The Rise of Foreigners in Paraguay: What Real Estate Solutions Are They Seeking?

Paraguay is undergoing a period of transformation that few would have anticipated just a decade ago. On Asunción's main thoroughfares, such as Villa Morra and the corporate district, foreign accents have become a familiar part of the urban landscape. What was once an occasional phenomenon is now palpable evidence of a country that is quietly positioning itself as one of the most attractive destinations in the region, not only for investment, but also for living, raising a family, or enjoying a quieter life with greater freedom.

This surge in foreigners choosing Paraguay as their new home is not an isolated phenomenon, but rather the direct consequence of global factors that are reshaping migration flows and investment decisions. In a world marked by political uncertainty, economic instability, and increasing restrictions on individual freedoms, Paraguay presents itself as a safe, accessible, and forward-looking alternative. This new dynamic is not only boosting the local economy but is also redefining real estate market trends, adapting to a more international and demanding demand.

The international context plays a decisive role in this trend. The European region is experiencing a complex geopolitical and economic scenario. The aftermath of the war in Ukraine, the escalating inflation that has driven up the cost of living in countries like Germany, Spain, and France, and increasing tax regulations restricting capital mobility have put the financial security of families and large estates to the test. At the same time, Latin America is facing its own turbulence: the prolonged economic and political crisis in Argentina, the high tax burden in Colombia and Peru, and recent regulatory changes in Chile and Mexico have raised alarm bells for those seeking to protect their assets and find more stable environments for their life and investment projects.

One of the groups that has contributed the most to this change is digital nomads. Following the COVID-19 pandemic, Asunción established itself as an emerging destination for those seeking a peaceful and affordable place to work remotely. The city has even risen to number 37 on the list of top destinations for digital nomads according to Nomads.com, reaching positions within the top 10 at certain times last year. These new residents, mostly young professionals, initially opt for temporary rentals on platforms like Airbnb or Booking.com, locating themselves near the corporate hub to explore the city. Over time, many of them choose to establish a permanent base in Paraguay, attracted by the ease of obtaining tax residency and the possibility of enjoying a safe, low-cost environment. Some prefer to continue traveling but maintain their Paraguayan residency due to the tax benefits it entails. Others decide to settle permanently, accessing traditional rentals or purchasing apartments in the most desirable areas of Asunción.

The "Plan B" phenomenon has also taken on particular relevance. More and more Europeans, North Americans, Argentines, Venezuelans, and even Bolivians are finding in Paraguay a refuge from the instability of their countries of origin. This concept, which refers to the search for a second home or citizenship as a contingency plan, has translated into an increase in the purchase of apartments, houses in gated communities, and even rural areas far from large cities. For many of these foreigners, Paraguay represents not only a retirement or investment destination, but also a space where individual and economic freedoms remain intact. Encarnación, with its proximity to European colonies and its orderly urban expansion, has become one of the most sought-after destinations for this type of foreigner.

But not everyone arrives with the idea of a "contingency plan." An increasing number of people are making the conscious decision to move permanently to Paraguay, attracted by the possibility of starting a family in a safe environment with strong cultural roots. According to data from the Directorate of Immigration, in the last year alone, 28,464 residency permits were issued to foreign citizens, of which more than 6,600 were permanent, representing a 6% increase compared to the previous year. Brazilians, Argentines, and Germans lead these statistics, consolidating a migratory flow that continues to grow.

This demographic shift directly impacts real estate market trends. The solutions these new residents seek vary depending on their profile and goals. On the one hand, there are those who prioritize security and community living, opting for homes in gated communities or private condominiums with family amenities and green areas. On the other, there are those who seek the practicality of urban living, purchasing apartments in areas such as Recoleta, Villa Morra, Las Lomas, or Santísima Trinidad, with easy access to international schools, shopping centers, and first-class services.

Investors, for their part, have found in Paraguay a market with profitability margins that are difficult to match in other countries in the region. Properties still have low entry prices compared to cities like Buenos Aires or São Paulo, allowing for net returns of between 5% and 8% annually. The growing demand for rentals, both in the residential and corporate sectors, offers unique opportunities, especially in high-value areas such as Asunción, Encarnación, and Ciudad del Este.

The country's economic and fiscal stability, coupled with a highly competitive tax system with a 10% Corporate Income Tax (CIT) and a 10% VAT, make Paraguay an ideal destination for both those seeking asset security and those seeking long-term profitability. Furthermore, the ease of acquiring property without restrictions, coupled with legal security surrounding private property, has been a key factor in attracting foreign investment.

Meanwhile, the local real estate market is adapting to this new reality. Short-term rental projects, driven by platforms like Airbnb, are gaining ground in tourist and corporate areas. At the same time, demand for commercial and office space in strategic areas is growing, accompanying the expansion of new business hubs. Mixed-use developments, which integrate residential, commercial, and corporate spaces, are increasingly attractive to a public seeking comprehensive and modern solutions.

The rise of foreigners in Paraguay is, without a doubt, a phenomenon that is just beginning. The opportunities the country offers, both for living and investing, position it as a new center of attraction in South America. And in this context, the real estate market is emerging as one of the major beneficiaries of this change, with growth potential that promises to continue in the coming years.