How to Register a Company in Paraguay: Company Formation
How to register a company in Paraguay? Paraguay is a very attractive country for investors and companies looking to expand to Latin America. It is a small country of around 6,8 million people, but with natural resources and a constantly growing market. It is not as popular as its neighboring countries but it has a very diverse market with activities like agriculture, mining, and energy.
The Itaipú dam, at the Paraná River, located in Paraguay, is the world’s largest generator of renewable energy. Agriculture is probably the most important industry in Paraguay, it is the world’s biggest exporter of organic sugar, the second-largest producer of Stevia, and the sixth-largest soy producer.
How to form a company in Paraguay?
In comparison to other countries in Latin America, incorporating a company in Paraguay can be a lot easier and faster. The Paraguayan government is very interested in attracting foreign investors and making the registration of companies as easy and fast as possible. However, it usually takes between 10 – 12 weeks to complete all required steps. It is necessary to count on a Paraguayan lawyer that is familiar with the procedures.
Identify and select the company structure
It is important to select the right type of company in Paraguay applicable to your business since the structure will determine how your business starts. This should be based on the nature of the business, objectives, and goals, but also on the number of shareholders and the amount of money that is going to be invested.
The most common types of companies in Paraguay are as follows:
Corporation (Sociedad Anónima or SA): Corporations are the most common type of companies in Paraguay. This type of company requires a minimum of 2 shareholders (at least one has to be Paraguayan). There is also no minimum capital for the incorporation but USD $10,000 is required if the company’s business is export-related.
Limited Liability Company or LLC (Sociedad de Responsabilidad Limitada or SRL): In a Limited Liability Company the investor’s contribution is protected. It requires a minimum of 2 shareholders, at least one must be from Paraguay and the corporation registration process takes from 10 to 12 weeks.
Once you identify the company structure you can start with the company’s registration process.
Check the availability of the name
As in many other countries, one of the first steps to registering a company in Paraguay is to check the availability of the desired name. This can be done at the Treasury Attorney Office’s online database. This database lists all the available names for organizations in Paraguay, to make sure your company name options are not taken, this will help to avoid any delays in your company incorporation.
Elaboration and signature of power of attorney
If your shareholders are not present in Paraguay, a Power of Attorney will be required that allows your legal representative to carry out the process locally. This Power of Attorney has to be signed by the corresponding party.
Also, consider that for foreign shareholders, additional documentation will be required.
All documentation that comes from abroad must be duly legalized and apostilled (if applicable), and these hard-copy documents must be sent to Paraguay. Finally, consider that documentation that is not in Spanish, will require translations to be accepted by the local agencies.
Although this step might sound cumbersome and time-consuming, it is a standard process to Register your company in Paraguay. Nevertheless, there is another way in which you can incorporate a company in Paraguay without completing this step first. At the end of this article, be sure to ask us how.
Draft and notarize the company’s bylaws
The drafting of the company bylaws has to be carried out and signed by a local lawyer. You must consider that the bylaws must include:
Legal representative name
Share capital information
Registered / Legal address
Extinction and liquidation details
The final articles of incorporation of your company must include the bylaws and all other required documents. Once these are completed, they have to be notarized and afterward submitted to the DGRP (Direction general de Registros Públicos), which is the Paraguayan Public registry, responsible for the approval and registration of the local companies.
At the bottom of this article, you can learn how Easyco can help.
Submit the documentation to the local centralized platform (SUACE)
The Paraguayan SUACE stands for ‘Sistema Unificado de Apertura y Cierre de Empresas’ and it is part of the Ministry of Industry and Commerce of Paraguay. This government agency is responsible for the registration of all companies since 2006. Here, it is necessary to submit all the documentation, SUACE will then assign an identification number to track the process.
Through the SUACE, you’ll be able to submit all required documents to the right authority in order to complete the registration of the company. Submit all documents to the SUACE for revision and approval. The platform will assign an identification number to track the progress through the website.
It is also necessary to submit the bylaws and all the other company’s formation documents to the Treasury Attorney Office or ‘Abogacía del Tesoro’ in Spanish. They will review all documentation and approve it. Additionally, they will issue the registration of the company and publication order.
Once your company is registered here, it officially exists.
Publication in the Paraguayan Official Gazette
Once the company is registered, the publication of an extract of the bylaws in the Official Gazette and any other wide-circulation newspaper is mandatory for at least 3 business days. The Official Gazette is the government publication in charge of communicating new actions and orders, as well as communicating the registration of new companies in the country.
Apply for a taxpayer ID at the SET
The Undersecretary of State for Taxation or Subsecretaría de Estado de Tributación (SET) is the authority in charge of the administration, regulation, and tax collection in Paraguay. Here you will apply for your company’s taxpayer identification number or RUC (Registro Único de Contribuyentes). The set of documents and information to be presented include:
Request if Tax ID via Form Nº 605
Access code via Form Nº 630
Act of declaration via Form Nº 625
Copy of Identification of the Legal Representative
Obtain your statutory company books
The books required by the Law and the Tax Regulations are, the Journal, General Ledger and Inventory. Additionally, Corporations must have: Attendance Book at Assemblies, Shares Registry Book, Obligations Registry Book, Act of Assemblies, Minutes of the Board of Directors.
Consider that these books are a requirement and must be signed by the Public Registry of Commerce.
Submit an application to the local Municipality for the verification and assessment of licenses and permits
In order for the business to start operating at an office or commerce, it is necessary to comply with all local regulations and get all the licenses and permits needed. The local municipality of each area is responsible for the surveillance and regulation of this. In case of not compliance, the company would have to pay a fine, or the Municipality can temporarily or permanently close the establishment.
Submit an application for registration at the Social Security Institute and to the Ministry of Justice and Labor
The Social Security Institute or Instituto de Prevensión Social (IPS) is the government agency in charge of providing security services in case of illness or accidents. All companies must submit an application in order to get this insurance for their staff.
It is also necessary to submit an application to the Ministry of Justice and Labor so the company is able to start hiring its staff. This authority regulates and controls the safety, justice, and good practices of businesses and companies in Paraguay. The application has to include information on all workers and their salaries.
This process can be done at the SAUCE.
Open a corporate bank account
Finally, It is important to choose the right bank according to the company’s needs. Each bank offers different types of accounts with many benefits depending on the agreement and goals of the company. It is recommended that the bank offers good pricing structures for international transactions.
Also, it is important to consider that some banks may have foreign transaction restrictions for companies that have foreign shareholders. It is crucial to take this into account as part of your company establishment strategy, as identifying a bank that has flexible policies will determine when your new company can start its operations.
Get Assistance from Easyco Experts!
Paraguay is the perfect country to register a business because it is a country that is constantly in expansion and growing. To make sure you register your company in Paraguay in the right way, you can get in touch with us, and our team of experts is going to make sure your registration complies with all Paraguayan laws.
AtEasyco, we make company formation in Paraguay easy; our team of corporate experts has vast experience helping companies and individuals register their business in Paraguay, with a proven track record of success across all of our services. Easyco aims to tackle the complex company formation processes across LATAM. We make business registration easy by providing a hassle-free online company registration experience. Start your company in Paraguay today!
Easyco also provides additional services to guarantee your company’s compliance, which include: