs to have a thorough knowledge of the laws of employment in Paraguay and the rules related to hiring a local citizen or foreign national.
Here are some of the rights and entitlements of employees in Paraguay:
To ensure your expansion endeavors are in compliance with the Paraguay employment laws, Contact Skuad today.
Contractors Vs. Full-Time Employees
The employment laws of Paraguay generally favor full-time employees. Some of the benefits are weekly rest days, fixed working hours, remuneration, medical insurance, etc. On the other hand, a contractor is usually hired as a temporary replacement for experienced and skilled professionals and doesn’t get any of the benefits provided to full-time employees. Contractors provide flexibility to the company in staffing and simplify the payroll process.
Due to high tax rates imposed on full-time employees, many companies are switching to contract-based work to reduce their tax burden. In addition, the strict employment laws have created more opportunities for contractors in Paraguay.
Skuad’s EOR services can help you address your queries regarding short-term and full-time employees. Contact us here to learn more.
Hiring in Paraguay
For hiring employees in Paraguay, you will need to have a local entity. A candidate applying for a job in Paraguay is assessed based on the professional skills required for the job offered. Various common background checks like education, criminal records, health checks, experience, permission to work in Paraguay, etc., are carried out before hiring an employee. An employer is confined by law to ask the candidate only those questions that relate to the nature and working conditions of the job offered. The applicant has the full right not to answer the question that violates the law and is not related to the job. When an employer hires an applicant, they need to ensure that the employee has a single permit to work in Paraguay.
Skuad’s scope of work is not limited to hiring; we can fulfill most of the HR-related work, including payroll management, compliance and tax filing, and expense management. Our EOR services will provide a better experience for both the organization and the candidate.
The probation period in Paraguay varies according to the level of an employee's skills and the qualifications needed for the job. The following table gives the probation period for workers:
Termination Of Service
Skuad’s EOR, with its unified employment platform, enables organizations to remain compliant with all the laws while carrying out actions such as termination. Moreover, Skuad can draft well-articulated labor contracts while remaining within the legal framework established by the laws of the land.
Contact us to learn more.
EOR Solution in Paraguay
While your headquarters team focuses on expanding your business, the EOR (Employer of records) takes care of hiring and onboarding the new employees as per the employment laws of Paraguay. The EOR is the new employer for the workforce you hire and is responsible for local regulations, taxes, payrolls, labor laws, HR, etc. By partnering with an EOR, you can hire a workforce remotely without setting up an entity in Paraguay. Skuad’s EOR helps with all employment needs to expand into Paraguay. Its unified employment platform enables seamless payroll management and ensures compliance with taxation and employment laws in Paraguay. Learn more about Skuad here.
Outsourcing Employment Through An Employer of Record
Many businesses are moving onto smarter options such as EORs and PEOs to hire employees when expanding business in a new country. Skuad’s EOR solution takes care of hiring, payroll, compliance, etc., on your behalf. All you need to do is decide whether you want to create your own team for hiring and managing employees or hire a third-party local entity that is already well-versed with the local laws. Working with an EOR like Skuad speeds up the process of hiring and facilitates the efficient management of employees remotely.
Types of Visas in Paraguay
All people entering Paraguay must have a visa unless they are citizens of a visa-exempt country such as the European Union (EU), some South American countries, and a few other countries. Such persons can stay in Paraguay for a maximum of 90 days as long as they possess a valid passport.
Visa on arrival is available for passport-holders of six countries, i.e., Australia, Canada, New Zealand, United States, Oman, and Qatar. The validity of the visa for citizens of Oman and Qatar is only 30 days. People from Australia, Canada, New Zealand, and the United States can obtain a visa only at Silvio Pettirossi International Airport. In contrast, those coming from Oman and Qatar can obtain the visa from any port.
The Ministry of Foreign Affairs issues visas to citizens from non-visa-exempt countries after getting complete details of the purpose of visit, the employment status of the individual, and the company. The visa is valid for 90 days and can be extended according to the needs of the individual.
Skuad provides all-round EOR solutions, including helping obtain visas for the employees of your company. Book a demo to learn more.
After obtaining the visa, the employee will need a work permit before they can start working in Paraguay. There are three types of work permits in Paraguay.
Things You Must Know To Set Up Payroll In Paraguay
For managing payroll in Paraguay, you will first need a registered entity in the country. A subsidiary is essential for handling tasks such as hiring employees and providing compensation and benefits.
There are four standard payroll options in Paraguay:
- Remote: When subsidiaries already have a parent company, the subsidiary can be added to the payroll of the existing parent company. But the rules and regulations for the subsidiary employees will be different from those that apply to the employees of the parent company.
- Internal: If you have a bigger budget, you can set up this type of payroll. It works well for larger subsidiaries having full HR staffing.
- Third-party: A third-party Paraguay payroll processing company is another alternative for businesses that would rather outsource these tasks. In this option, you do not need to worry about establishing a payroll. Instead, the third-party processing company will do this work for you in compliance with Paraguay’s tax and labor laws.
Getting aboard with Skuad’s EOR solutions will help you save time, money, and costs and allow you to focus on your business priorities. Learn more here.
Taxes In Paraguay
Incorporation: How to Set Up A Subsidiary In Paraguay
A few important factors need to be considered before setting up a subsidiary in Paraguay. First of all, consider the location at which you want to set up the subsidiary. Since subsidiary laws in Paraguay can vary from city to city, it’s important to decide on a good place that is favorable to foreign incorporations. You can try working with a third party, like an EOR, if you have doubts about the location.
Once the location has been decided, the next step is to decide the type of business activities you wish to conduct in Paraguay because the nature of work can determine the choice of entity.
There are different subsidiary structures permitted in Paraguay, like PLC (public limited liability company, PLLC (private limited liability company), S-PLLC (starter-private limited liability company). The restrictions, tax laws, and share capital investments vary according to the type of entity.
The most popular kind of subsidiary is LLC, especially for companies aiming to operate as a resident company. The following crucial steps are to be followed for setting up a subsidiary:
- Drafting by-laws of the company
- Obtaining incorporation documents
- Obtaining a certificate from the Chamber of Commerce/relevant government office in your country of origin
- Obtaining a certificate of the legitimacy of your head office in your country of origin
- Providing details from Board of Directors meetings, such as the intention to establish the company, assigning nominal capital to the company, establishing a fiscal address, designating the people who will be responsible for the management of the office, and giving power to the person responsible for the management of the office.
A Professional Employer Organization (PEO) is responsible for outsourcing all your HR functions to an external HR organization, such as payroll and employee benefits. In this arrangement, the outsourced organization becomes the professional employer of your existing workforce without providing any staff.
As the operating employer, you remain in control of assigning daily tasks and managing job functions. However, the degree of control the outsourced organization has over your employees depends on the service level agreement (SLA).
With the help of an EOR solutions company, the external HR organization only takes partial responsibility for the HR functions. However, in a PEO, the HR organization takes full responsibility for the HR functions in the organization.
In both cases, the operating employer retains control of all decision-making processes within the organization to the minutest of details. This exercise can be time-consuming, particularly when a company is expanding its operations.
Skuad's EOR solution is a good way to expand your business in Paraguay without setting up a separate entity. Our solutions help you to stay focused on your business and leave all business compliances, payroll processing and complete management work to us. Connect with Skuad to know more.
Book a demo here.
Skuad’s platform provides a single interface to onboard and manages employees and contractors. In addition, Skuad offers world-class global payroll, contractor payouts, benefits, taxes, and compliance solutions. Over the years, Skuad has built an impeccable reputation as a trusted player among remote employment organizations in the market. Be sure to contact and engage with Skuad today and give your business a much-needed boost for business expansion in Paraguay.