Paraguay
Panama
Detailed Comparison
| Factor | Paraguay | Panama |
|---|---|---|
| Residency Cost | $2,290-4,495 | $5,000-7,000+ |
| Investment Required | None | $200,000 |
| Timeline | 60-90 days | 3-6 months (2-yr provisional first) |
| Minimum Stay | Once per year | Varies by program |
| Path to Citizenship | 3 years | 5 years |
| Foreign Income Tax | 0% | 0% |
| Local Income Tax | 10% flat | Up to 25% progressive |
| Currency | Guaraní (USD accepted) | US Dollar |
| Work Permit | Included | Included with FNV |
| Monthly Living Cost | $1,500-2,500 | $3,500-5,000 |
Panama's 2021 Changes: What Happened?
Panama Friendly Nations Visa Is Harder Now
Since 2021, Panama requires proof of "genuine economic ties" to qualify:
- Employment: Job offer from Panama company with 10+ local employees
- Real Estate: $200,000 minimum property purchase
- Bank Deposit: $200,000 CD for 3+ years
Previously: Immediate permanent residency with minimal requirements.
Now: 2-year provisional residency first, then permanent.
Cost of Living Comparison
| Expense | Asunción | Panama City |
|---|---|---|
| 2BR Apartment (nice area) | $400-700 | $1,200-2,000 |
| Restaurant meal (mid-range) | $8-15 | $15-30 |
| Groceries (monthly) | $200-350 | $400-600 |
| Private health insurance | $150-300 | $200-400 |
| Domestic help | $300-400 | $500-700 |
| Monthly Total (comfortable) | $1,500-2,500 | $3,500-5,000 |
Panama City costs 2x+ Asunción for a similar lifestyle.
Lifestyle: Who Wins?
Paraguay Wins If You Want:
- ✓ Lower cost of living (50%+ cheaper)
- ✓ No investment required for residency
- ✓ Faster processing (60-90 days vs 3-6 months)
- ✓ Simpler process (fewer requirements)
- ✓ Faster citizenship path (3 vs 5 years)
- ✓ Lower local tax rates (10% vs 25%)
Panama Wins If You Want:
- • US Dollar economy (no currency risk)
- • Larger international expat community
- • Better international flight connections (hub)
- • More developed infrastructure
- • Familiar US chains and brands
- • English more widely spoken
Pros & Cons
Paraguay
Pros
- Lower cost ($2,290 vs $5,000+)
- No bank deposit required
- Faster processing (60-120 days)
- No minimum stay required
- Path to EU-strength passport
Cons
- Less developed infrastructure
- Smaller expat community
- Limited international flights
- Spanish required locally
🇵🇦 Panama
Pros
- US Dollar economy
- Larger expat community
- Better infrastructure
- More international flights
- Banking hub
Cons
- More expensive ($5,000+)
- Bank deposit required
- Longer processing time
- Stricter compliance
Our Verdict
Paraguay is the better choice for most applicants seeking a cost-effective residency with territorial taxation. It's cheaper, faster, and requires no bank deposit. Panama makes sense if you want a USD economy, larger expat community, or plan to actually live there.
Choose Paraguay for value and simplicity. Choose Panama for lifestyle and infrastructure.
Get Started with ParaguayFAQ
Which is cheaper: Paraguay or Panama?
Paraguay is significantly cheaper. Packages start at $2,290 vs Panama's $5,000+ for Friendly Nations. Panama also requires a bank deposit.
Which has better tax benefits?
Both have territorial tax systems with 0% foreign income tax. Paraguay has slightly lower local tax rates (10% vs Panama's 25% max).
Which is faster to obtain?
Paraguay is faster at 60-120 days. Panama's Friendly Nations takes 3-6 months, and their economic options can take longer.
Which is cheaper: Paraguay or Panama residency?
Paraguay is significantly cheaper. Total cost: $2,290-4,495 with no investment required. Panama: $5,000-7,000+ in fees PLUS $200,000 investment (real estate or bank deposit) required since 2021 reforms. Paraguay saves you $200,000+ upfront.
Which has a faster path to citizenship?
Paraguay: 3 years of permanent residency. Panama: 5 years of residency. Both require some physical presence. Paraguay's total timeline from application to citizenship can be as short as 5 years vs Panama's 7+ years.
Is Panama's Friendly Nations Visa still easy to get?
No. Since 2021, Panama requires proof of "genuine economic ties"—either employment with a local company (10+ Panamanian employees), $200,000 real estate purchase, or $200,000 bank deposit for 3 years. It's no longer the easy option it once was.
Which country has lower cost of living?
Paraguay is 50%+ cheaper. Monthly budget: Asunción $1,500-2,500 vs Panama City $3,500-5,000 for similar lifestyle. Rent alone: $400-700 in Asunción vs $1,200-2,000 in Panama City for a nice 2BR apartment.
Can I have residency in both Paraguay and Panama?
Yes. Many expats hold residency in multiple countries. Paraguay's minimal presence requirement (once per year) makes it easy to maintain alongside other residencies. This provides geographic diversification and backup options.