Skip to content 
VOICE-OVER
This podcast channel is about you. Successful international entrepreneurs, successful expats, successful investors, sponsored by HTJ.tax
DERREN JOSEPH
Fantastic! Good morning, Paul. It’s wonderful to see you and finally connect with you. Let’s delve into Paraguay and touch upon Uruguay as well, given your experience with both countries. For those who have just joined us, I’m Derren Joseph from HTJ.tax. Our discussions revolve around all things tax, aiming to demystify the occasionally perplexing realm of cross-border taxation. For those unfamiliar with our format, although we are qualified professionals, we are not your specific qualified professionals. Therefore, we cannot provide any advice. If you wish to make an informed decision regarding Paraguay, scheduling a strategy session and personally consulting with Paul is advisable. For those who are unfamiliar with our format, while we may be credentialed professionals, we are not your credentialed professionals, so we’re not giving any advice. If you want to make an informed decision about Paraguay, you probably need to book a strategy session and speak with Paul individually.
DERREN JOSEPH
What we will be talking about right now is to give you a flavor of what these jurisdictions have to offer and whether it’ll be of interest to you. But in order to make a decision, you would need to get advice that’s tailor-made to your particular situation. This is being live-streamed and is also being recorded. It’ll be available on over 20 online platforms, as well as on our YouTube channel and our website. Our website has over 1000 articles that are absolutely free of charge, talking all things about international tax. Our YouTube channel has well over 2000 videos doing the same. Without further ado, over to you, Paul. Paul, please introduce yourself.
PAUL KITTSON
Thanks, Derren. I appreciate being here today. My name is Paul Kittson, and I run a company called Plan B Paraguay with my Australian friend. In our company, we have a highly experienced lawyer who has been in this industry for over 15 years. My colleague and I embarked on this venture around 18 months ago when we decided to relocate to Paraguay, seeking a fresh start and an escape from Australia. We quickly realized that this country has immense potential and numerous benefits to offer individuals.
PAUL KITTSON
We strongly believe that Paraguay will become an increasingly attractive destination in the future, serving as a second home or a backup plan for many people.
DERREN JOSEPH
Fantastic. Thanks. And you mentioned when we first bounced a couple of emails. You spoke a bit about flag theory. Is that what led you toward Paraguay? If so, would you want to create context about Flag theory in general and how it worked for you?
PAUL KITTSON
Sure, absolutely. I’ll just give you a quick rundown of my background. About five years ago, I was an American citizen through my mom, and people kept telling me that I have to pay taxes to the IRS. And I’m like, that can’t be right. So, I looked into it, and much to my horror, although I was an American citizen and I’d spent basically my whole life in Australia, apparently, I had all these obligations to the IRS, and all these incredibly scary potential repercussions could happen if I weren’t compliant. This was a real wake-up call for me, which led me to stumble upon a content creator called the Nomad Capitalist, whom I’m sure many of you are familiar with, was talking about this concept called flag theory, which is basically, you know, we’re raised patriotically that the one country we are born in, regardless of what it is, can sort of provide almost all of our needs.
Whereas, what flag theory does is it provides an alternative way of looking at the world and looking at your citizenships and residencies. And it says, well, rather than putting all your eggs in one basket, what if you could have a collection of different relationships with countries, whether it’s citizenships, residencies, bank accounts, places where you actually live, and pick and choose the best the world has to offer in regards to how you want to live your life. In the end, unfortunately, I actually renounced my US citizenship, but it created that idea in my head that a citizenship isn’t just something you’re born with and you die with, and it stays the same. It can be like a forever something that’s influx where you’re always getting more citizenships or residencies and potentially renouncing them if they no longer fit you. And that’s what led me down this path of flag theory, which eventually led me to Paraguay.
DERREN JOSEPH
Fantastic. And for those who aren’t familiar with it, we do have an article about it on our website: HTJ.tax. So, essentially, it’s a term that Harry Schultz coined around the 1950s and 1960s. It was used to more or less describe the idea that you don’t have all your eggs in one basket and you live a diversified lifestyle. So, where it is that you are a citizen is not necessarily where your resident is, not necessarily where you operate your company, it’s not necessarily where you store your wealth, and it’s not necessarily where you enjoy yourself. They could be five different flags or five different jurisdictions. And since then, some people have expanded that to seven or eight theories.
DERREN JOSEPH
It is not dogmatic; it’s just a principle that you don’t put all your eggs in one basket. You live a properly diversified lifestyle. And for some of our clients, we deal with high-income earning clients. And for some of them, though perhaps not fortunately, but within their family, because they belong to certain groups that may have been persecuted in the past, they’ve seen situations where their parents or grandparents may have lost their wealth in parts of Europe and Southeast Asia. So, for them, it’s not a theory; it’s real.
DERREN JOSEPH
Through their family, they know the stories that teach them to have a healthy distrust of those in authority sometimes. And that may lead you to diversify yourself a bit. So, it’s interesting that that philosophy has led you to explore your options. I’m also curious because you mentioned in your story that, unfortunately, you must give up your US citizenship. Is that something you regret, or what are your thoughts about that?
PAUL KITTSON
Right, I don’t regret my decision to do it because, on the balance of benefits to drawbacks, I still feel it was the right decision to make. Unfortunately, obviously, because even though I didn’t really consider myself an American so much as my identity, you know, you’re giving something up. You’re giving up part of your identity. And also, for so long and still to this day, the American passport is something that so many people aspire to or incredibly value. And so, to walk away from that is a big decision. And I guess my only regret is that I wish things would have been easier for Americans living overseas. So, they’re not put in a situation where they can sometimes be forced to renounce.
DERREN JOSEPH
I understand completely what you mean. Of course, we’re not the biggest practice in the world, but we probably deal with four or five percent every month who are giving up their US passport or green card, and you know, it is a huge decision. But on balance, we also do pre-migration planning, and the queue of people trying to get in vs. people with a high enough net worth trying to get out is way higher than those getting out.
And you mentioned the Nomad Capitalist. It’s another firm that we follow quite closely. We are not partners; I’m not promoting them, but they put out some great content. They have put out a list of the cities in the world where the highest net-worth individuals are concentrated, and a surprising number of them are in the US. So, to me, it is interesting that there is this narrative, at least within social media, that it’s all about minimizing taxes. Whereas when you look at those people who really do have wealth, they find themselves concentrated in places that are high on tax. They are concentrated in the United States by far, like six or seven of the top ten cities in the world, as well as in Europe. Europe is not synonymous with low taxes. It probably has the highest tax for jurisdiction on planet Earth. Whereas, you would expect everyone to be fighting to live on some Caribbean Island or the Emirates. I mean, the Emirates has something going on, but still, people are queuing to get into the US and Australia. Australia takes half your money, but people are still fighting to get into it.
To your point, you know, when you look at the flow of wealth, Australia’s probably in the top three in the world in terms of high-net-worth people trying to get in. So, it is interesting.
When we speak with clients, and they’ve already made the decision by the time they get to us, and we are just helping them with the tax compliance piece, I usually give them two stories. I have moved to Singapore. I’m in Uruguay right now, but I moved to Singapore. Singapore was primarily my primary residence. I moved to Singapore in 2013, and Singapore’s pretty small, with zero things happening; there’s pretty boring. So, on weekends people go, and they do stuff elsewhere. One of the stories is about a bunch of guys who had gone hiking on a guy’s weekend in Malaysia next door. So, they left on Friday night and Saturday morning. And by Sunday evening, they had not returned. They missed their flight. So, their wives and girlfriends were a bit worried, and they went to the Malaysian authorities, who said, “Sorry, we can’t help you.” But you know how the story goes, there are a bunch of Americans in the group, so they went to the US embassy. Just like in a movie, a chopper goes in, and brings them safely back home, like one of those Netflix moments.
And the thing is that we don’t know of any other jurisdiction in the world that would go out of its way to help its citizens the way the United States does. In the French, they’ll pay a ransom. If you get kidnapped, the Brits will send you consular assistance. So, if you get trapped somewhere, someone from the British Embassy will say, “Sorry, we can’t help you.” But for those that would actually roll their sleeves up and get shit done, it’s going to be the US.
So, I gave them that story and another story:
My parents are from Trinidad, in the Caribbean, where I spent a lot of my life. Before it was a thing in the 90s, there was a coup attempt. A militant Islamic group took over the country for a period of time, and we have US citizens in our home, and the US embassy would call our house every day. And I can’t just say that the person is fine. They need to hear that citizen’s voice every single day. And we have multiple nationalities in the house, and that was the only embassy that contacted our home every day during that period of uncertainty. So, I give those two stories, but none of those two stories has been good enough to make anyone change their mind.
PAUL KITTSON
But…
DERREN JOSEPH
But you know, it is something to consider. Now the world is a pretty big place, and Australia is on the other side. So how is it that Paul looked at the world map and decided on Paraguay?
PAUL KITTSON
Yeah, so a little bit of my background, I’ve been a crypto investor for a long, long time…
DERREN JOSEPH
Right…
PAUL KITTSON
And the interesting thing is if you want to leave Australia, similar to the US, you have to basically do something like sort of an exit tax, where you have to pay out all the capital gains that you owe to the government before you leave so that you can sort of break ties with them. Now in early 2021, the crypto market had just crashed. And again, listening to advice online, I was like, okay, if you want to leave, now’s not a bad time because as you leave, the amount of capital gains you are cashing out will be smaller. So, I saw this as an opportunity to start investigating different options.
PAUL KITTSON
And originally, at the time, I was really moving toward Panama because there was something called the Friendly Nations Visa. It was very easy and accessible for certain nationalities to get permanent residency in Panama. But just as I was looking into it, they actually changed the rules, and then they made that a lot more difficult to obtain, which is basically how things are today. So, I paid for a consultation with a service probably similar to yours. And we went through all the different options I had available. One that came up as a potential option was Paraguay. And it wasn’t particularly common or popular, but it seemed to tick almost all the boxes that Panama did tick, but it still had the residency available.
So, basically, I looked into it. I was looking for good weather; I like Latin people, favorable taxes, and relatively safe; it ticked a lot of boxes for me. So, I investigated it looked like a good option. And then, with another friend, an Australian friend of mine, whom I met online, we both made plans to leave together. That was funny at that time, especially in my city, Melbourne, which was in a hard lockdown. So much so that we actually had to write a letter to our government requesting permission to leave Australia. So, part of my friendship with my friend was in a Facebook forum where Australians would ask for tips on what we could put in this letter to convince the Australian government to let us go.
PAUL KITTSON
Thankfully we got our permission slip to leave Australia, and then we started on our journey to Paraguay, where I ended up today.
DERREN JOSEPH
Wow!! I mean, that’s a wow idea. I mean, during the unfortunate health crisis, we saw a lot of governments taking steps that perhaps raised an eyebrow, and Australia did stand out. And I understand that there’ve been some cases of being in the process of being brought before the relevant courts because there are definitely some constitutional challenges. The idea that you can prevent a citizen from leaving or from reentering, it does sound preposterous. And you know, going back to what we discussed earlier about flag theory, it’s definitely a case study for the idea of diversifying your lifestyle.
So, the idea really is that when a government perhaps overreaches a bit, I’m not making excuses, perhaps there was a good reason, but when they do overreach, in our opinion, we at least have the option of saying, you know what, I’m going to take a timeout. It was good. If there was ever a story that would justify it. I think what you just explained definitely hits it.
So, you decided on Paraguay; what is the process for residency in Paraguay?
PAUL KITTSON
Yeah, generally. Yeah, that’s a great question. And I think that’s one of the strengths if you were to choose Paraguay as a solution. You basically need two or three documents. So, you’ll need a birth certificate with something called an apostille. Should I quickly go over what an apostille is for you?
DERREN JOSEPH
Please? Yes, go for it.
PAUL KITTSON
So how I like to explain it is you can imagine you have all these different governments around the world, they need some sort of stamp to show the government that the document you are submitting to them from your home government is acceptable. Acceptable and legitimate. So, it’s basically a stamp one government will put on their own documents so that it’s acceptable by other governments around the world. So anyway, you’ll need your birth certificate to have an apostille, or if your country doesn’t do an apostille, there’s a separate process for that which is very similar. You need a clean criminal record check which is again apostilled, and if you’ve been married or divorced, you also need that documentation with an apostille.
PAUL KITTSON
In terms of documentation, the only aspect where there might be some restrictions is related to certain passports that Paraguay does not readily grant a visa or allows visa-free entry. It is quite easy for individuals holding those passports to travel to Paraguay. However, for other passports, Paraguay requires a visa, and the process of obtaining it can be considerably more challenging. This difficulty lies not necessarily in obtaining residency but rather in assisting individuals with obtaining the Visa to enter Paraguay and initiate the residency process. Therefore, if there exists any significant barrier, it is in determining who can easily come and who might encounter difficulties, and it pertains to the visa requirements.
PAUL KITTSON
So those are the three documents, potentially three, that you need. Once you have those documents, if you are using a place like mine or another provider, as you usually will, we want scans of all your documents to ensure everything looks good. Once it does, you then come to Asuncion, the capital of Paraguay, where we’re based. We would like you to spend at least four days here. We usually only need one or two days to take you through to the government offices. We say four days just because it’s South America; if there’s a hiccup, it’s good to have a bit of wiggle room to solve any issues before you need to leave. Once people have submitted their documents, they have two options. After that, you can effectively just start living in Paraguay from then on. The government will give you something called a bridging visa or a Visa pre-carrier, which basically means you can stay in Paraguay until your documents are ready. And then obviously when your documents are ready you can start living here. The other option is people can just return to their home country, in which case, when the documents are prepared, we will send them to you via DHL Express. The average processing time from sitting, touching down, and starting your process to receiving your documents in your hand is about two to three months. And that’s really it in regards to the process.
DERREN JOSEPH
Super pretty easy. And does your team look after Paraguay only, or do you also cover other jurisdictions?
PAUL KITTSON
Well, I think for us, we really wanted to focus on Paraguay and do Paraguay really well before considering other jurisdictions eventually, but we’re purely focused on Paraguay.
DERREN JOSEPH
Understood.
PAUL KITTSON
Yeah. And I think it can give us a bit of an advantage over some people who might also recommend Paraguay, but really, they’re not here every day solving problems for people like we can.
DERREN JOSEPH
Okay, understood. And, just to provide some comparison. I’m actually next door; I’m in Uruguay, in Montevideo. So, the process for residency is quite similar, and I guess they’re neighbors, so it made sense. So, their apostille is, as Paul pointed out, a stamp or a system for mutual recognition of government documents that was established in 1961 during the apostille convention, which is part of one of the Hague conventions. And so, what that means is that I guess it helps other governments to know that what you’re presenting to them is real, right?
DERREN JOSEPH
So, Uruguay requires just, just like Paraguay apostille birth certificate, a police certificate for whichever jurisdiction you were last residing in. But what’s different in Uruguay is they require a certificate showing you’ve been vaccinated for all those childhood vaccines you would’ve got. And so, but it’s pretty similar, and you know, I just want to call out the vaccine part because the rest are straightforward. So, I’ve been living a chunk of my life in the UK where everything is computerized, and so you go print that out, and that did present some challenges here in Uruguay. They didn’t know what to do with it. So, if you come from a system where everything is automated like Singapore, where I’ve lived, or parts of the US or parts of Europe, it could be a bit challenging in terms of Uruguay versus Paraguay.
DERREN JOSEPH
But same thing, you know, you come in, and if it is that you come from a jurisdiction and you are a citizen of, let’s say, high-tier passport, you’re not going to have a problem. But if you have a lower-tier passport or a weaker passport, then you have to jump through some hoops to get a visa to get here in the first place. And I guess that could be a challenge. But anyway, so you, you have the vaccine stuff, you go to a relevant medical practitioner here in Montevideo, and they will have a look at it. If they like it, they sign off on it, then you go to the government office, get an appointment, and they will look at all your documents. It’s relatively straightforward.
DERREN JOSEPH
They give you, as you said, in Paraguay, a sort of temporary document that gives you permission until some months later when they actually get the residency card thing sorted out. So, similar in scope, from what I’m hearing and from what I understand. So, that’s quite interesting. Now what if someone wants to take that extra step? What about citizenship? How does that work? Paraguay citizenship?
PAUL KITTSON
Yeah, absolutely. So, we’ll go through the requirements of Paraguay citizenship. I think it is comparatively easy compared to other jurisdictions. So, there are a few requirements you have to meet. The first is that you have to live in Paraguay for three years, and during that time, you have to spend a minimum of six months living in Paraguay—six months per year. The second is you have to have a profession or a business. You can also put yourself as a retiree if that’s what you are. So, you have to have some sort of an official thing that you do in Paraguay, and the third is that you have to do a Spanish language and a Paraguayan culture test. You don’t have to be a hundred percent fluent, but you will need a basic level of Spanish skills.
PAUL KITTSON
Once you go through those, you can then can submit the documents, and then you can start the process of obtaining citizenship.
DERREN JOSEPH
All. right. So how many years would you have had to reside by that point?
PAUL KITTSON
Oh, apologies. Sorry, it’d be three years. Three years. And six months a year during those three years.
DERREN JOSEPH
Understood. And again, just a rough comparison, that’s kind of similar to Uruguay. So, Uruguay does allow applications after three years, but that’s with the family option. So that’s if you came with your family; if you didn’t come with your family, you have to wait five years, and then you can apply. Is there a distinction like that in Paraguay?
25m 49s
PAUL KITTSON
No, they, they just do it on a case-by-case basis. I think there are benefits; for example, when you become a citizen, it’s easier for you to get Visa to bring family members here, but not in terms of the actual citizenship process.
DERREN JOSEPH
Meanwhile, in Uruguay, there are two ways of obtaining residency. Firstly, there’s an investment option like most jurisdictions have. With the investment option, the residency requirement is not that strict. However, many people prefer to choose the normal option, which is relatively cheap. But with that, the residency requirements are pretty hefty. It’s not just a matter of at least 183 days or six months, but you also have a limited amount of time that you can spend out of the country, around 21 days or 30 days or whatever it is. It’s quite strict, as they basically want to see your commitment to living in Uruguay.
So, relatively speaking, I think it sounds like Paraguay is a bit more flexible and doesn’t sound as strict, which is a good thing. But here’s a tricky question. Let’s say you wanted to go all the way; you got your Spanish done, did your time, and paid your taxes, which could come later on. But does Paraguay allow dual citizenship?
PAUL KITTSON
So, if you take a look, sometimes in Paraguay, there is a difference between what is exactly written in the law and what tends to happen on the ground. According to the law, Paraguay only accepts dual citizenship with certain nationalities, usually Spain (Seeking reliable US tax planning services in Spain? Reach out to our experienced advisors) and other Latin countries. However, personally, I know dual citizens, such as American Paraguayans and German Paraguayans. So, I know it’s definitely possible, and I think it’s simply a “don’t ask, don’t tell” situation. They are unlikely to ask you about it because the wonderful thing about Paraguay is that they mainly focus on what’s happening within the country itself.
If you don’t tell them about your other citizenships, it’s not a problem. That’s my understanding. So, unofficially I’ve heard a lot of cases where it’s not a problem. For me personally, I’m going for citizenship, and I only have Australian citizenship right now. And I don’t foresee any issues with that.
DERREN JOSEPH
And so, you’re prepared to go all the way and give it up. Okay.
PAUL KITTSON
Oh no, no, no, no, no. Right now, I personally wouldn’t give up my Australian citizenship, as much as I love Paraguay. I don’t believe there would be any issues with the Paraguayan government regarding my Australian citizenship.
DERREN JOSEPH
Okay. Understood. And what about taxes? How do taxes work in Paraguay?
PAUL KITTSON
Yeah, so Paraguay is essentially a territorial tax system. And from my understanding, I’ll give you a brief overview without going into too much detail. We have Paraguayan accountants and international tax accountants that we can recommend for people to consult, like yourself. But basically, in Paraguay, it’s a territorial tax system. That means income, dividends, or any money earned outside of Paraguay is not taxed by the Paraguayan government. Only income earned within Paraguay is subject to taxation. The top tax rate in Paraguay is 10%. Paraguay actually has this interesting system in place, which I’ll briefly explain.
PAUL KITTSON
So, basically, every time you make a purchase in Paraguay, they will offer you a tax receipt called “factor,” which includes a 10% sales tax on everything you buy. If you agree to that, every one of those receipts becomes a tax credit that offsets any tax you’ll owe the government. So effectively, if you were to earn a hundred thousand dollars in Paraguay or its equivalent and then spend a hundred thousand dollars in Paraguay, the tax credits from those receipts would actually completely offset the tax that you would owe to the government. So, even if you were, as I mentioned earlier, there are benefits for individuals with overseas stocks or dividend companies. Still, it’s also quite useful for people in the local economy.
DERREN JOSEPH
That’s quite interesting. Again, when comparing it in my mind to Uruguay, that’s definitely more attractive. Uruguay does have a system where, for the first five or for the first ten years, depending on how you look at it, they will give you what is effectively a territorial tax. But afterward, you are in the deep end, and you will be taxed on your worldwide income because, officially, it’s not a territorial tax system.
PAUL KITTSON
Oh really?
DERREN JOSEPH
Yeah, like other jurisdictions, including Uruguay, you will be paying taxes officially on foreign income. If you are one of our clients considering Uruguay or Paraguay, you’re not really going there to work. You’re going there to enjoy the investment income that you have, money that is working for you elsewhere in the world. So, it would be nice to know that you will not be taxed elsewhere since you were already taxed wherever the money is working. But the thought that it may also be taxed, depending on tax treaties, foreign tax credits, and stuff like that, upon entry to where you reside is not a happy thought. So, in that way, I think Paraguay is definitely more attractive than Uruguay. So, that piece of information is interesting to know.
DERREN JOSEPH
You mentioned that when you were looking at the criteria, you looked at the map and you consulted with a firm, and Paraguay struck you as safe. I’ve not been to Paraguay, but I’ve traveled elsewhere within Latin America. I just spent working for a bit for a company in Mexico City. I’ve been to quite a few Caribbean islands because I’m a citizen of one of the Caribbean islands as well. And if there’s one thing with the Americas that I don’t associate with is safety, my sense is, and again I have not been to Paraguay, right?
So, my sense is if I’m looking for safety, I’m looking at Europe, certain European countries, I’m looking at certain parts of Asia, but definitely, I would’ve written off the Americas. My perception is that living in the Americas is all about enclaves and choosing the right enclaves. So, for example, here in Uruguay, if I were to live here, it would definitely not be in Montevideo; it would be in Punta Del Este with everybody else. Montevideo is like a typical Latin American city. If you have a residential property in a nice neighborhood, you’re going to have those electric fences at the top, you know, or you’re going to have this crazy barbed wire thing going on, or you’re going to have a security guard at the booth with not just a gun, but he’s going to have a bulletproof vest on like crazy fast and furious stuff, you know, and in Punta del Este the people don’t even have fences, and people, nice ceiling to floor like glass and it’s, it’s just perfect and pristine and beautiful like it is in other parts of Panama and Caribbean and whatever. Is Paraguay like that?
PAUL KITTSON
So usually, whenever you look at safety, I guess in the ratings charts of South America, Paraguay is either second behind Uruguay or third behind Uruguay and Chile in terms of safety. I thought I really liked your idea of an enclave, and it’s like anywhere in regards to those safe parts. But then also there’re parts where I’m not going to be walking around the shanty towns near the river in the middle of the night. That’s a hot spot in Paraguay, I’d say 95% of the expats live in this kind of new development in the middle of the city, and that’s very safe.
PAUL KITTSON
So, what I’ll do, I’ll give you a comparison of Paraguay and, say, Columbia in terms of my experience. So, in Paraguay, I’ll often have a phone conversation at midnight, just walking around the streets oblivious to my surroundings. That’s never been a problem. I wouldn’t do that in other South American countries. In Paraguay, I can have a meal outdoors, and I can put my phone on the table in front of me, and I’m not worried that someone’s going to run and grab it. I potentially wouldn’t do that in Columbia or Brazil. And also, in Paraguay, I can be in a taxi just talking on my phone; I don’t think a motorcycle’s going to come to grab it and pull it out of my hand.
PAUL KITTSON
So, in that regard, Paraguay is indeed much safer. However, you’re right; it’s not on the same level as countries like Japan or Switzerland. One of the advantages here is the low cost of living, but it also means that there are people living in poverty, which can contribute to higher overall crime rates. Despite this, Paraguayans are generally quiet, relaxed, nonviolent people. They don’t have a culture of violence. So, in terms of options in South America, I would say it’s very safe. However, it may not be as safe compared to certain parts of the US. It’s important to exercise caution and be mindful of how you conduct yourself. So, in that regard, Paraguay is indeed much safer. However, you’re right; it’s not on the same level as countries like Japan or Switzerland. One of the advantages here is the low cost of living, but it also means that there are people living in poverty, which can contribute to higher overall crime rates. Despite this, Paraguayans are generally quiet, relaxed, nonviolent people. They don’t have a culture of violence. So, in terms of options in South America, I would say it’s very safe. However, it may not be as safe compared to certain parts of the US. It’s important to exercise caution and be mindful of how you conduct yourself.
DERREN JOSEPH
Understood. And what about other issues of infrastructure? Like in the hotel that I’m in, I’m in the middle of Montevideo, in a nice five-star hotel. But when I booked into my hotel, the Wi-Fi speed was so slow, and I needed to use Zoom. This won’t work for Zoom, and we had to scramble to look for alternatives because, generally speaking, Wi-Fi was slower. Uruguay, or at least Monte Video, was known for potable drinking water. But they’ve been recently having some issues with that. So, you can’t drink water from the taps like you would in Europe or mostly in the US.
What about all those power supplies in some parts of Uruguay? I’ve been driving for hours around Uruguay. I noticed in some places that people have these big water tanks on top of their houses in their backyard. I guess it means that their water supply may not be reliable, so they need backups. What is it like in Paraguay? Is, is the government infrastructure decent? Can you work with it, or do you need to supplement it?
PAUL KITTSON
So, there are a few things you brought up. So, a few good points there. We’ll cover the basic ones. Internet speeds are very reliable in the capital. My colleague can get 300 megabytes per second download, more than enough to do any sort of online business. There are blackouts occasionally. In my experience, we probably have blackouts maybe once every three months, usually after a storm; a lot of apartment complexes like mine will have their own generator that will kick in. I really haven’t been without power for longer than about five or six hours at most. But it does occasionally happen.
Now you can drink the water out the taps here, but I wouldn’t do it every day. Occasionally, if I run out of bottled water, I’ll, I’ll drink the water out of the taps. Everyone says that it’s safe, but this is a South American government, you know, so you take everything with a grain of salt more broadly in terms of government infrastructure, public amenities, that sort of thing.
Like I said, the government doesn’t collect much taxes here. And I feel as if the citizens of Paraguay have an interesting relationship with the government. It’s kind of like, tell you what, if you leave us alone, we’ll leave you alone. They don’t expect much from the government.
PAUL KITTSON
The government doesn’t really enforce many rules, regulations, or restrictions on people here. However, on the flip side, the government doesn’t provide much in return. This is great in terms of personal freedom, perhaps making it one of the freest places to live your everyday life. However, it also means that the roads here aren’t that great. They’re okay, but there are more potholes, which can be a little haphazard in public places, including parks. Again, the parks and all that are nice, but they may not be as beautiful as parks in the States or even Uruguay. So that’s the trade-off you have to make if it’s something important to you. What I’ve noticed in Paris is that private spaces can be quite nice, almost like a first-world country in Europe or America, but public spaces sometimes have a bit of a third-world feel to them.
PAUL KITTSON
So, I would say that, in regards to that, that’s a weakness of Paraguay—the public amenities.
DERREN JOSEPH
But that’s a fair point that you raise; I mean, that is a trade-off. Nowhere in the world is perfect. It simply doesn’t exist. This is why Flag theory became a thing because there’s give and take. So, in return for personal freedom, you want a government that doesn’t get involved in your life; you have a government that literally does not get involved in your life!
PAUL KITTSON
Exactly, right?
DERREN JOSEPH
If you need to get certain things done, you need to make your own provisions for healthcare. You need to make your own provisions for personal security by paying for the right neighborhood. You’re going to have certain backups and provisions in place. And the trade-off is if you really want a government that looks after you, be prepared to pay a lot in taxes, and the government will get involved in your daily life. So, it makes sense. It is a trade-off. And you know, since you’ve been on both sides of the spectrum. I mean, Australia is pretty f full-on, right? They take half your money, but they look after you.
And Paraguay just leaves you alone. So, what’s that transition been like for you?
PAUL KITTSON
How was it for me? I guess we need a little bit of context. I came from an almost 18-month lockdown in Melbourne, where you couldn’t leave your house for more than two hours a day. You couldn’t walk out on the street or see people having fun at bars. And it’s completely the opposite here. Even the little things, like walking down the street and having a beer if you want, are allowed. You know, it feels like Australia is kind of like the obsessive parent that tries to manage every part of your life to look after you and make sure you’re well, but it can be oppressive in many ways.
So, I felt free in a way that I hadn’t felt in a long time. That said, it really depends on whether you are the type of person who needs constant looking after and appreciates all the help. In that case, a place like Australia is great because they maintain a comfortable minimum for you. But if you feel like you’re hitting your head against the ceiling, if the idea of paying 50% or 60% in taxes doesn’t sound appealing because you fall into that income bracket or potentially could, then a place like Paraguay is amazing. Another interesting dichotomy about South America is that sometimes it can be frustrating here because the services, work ethic, or level of organization may not be what we’re accustomed to in the West.
But it presents you with such an opportunity as a business person to come and work and create your own business in an economy like this. Naturally, by doing things like being reliable, communicating on time, and following through with what you say, you are 50% or even a hundred percent ahead of the competition. It gives you such an advantage when you’re in a more informal economy. So, I discussed several different points, but hopefully, that addresses your question more effectively.
DERREN JOSEPH
To be fair, that’s a fantastic point, and that’s actually what brought me to Uruguay. Many of my clients were asking me about Uruguay and engaging in conversations about it. I spoke to some people in the investment migration space, and they mentioned that Uruguay is different from the average Latin American jurisdiction. So, I decided to take a look. I reached out to numerous lawyers, not just in your firm, but also considering visiting Chile. However, nobody replied, even though I contacted them through their websites. I am willing to pay for their time and not looking for freebies because I understand the value of time. I’m even willing to do a paid consultation.
When I saw this lack of response, I thought, “Hey, there’s an opportunity here.” So, since I’ve been here, I’ve been engaging in conversations with many lawyers. Whenever I arrive in a new jurisdiction, I make it a point to talk to as many lawyers as possible because that’s how I get a better understanding of the local landscape. And you’re absolutely right; within the cultural context, things may be a bit more laid back. However, when someone like me, who is more proactive than passive, enters the picture, you can see so many opportunities. But then you also understand why there may be a laid-back approach because there are numerous restrictions and bureaucratic hurdles. Coming from an Anglo-Saxon common law jurisdiction, the process of forming a company and handling compliance and tax filings is much easier than in some of these jurisdictions.
You have to get a license; the company formation process is painful, and the ongoing compliance burden is mindless and mind-blowing. How have you adjusted to that part of doing business in Paraguay?
PAUL KITTSON
Yeah, so it can be a lesson in patience sometimes. There’s no point in getting upset about things that you can’t change. In Paraguay, what I always try to do is have more than one provider for anything and always have a backup option. I let the free market make the decision. If someone is taking too long, then I go with another person. It’s really about ensuring you have options because if your entire process relies on one person to get it done, you’re in a precarious situation in a place like this because they don’t always meet the timelines you would prefer.
DERREN JOSEPH
Okay, wonderful. And if someone wants to follow, follow this up; they want to find out more about Paraguay and its pros and cons and see if it’s the right fit for them. How can they find you, Paul?
PAUL KITTSON
It’s best if you follow us on our Twitter account: Plan B Paraguay. We post daily updates with information about the country, allowing people to learn more about it and determine if it’s a good fit for them. Additionally, on our Twitter profile, you can find our contact details. From there, interested individuals can book a call with me, and we can discuss whether Paraguay would be a suitable option for them.
DERREN JOSEPH
Okay, so that’s Paul’s plan B Paraguay. Just go to Twitter and look for “Plan B Paraguay,” and you’ll be in touch with Paul and his team. Paul, thank you so much for your time. Thanks for sharing your experience and your advice. Any parting words, any final thoughts?
PAUL KITTSON
It’s exactly as you said about Flag Theory, Derren. Everyone has different requirements and preferences. So, it’s important to learn as much as you can, continue your research, and not give up on finding a place that truly aligns with what you’re looking for. Keep pushing and exploring until you find that perfect fit.
DERREN JOSEPH
Wonderful. Thank you very much. We appreciate your time, and we’ll see you next time. Bye-bye.
PAUL KITTSON
Thanks a lot, Derren.
VOICE-OVER
So, if you’re a six, seven, or eight-figure investor, entrepreneur, or business owner who needs a tailor-made solution from a qualified team of professionals, we can help you achieve the international lifestyle, the freedom, and even the tax savings you’re looking for. Visit us at HTJ.tax tax and live that international life.
