Deciding to expand to Paraguay may have been an easy decision for your company to make, but the process will come with plenty of challenges. You need to think about everything from how you’ll set up your payroll to what kinds of supplemental benefits you’ll provide. On top of that, your company needs to learn and follow Paraguay’s subsidiary laws to stay compliant.
Globalization Partners offers Paraguay subsidiary outsourcing to make it easier for companies to expand. We can take care of everything, including hiring employees for your team and adding them to our payroll, making sure your employees get the right compensation and benefits, and taking on all the risk associated with compliance.
How to Set Up a Paraguay Subsidiary
Instead of jumping into setting up your Paraguay subsidiary, you can make the process easier by considering a few important factors first. Start by deciding on a location for your office space. Paraguay’s subsidiary laws can vary by region or city, so it’s essential to find a good place that’s friendly to foreign incorporation. If you’re not sure which place is best, consider working with a consultant or other third party who can help.
Next, you need to focus on what kind of activities you want to perform in the country, as your work can impact which type of entity you choose. Paraguay has several different subsidiary options, such as a limited liability company (LLC), public limited company, branch office, or representative office. Different entities often have their own restrictions, tax laws, share capital requirements, and more.
The LLC is the most popular type of subsidiary for companies looking to operate much like a resident company. Setting up your Paraguay subsidiary as an LLC includes the following steps:
- Drafting company by-laws
- Obtaining documents of incorporation
- Obtaining a certificate from a relevant government official or the Chamber of Commerce in your country of origin
- Certifying the legitimacy of your head office in the country of origin
- Providing details from a meeting with the Board of Directors, including desire to establish the company, assigning nominal capital to the company, establishing a fiscal address, designating the person(s) who will manage the office, and giving power to the person managing the office
Paraguay Subsidiary Laws
Paraguay subsidiary laws can change depending on the type of entity you use for incorporation. For example, LLCs need to have at least two shareholders — including one who is a Paraguayan national — and one director. All three individuals should be temporary or permanent residents of Paraguay.
You also need to include the initials S de RL in your name. There are no minimum capital requirements, but the company’s capital should get divided into nominal quotas of $1. Keep in mind that it usually takes 10 to 12 weeks to form an LLC, as long as you follow Paraguay’s subsidiary laws and avoid additional delays or fines.
Benefits of Setting Up a Paraguay Subsidiary
Once you complete the lengthy Paraguay subsidiary setup process, you’re ready to start working in the country. You can benefit from new business relationships, hiring talented employees, and showing your company that you’re committed to a global expansion. Incorporating as an LLC will also help your parent company, as it will not incur any litigation or fines from the subsidiary.
Unfortunately, you can’t get these benefits until you spend weeks, or possibly months, going through the incorporation process. Globalization Partners will help you expand in less than a day, and we’ll also handle all Paraguay subsidiary laws as the Employer of Record. When you work with us, you can feel confident that we’ll handle running all the challenging parts of your business while you focus on growing your new location.
Other Important Considerations
You can make your incorporation process a little easier by preparing for it ahead of time. Although you don’t have any minimum share capital requirements as an LLC, you’ll still need to pay for travel back and forth to Paraguay and other steps in the process. You’ll also need time to study Paraguay’s subsidiary laws and travel, so you should work with your company to figure out who can handle what tasks.
Let Globalization Partners Help With Your Expansion
Globalization Partners has an entire team of global expansion experts ready to help you expand quickly and easily. Contact us today to learn more about Paraguay subsidiary outsourcing and our global expansion solution.