Employer Of Record In Paraguay

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:

Entitlements Explanations
Statutory Working Hours 48 hrs (for work done in a day) per week and 42 hrs (for work done at night) per week.
Overtime Eligibility Overtime is limited to 57 hours a week and 3 hours a day.
  • If the overtime work is done during the night, the standard pay rate is 100% above regular wages.
  • For overtime work done on public holidays, the standard pay rate is 100% above regular wages.
  • People working on a rest day get a compensatory rest day.
Paid Public Holidays Employees in Paraguay are eligible for paid public holidays. They are:
  • New Year's Day (1 January
  • Heroes’ Day (1 March)
  • Holy Thursday (1 April)
  • Good Friday (2 April)
  • Labor Day/May Day (1 May)
  • Independence Day (14 May)
  • Chaco Peace Day (12 June)
  • Founding of Asuncion (15 August)
  • Boquerón Battle Victory Day (29 September)
  • Virgin of Caacupe Day (8 December)
  • Christmas Day (25 December 2021)
Holiday Pay An employee’s annual leave allowance depends on the duration for which they have been employed:
  • 12 paid holidays after 1 year of employment and up to 5 years.
  • 18 paid holidays after 5 years of employment and up to 10 years.
  • 18 paid holidays after 5 years of employment and up to 10 years.
Medical Leave
  • Employees who have made a minimum of four weeks of social security contributions are entitled to 50% of their regular pay by social security (IPS). The employer pays the other 50%.
  • This duration can be increased for another 24 weeks in exceptional cases.
  • Employees get three days of paid emergency leave for the death of an immediate family member.
Maternity leave
  • A female employee is entitled to 18 weeks of paid maternity leave, provided she submits a medical certificate.
  • Additional six weeks are provided in case of illness during pregnancy or delivery.
  • This leave is paid at a rate of 100% of gross salary by the IPS.
  • In case of adoption, female employees receive 12 weeks leave for children above six months of age.
Paternity leave A male employee is entitled to 2 weeks of leave paid out via the IPS at 100% of the gross salary.

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.

Probation Period

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:

Type of Employee Probation Period
Unqualified Employee 30 days
Qualified Employee 60 days
Highly Qualified Employee There is no specific legal provision for the duration, but it is presumed to be six months.

Termination Of Service

Topics Explanation
Notice For Termination Of Employment
  • A fixed-term contract of employment can be terminated by a mutual agreement between the employee and the employer.
  • Termination is justified in situations like theft, violence, damage to employer property due to negligence, immoral acts at work, threats to employer and co-workers, unprofessionalism, failure to follow the rules and policies of the company, leaking out confidential information, failure in following safety standards, and decrease in work productivity.
  • The employer and employee can terminate employment during the probation period, which varies according to the employee’s skill level and qualifications required for the job.

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 unfied 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.

Visa Category Explanation
Tourist Visa Paraguay tourist visas are issued for:
  • Tourist travel
  • Visiting family and friends
  • Sightseeing
  • Family emergencies
The following factors determine eligibility for getting a tourist visa in Paraguay:
  • Be a genuine traveler: You must have a valid and good intention behind traveling to the country.
  • Eligible to bear all expenses: You must possess sufficient finances to support yourself and any dependents throughout the stay.
  • Reasons to return: You must have strong ties in your home country to ensure that you will return after your stay.
  • Be in good health and of good character.
Documents needed for a tourist visa in Paraguay are:
  • Passport
  • Photo
  • Air ticket
  • Police Clearance Certificate (PCC)
  • Old Passport
  • Bank Statement
  • Visa Application Form
Business Visa Paraguay business visas are issued for:
  • Business Travel
  • Sales Meetings
  • Providing services
  • Conference/Seminars
The following factors determine eligibility for getting a business visa in Paraguay:
  • Be a genuine traveler: You must have a valid and good intention behind traveling to the country.
  • Eligible to bear all expenses: You must possess sufficient finances to support yourself and any dependents throughout the stay.
  • Reasons to return: You must have strong ties in your home country to ensure that you will return after your stay.
  • Be of good character.
  • Be in good health: The applicant’s good health must be verified by a registered medical practitioner.
In addition, you must possess a genuine invitation from a company located in Paraguay with whom you will be doing business. Documents needed for a business visa in Paraguay are:
  • Passport
  • Photo
  • Air Ticket
  • Police Clearance Certificate (PCC)
  • Old Passport
  • Bank Statement
  • Visa Application Form
  • Covering letter from company
  • Income tax returns
  • Hotel Voucher
  • Invitation letter from company
  • Company registration
Official or Diplomatic Visa

Paraguay official or diplomatic visas are issued for Official or Diplomatic government travel.

The following factors determine eligibility for getting an official/diplomatic visa in Paraguay:

  • Be a genuine traveler: You must have a valid and good intention behind traveling to the country.
  • Eligible to bear all expenses: You must possess sufficient finances to support yourself and any dependents throughout the stay.
  • Reasons to return: You must have strong ties in your home country to ensure that you will return after your stay.
  • Be of good character: You must have a good track record without any pending legal cases.
  • Be in good health: You must meet the minimum health requirements as dictated by the authorities.
Documents needed for an official or diplomatic visa in Paraguay are:
  • Passport
  • Photo
  • Air Ticket
  • Police Clearance Certificate (PCC)
  • Old Passport
  • Bank Statement
  • Visa Application Form

Skuad provides all-round EOR solutions, including helping obtain visas for the employees of your company. Book a demo to learn more

Work Permits

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.

Work Permit Category Explanation
Provisional work permit Valid for six months and can be extended for another six months.
Temporary work permit Valid for one year, with the option to apply annually for six years.
Permanent work permit Lifetime validity and allows the applicant to work in Paraguay indefinitely.
Work permit Explanation
Can Skuad Sponsor Work Permit in Singapore? Yes
Processing time 1 week
Work permit process

Step 1: Upon arrival in Paraguay, the employee collects all the necessary documents, opens a bank account, and undergoes a medical exam.

Step 2: The employee submits a work permit application to the Consulate General Paraguay.

Step 3: The application gets approved by the Consulate General.

Step 4: Employee gets the work permit.

Work Permit Validity Five years
When Can Employees Travel to Paraguay? After getting their visa, the employee can travel to Paraguay and complete obtaining a work permit after arrival.
Switch Resident Visa to Work Permit? No

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

Tax Explanation
Income Tax
Type of Individual Tax Rate (%)
Individual residents living in Paraguay


For annual income equal to or higher than 36 monthly minimum salaries (approximately 13,000 United States Dollars [USD] annually).

Individuals living abroad 20% over the net income of 50% of the perceived income (the price of the services), which results in an effective tax rate of 10%.
Tax Returns Yes
Financial Year End Date December 31
Tax Documents Not applicable
Corporate Tax 10%
Withholding Tax (For Non-Residents): 10%
Payroll Tax

16.5% Social Security

16.5% Total employment cost


9% Social Security

9% Total employment cost

Sales Tax 10%
Employers Social Security and statutory contributions

Employers’ contribution- 16.5%

Employee contribution- 9%

Public Pension Paraguay has a pension scheme for all citizens.
Medical Insurance Paraguay provides a public health insurance scheme to every self-employed worker or employee 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.

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