PARAGUAY: OPEN FOR BUSINESS

Paraguay does not have an offshore banking industry and it is not generally attractive for non-resident foreigners to open bank accounts in Paraguay. However there are two reasons why you might wish to do so:

1.  When applying for official residence, it is a requirement (unless you own property) that you deposit US$ 5000 or equivalent in an account in your name at a Paraguayan bank.

2.  If you want to hold Guarani (PYG) as an investment, you will need a bank account in Paraguay, as banks in other countries do not offer accounts in Paraguayan currency.

In either of these cases, it is possible for a foreigner to open an account in a Paraguayan bank, but it is difficult. The main obstacle is guidance sent out a few years ago by the Paraguayan Central Bank which specifically prohibits the local banks from opening accounts for persons who do not have a Paraguayan cedula.

The only bank we have found that has a solution to this problem is the Banco Nacional de Fomento, a state-owned bank. They will open a type of savings account called a Caja de Ahorro for non-residents. To open the account you will need to show up in person at their head office equipped with a bank reference and a copy of your passport. You will need to speak some Spanish, and you will need to supply a local address in Paraguay. It is not possible to open accounts in advance by correspondence.

The Paraguayan currency, the Guarani, has long been the butt of jokes. But so far this year it has appreciated more than 25% against the dollar over the past year. Paraguay is a dual currency country. Day-to-day business in Paraguay is in Guaranies, but most higher-priced items are tagged in US dollars. ATM machines pay out both currencies.

As somebody told me last month, in Paraguay “everything is virgin.” That is the reason for investing in Paraguay right now. There is lots of opportunity in all areas. But our prediction is that for the next decade or so, natural resources will be the driving force in the economy.

How to invest in Paraguay? Coming soon. Add this site to your RSS feed to receive regular updates as we upload new material.