Banks and Bank Accounts in Paraguay: Guide 2024

Foreigners are often drawn to Paraguay for its enticing tax regime (no tax on worldwide income) and low cost of living, making it an attractive destination for those considering a move or dual residency, with the added benefit of a diverse banking sector. 

Setting up a bank account in Paraguay presents a unique opportunity for individuals seeking a distinctive Latin American experience. Despite being a landlocked country in South America with a relatively modest banking sector compared to its neighbors, a closer look reveals that the Paraguayan financial system has much to offer expat investors and businesses. The country has not positioned itself as an offshore banking center, a notable advantage in an era of increasing sanctions and international financial blacklists. This distinction reflects positively on the country's financial stability and regulatory framework.

Banking in Paraguay

Opening a bank account in Paraguay is a strategic move for those aiming to efficiently manage their finances within the country, catering to various groups such as digital nomads, freelancers, retirees, and individuals with stable employment. 

As of now, Paraguay's financial system comprises 390 institutions, including 17 licensed banks, collectively holding assets equivalent to 91% of the country's GDP, with the banking sector accounting for 70%. Two-thirds of the banking sector's assets are held by three foreign and two domestically owned banks, recognized as systemically important. The cooperative sector stands as the second-largest group of financial institutions in the country.

Major banks in Paraguay include BBVA Bank, BNF Bank, Continental Bank, Itaú Bank, and the Central Bank of Paraguay. Despite challenges posed by the COVID-19 pandemic, Paraguay's banks remain well-capitalized and profitable, though there has been a notable increase in "watch out" loans, primarily attributed to special repayment facilities granted during the pandemic.

The Paraguayan Banking Association (Asociación de Bancos del Paraguay, or ABP) oversees the country's banking activities, contributing to the seamless integration of expatriates into the national banking system. Banking and finance companies are regulated by the Banking Superintendent, housed within and under the direction of the Central Bank of Paraguay. Although deposits are theoretically guaranteed up to 138 million Guaranis (approximately USD 21,436 as of May 2019), the Deposit Insurance program lacks a legal framework for implementation.

The Central Bank operates autonomously but is not entirely independent, relying on the State Fund for capitalization. The financial sector, regulated by the Central Bank, also includes eleven finance companies catering to smaller consumer operations not served by banks. The banking system predominantly operates on short- to medium-term credit, with twelve months being the usual maximum for commercial transactions. Private financing for vehicles and homes is available on longer terms and in both local and foreign currency.

Furthermore, Paraguay boasts a significant credit union sector, self-regulated and not falling under the Central Bank's purview. While credit unions could hold up to one-third of total financial system assets, their assets are not included in Central Bank data.

Top Banks in Paraguay for Foreigners

In Paraguay, numerous banks address the financial requirements of foreign individuals, providing a variety of services and ensuring the contentment of their international clients. Here are some well-known banks in the region:

Banco Continental

Banco Continental, founded in 1993, stands as the largest bank in Paraguay, boasting total assets exceeding USD 3.5 billion. It is a subsidiary of the Spanish banking group BBVA and a well-established bank in Paraguay, known for its comprehensive financial services. 

Overview: 

• As of March 2022, the bank had a market share of 15% in loans (ranking first) and 14% in deposits (ranking second after Banco Itau Paraguay SA).
• Provides banking services mainly oriented to companies and personal banking.
• Offers a nationwide network of over 100 branches and ATMs.
• Prospective clients are advised to visit the official website or contact the bank for the most up-to-date information on services and associated fees.

Banco Itaú Paraguay

Banco Itaú Paraguay, established in 1974, stands as a significant player in Paraguay's banking sector and operates as a subsidiary of the esteemed Brazilian banking group, Itaú Unibanco. The bank boasts total assets exceeding USD 2.5 billion and maintains a robust network comprising over 50 branches across Paraguay.

Overview:

• Provides personal banking services, including savings and current accounts, debit and credit cards, personal and mortgage loans, and various investment products.
• Corporate clients benefit from business accounts, commercial loans, trade finance, treasury and cash management solutions, and corporate credit cards.
• The bank excels in international banking, offering foreign exchange services, international trade solutions, and access to global banking and markets.
• For a comprehensive understanding of the fee structure, it is advisable to consult the bank directly. 

Banco Nacional de Fomento (BNF)

Banco Nacional de Fomento, established in 1948, is a prominent state-owned bank in Paraguay, playing a vital role in the nation's economic development by providing comprehensive financial services. With a robust network of over 70 branches, the bank has total assets exceeding USD 1.5 billion.

Overview:

• Specializing in financing development projects within the country, BNF emphasizes its commitment to supporting the growth of small and medium-sized businesses through various financial services. 
• The bank places a particular focus on domestic loans, aiming to bolster production activities that contribute to the overall economic development of Paraguay.
• In addition, it offers a range of credit options to cater to diverse financial needs. This includes mortgage services, providing individuals with opportunities to access housing financing solutions.

BBVA Bank

BBVA Bank Paraguay, S.A. traces its roots back to the dynamic era of the 1950s in Paraguay, characterized by new ideas, ambitious projects, and transformative reforms. In 1959, recognizing the need for financial support for public works, the Paraguayan government sought lines of credit from the Spanish government, marking a pivotal moment in the country's economic development.

Overview:

BBVA Bank Paraguay offers a diverse set of services catering to both individual and corporate clients.

Personal Banking Services:

• Savings and current accounts
• Debit and credit cards
• Personal and mortgage loans
• Various investment products

Corporate Banking Services:

• Business accounts
• Commercial loans
• Trade finance
• Treasury and cash management solutions
• Corporate credit cards

International Banking:

• Foreign exchange services
• International trade solutions
• Access to global banking and markets

In 2017, BBVA Paraguay, S.A., engaged in a Multi-beneficiary Intermediated Loan (MBIL) for private sector entities of any size undertaking small-scale investments. The loan supports the European Investment Bank's (EIB) External Lending Mandate priority objectives and is specifically aimed at small and medium-sized enterprises (SMEs) and mid-caps in Paraguay.

Requirements for Opening a Bank Account in Paraguay

For Individuals

When opening an individual bank account with major banks in Paraguay, individuals need to provide specific documents to ensure a seamless and compliant process. The required documentation typically includes:

1. Poof of Address:

• Recent utility bill (electricity, water, gas).
• Rental agreement or property title.
• Notarized letter from the landlord (if required by the bank).
• Proof of Income:
• Recent payslip or salary certificate.
• Bank statements reflecting the individual's income.

2. Identification:

• National Identity Document (Documento Nacional de Identidad - DNI) for Paraguayan citizens or residents.
• Passport for foreign nationals.

3. Tax Identification Number:

• RUC (Registro Único del Contribuyente) for businesses and self-employed individuals.

4. Additional Supporting Documents:

• Completed bank account application form.
• Letter expressing the intention to open a bank account.
• Optional: Letter of recommendation from a reputable bank or professional.

Please keep in mind that in Paraguay, where Spanish is the official language, many banks may prefer or require documents to be presented in Spanish. In addition, as Paraguay is not a member of the Hague Convention, documents may need to go through a process of authentication or legalization through the Consulate or Embassy of Paraguay in the country where the documents were issued.

For Legal Entities

For those looking to establish a business presence in Paraguay, the necessary documents for opening a corporate bank account encompass:

1. Corporate Documents. 

• Certificate of Incorporation.
• Articles of Incorporation.
• Notice of Director and Registered Address.
• By-laws of the Company.

2. Ownership Information:

Details of shareholders. It should include essential information about individuals or entities holding company shares, encompassing full names, addresses, nationality, occupation, and share quantity for individuals. Corporate shareholders require details like names, registered offices, legal structures, registration specifics, and share quantities. The documentation also outlines shareholding structure, indicating ownership percentages, share classes, and associated rights or restrictions. 

3. Banking Resolution:

The Director’s Resolution to Open Account, signed by the required number of directors.

4. Financial Documentation:

• Proof of legitimate source of funds, such as banker’s reference or bank statement from the previous banker.
• Most recent annual return, filed with the registrar, that includes identification documents for all individuals named on the return.
• Annual reports/audited financial statements for the last three years.

It is advisable to communicate directly with the chosen bank to ensure compliance with their specific documentation requirements, as additional documents or clarifications may be requested based on their policies and regulatory standards.

How to Open a Bank Account in Paraguay 

Applying for a bank account in Paraguay involves a step-by-step process to ensure a smooth and successful experience. Here is a guide to help you navigate the process:

Step 1. Select a Bank

Begin by conducting thorough research to identify a suitable bank in Paraguay. Consider factors such as accessibility of branches, available services, and specific requirements of each bank. You may choose between such reputable banks as BBVA Bank, BNF Bank, Itau Bank, etc. 

Step 2. Prepare all Documents 

You need to ensure all necessary documents are assembled ahead of time. This typically includes your passport, Paraguayan visa, proof of address (such as utility bills or rental agreements), proof of income or employment documentation, and, if needed, a local reference.

Step 3. Interacte with the Bank 

You should choose between scheduling an online appointment or visiting the selected bank in person. During this step, you will engage in a brief interview with a bank representative and submit the required documents for identity verification.

Step 4. Setup a Bank Account

At this stage, you will engage in a discussion with the bank representative to determine the most suitable account type for your financial needs. Thoroughly review and sign all provided documents, including the account agreement, terms, and conditions.

Step 5. Receipt of Account Details and Online Integration

Upon successful account opening, receive crucial details such as your account number and any associated cards. If the bank provides online banking services, take the opportunity to set up online access for seamless account management.

Step 6. Learn Bank Policy and Fees

For this point, you have to dedicate time to familiarize yourself with any associated account fees, such as monthly maintenance or transaction fees. Develop a clear understanding of the bank's policies governing these fees.

Step 7. Make an Initial Deposit

If an initial deposit is required, provide the necessary funds to activate your account. Maintain proactive account management by consistently monitoring activity, adhering to specified requirements, and staying informed about any changes in the bank's policies.

Open Bank Account in Paraguay for US citizens

Opening a bank account in Paraguay for US citizens is generally a straightforward process, with local banks welcoming foreign account holders. The Central Bank of Paraguay promotes financial accessibility, and US citizens can easily open savings accounts in Guarani, the local currency, or in US dollars. To initiate the process, US citizens only need to present their valid passport and proof of legal residence in Paraguay, if applicable. Some banks may require additional documentation, so it is advisable to check with the specific bank beforehand.

These accounts often come with no monthly fees, provided that transactions and the account balance remain within certain limits. For instance, there might be a cap on monthly transactions in Guarani, and exceeding this limit could lead to nominal fees.

Benefits of having a Paraguayan bank account include the issuance of a debit card, access to online banking services and ATMs, the ability to make both in-person and online purchases, and the convenience of free and instant domestic transfers. Account holders can also engage in time deposits and participate in electronic payment systems.

US citizens with legal residency status in Paraguay may find the account opening process even smoother. Legal residency can serve as an additional facilitator, streamlining the documentation requirements.

However, it is crucial for US citizens to be aware of international banking regulations and tax laws. The Foreign Account Tax Compliance Actn(FATCA) applies, requiring foreign financial institutions, including those in Paraguay, to report account information of US citizens to the Internal Revenue Service (IRS). Compliance with FATCA regulations is essential, and US citizens should disclose relevant information to both the Paraguayan bank and the IRS to avoid any legal complications.

FAQ

Can a Foreigner Open a Bank Account in Paraguay?

Yes, foreigners can generally open a bank account in Paraguay. Common requirements include a valid passport, proof of legal residence if applicable, a Tax Identification Number (RUC), reference letters, and an initial deposit. However, specific procedures may vary between banks. Language barriers might exist, so having a translator or someone fluent in Spanish can facilitate the process.

Can You Open a Bank Account in Paraguay Online? 

Opening a bank account in Paraguay generally required a physical visit to a bank branch. The country has stringent Know Your Customer (KYC) regulations, and banks often require individuals to present documents in person for verification. However, banking procedures and regulations can evolve, and some banks have been adopting online account opening processes. 

How Reliable are Paraguayan Banks?

Paraguayan banks were generally considered reliable, with a stable regulatory environment overseen by the Central Bank of Paraguay. The country's banking sector has shown resilience and maintained a solid track record, contributing to the overall trustworthiness of Paraguayan banks.

Do Banks in Paraguay Accept Crypto?

Paraguayan banks do not widely accept cryptocurrencies. Additionally, in 2022, Paraguay issued a decree rejecting a bill that sought to regulate cryptocurrency mining, classify it as an industrial sector activity, permit licensing for crypto brokers, and provide tax exemptions. The Senate approved this proposal. 

Golden Harbors team can play a crucial role in simplifying the process of opening a bank account in Paraguay by utilizing our expertise in navigating the intricate regulatory framework of the nation. We guide clients in understanding the complex documentation and eligibility criteria required by Paraguayan banks, ensuring a seamless application process. 

Serving as intermediaries, our team facilitates effective communication between clients and Paraguayan banks, offering continuous support, including follow-up with the bank and assistance with any post-application requirements. Generally, our comprehensive support empowers individuals and businesses to navigate the challenges of the bank account opening process with confidence and efficiency.