Comparison Guide
Paraguay vs. Spain: where is it best to invest or live?
Two destinations with almost opposite logic: Paraguay as a low-tax base close to South America, Spain as a gateway to the European Union with considerably higher taxes. We compare taxes, company formation and residency — including a key recent change: Spain eliminated the Golden Visa in 2025.
Contents
The Spanish Golden Visa was eliminated
The alternatives that remain in force are different: the digital nomad visa, the non-lucrative visa, the entrepreneur or highly qualified professional visa, and family reunification. We cover these in the residency section below.
Tax burden
The difference between the two countries is significant. Paraguay applies a general 10% rate on VAT, corporate income and personal income. Spain has a much higher system, typical of a European economy with a strong welfare state.
| Tax | Paraguay | Spain |
|---|---|---|
| VAT | 10% | 21% general (10% and 4% in reduced categories) |
| Corporate tax | 10% (IRE) | 25% general — 19-21% for microenterprises' first bracket, 15% for newly-created companies in their first 2 profitable fiscal years |
| Personal income tax (IRPF) | 10% (IRP) | Progressive, up to 47% in the general scale (can reach 54% depending on the autonomous community) |
Spanish IRPF is made up of a state bracket and a regional bracket that varies by autonomous community of residence — that's why the real maximum rate varies so much between regions. There's also the special regime for relocated workers ("Beckham Law"), which allows a flat 24% rate on the first €600,000 of employment income for the first 6 years for those who qualify — designed mainly for employees or digital nomads relocating to Spain, not for owners of local companies in general.
Company formation
In both countries, a foreign individual or company can hold 100% of a local company, with no need for a local partner.
| Paraguay | Spain | |
|---|---|---|
| Common structures | EAS, SRL, SA | Sociedad Limitada (S.L.), Sociedad Anónima (S.A.) |
| 100% foreign ownership | Yes | Yes |
| Minimum capital | No relevant minimum for EAS | €1 for S.L. (2022 reform, though a higher capital is usually recommended in practice); €60,000 for S.A. |
| Estimated timeline | 2–4 weeks | Generally a few weeks, depending on notarial and registry procedures |
The Spanish S.L. is by far the structure most used by SMEs and self-employed people scaling up to a company — functionally equivalent to the SRL or the Paraguayan EAS. The administrative and tax burden of keeping an active company in Spain is considerably higher than in Paraguay, something to keep in mind beyond the formation process itself.
Current residency options in Spain (post Golden Visa)
- Non-lucrative visa: for those who can prove sufficient passive income without needing to work in Spain. In 2026 the reference amount for the main applicant is around €28,800 per year (400% of the IPREM), plus an additional amount per dependent family member. It doesn't allow working in Spain and requires a minimum stay of 183 days per year to maintain tax residency.
- Digital nomad visa: for those who work remotely for a foreign company or as a freelancer with clients outside Spain. Requires minimum income of approximately 200% of the minimum interprofessional wage (around €2,442 per month in 2026) and some prior experience or education. Getting this visa doesn't automatically grant the Beckham Law tax regime — they're independent procedures that must be applied for separately.
- Entrepreneur / highly qualified professional visa: for innovative business projects or profiles with specific education and experience, within the framework of the Startup Law.
Compared to Paraguay, Spain requires proving income or a specific economic activity for most of its immigration pathways — there's no longer a simple passive-investment residency route like the one that existed with the Golden Visa.
Comparison table
| Paraguay | Spain | |
|---|---|---|
| Simplicity of the tax system | High — single 10% rate | Low — progressive system with multiple brackets and regimes |
| General tax level | Low | High (typical of a European welfare economy) |
| Residency through passive investment | Yes — Paraguay Investor Pass | No — the Golden Visa was eliminated in 2025 |
| Geographic/trade access | MERCOSUR, South America | European Union, Schengen area |
| Distinctive advantage | Low tax burden and agile procedures | Access to the European market and citizenship |
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Get a free assessmentFrequently asked questions
Can you still get the Spanish Golden Visa by buying a property?
No. Spain eliminated the Golden Visa on April 3, 2025 through Organic Law 1/2025. Those who already had it keep their permit and can renew it, but it can no longer be requested from scratch.
What's the closest alternative to the Golden Visa in Spain today?
There isn't a directly equivalent passive-investment route. The current options (non-lucrative visa, digital nomad, entrepreneur) require proving income, a specific economic activity or a project — not simply a real estate investment.
Which of the two countries has lower taxes?
Paraguay, by far: a single 10% rate on VAT, corporate income and personal income, versus a Spanish system with 21% VAT, 25% corporate tax and an IRPF that can reach 47-54% in the top bracket.
Does the Beckham Law help if I want to open my own company in Spain?
The Beckham Law is designed mainly for employees or digital nomads relocating to Spain with employment income, not for owners of companies who invoice through their own Spanish entity. Worth checking with a tax advisor whether your specific case qualifies.
Does this guide replace advice from a local accountant or lawyer?
No. It's a general starting point. Exact amounts, tax brackets and immigration requirements change over time in both countries, so any specific decision should be validated with a professional in the relevant country.
This guide is for general informational purposes only and does not constitute financial, legal or tax advice. Tax and immigration rates and amounts change over time in both countries — always verify current information with an advisor before making a decision. Sources consulted: Spain's Tax Agency, the text of Organic Law 1/2025 on the elimination of the Golden Visa, and specialized Spanish immigration sources, reviewed in July 2026.