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Hiring employees & recruitment requirements in Paraguay


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Paraguay has astonishing annual rates of economic growth, averaging at 4% between 2015 and 2017, and thus making it one of the most underrated jurisdictions in Latin America. Paraguay is a pool of varied market opportunities, including flourishing sectors like agriculture, services, and mining. Although highly attractive, it is difficult to do business in a country where one does not fully understand local laws, taxes, and regulations.

Check out the short presentation made by our team in Paraguay and learn about the different options to hire staff in the region.

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Hiring employees & recruitment requirements in Paraguay

  1. 1. Hiring Employees & Recruitment requirements in Paraguay
  2. 2. Key Considerations: Employment Find below, some of the key considerations that should be taken into account before contracting staff in Paraguay Yes – 30 or 60 days Is there an employee probation period? Yes Do staff need a local employment contract? Yes Can expatriate staff be hired? Minimum of 12 days per annum Vacation entitlement Max employer contribution is 16.5% Total cost of employment Employers - they must also pay employee’s social security Who manages withholding tax? • Christmas Bonus • Social Insurance • Pension • Family Allowance Employee benefits
  3. 3. Pathways to Hiring Staff Through a local legal entity Through a PEO solution: Professional Employer Organization
  4. 4. Forming a Legal Entity in Paraguay In Paraguay, there are (3) main types of legal entities: Corporations (S.A), Limited Liability Companies (SRL), and Branch Offices Advantages: • Greater control of your employees • Better knowledge of local market, laws and regulation • Viewed more positively than a PEO solution Disadvantages: • High set-up/ongoing costs • Administration involved in managing a local company • Accounting and tax obligations
  5. 5. Professional Employer Organization Advantages: • You can operate without forming and maintaining a local entity • Limited legal responsibility • Cost-effective way to convert international contractors into employees Disadvantages: • The PEO becomes a co-employer • Loss of control • Costs involved with PEO services • Compromised company culture International PEO is a method to employ staff without having your own company
  6. 6. Are you looking to hire staff? As you are now aware, you have two options to hire staff: a) Through a Local Legal Entity or b) Through a PEO solution Need assistance hiring employees? Partner with Biz Latin Hub to learn how we can support you and your business in Latin America
  7. 7. Doing Business in Paraguay? Learn More Here! Professional Employer Organisation (PEO) - Latin America How to Form a Company in Paraguay Six Reasons to Incorporate a Company in Paraguay