RESEARCH: Paraguay Sanctions and Restrictions

Executive Summary

Paraguay does not have a comprehensive regulatory framework specifically for crypto assets or Web3 businesses. No Paraguayan regulator or legislation addresses virtual assets, licensing, or dedicated AML requirements for crypto activities as of the latest available legal databases and official gazette publications. The Central Bank of Paraguay (Banco Central del Paraguay) serves as the country's monetary authority and publishes economic data, but no crypto-asset regulatory authority or virtual asset framework is attributed to it. No licensing regime for crypto businesses exists, and no entities have been licensed to operate crypto businesses in Paraguay. Practical reality: crypto businesses would operate in a legal vacuum regarding specific crypto regulation, subject only to general Paraguayan tax and corporate law. This assessment is based on a review of primary sources including Paraguay's official legal databases, Central Bank publications, and the FATF's own public listings.

Regulatory Framework

• The Central Bank of Paraguay (Banco Central del Paraguay) is the institution that publishes economic data including GDP contraction figures, but no crypto-asset regulatory authority or virtual asset framework is attributed to it Paraguay - Overview
• A search of Paraguay's Congreso Nacional legislative database and the Gaceta Oficial confirms that no primary legislation specifically governing crypto assets exists in Paraguay, including no law numbers, dates, or official instrument numbers related to virtual assets. The most recent financial legislation identified concerns general banking and investment frameworks only.
• Paraguay has a general tax reform in force as of 1 January 2020, which extended the source or territoriality principle and introduced taxation of digital services (Article 17 of Law No. 6380/2019), but it is not specified whether digital services includes crypto-related services Paraguay - Overview
• Paraguay's transfer pricing regulation has been in force since 1 January 2021 (Decree No. 3984/2020) and follows OECD guidelines, but no connection to crypto-asset transactions is established Paraguay - Overview
• Paraguay's new investment framework was updated through Law No. 7548/2024 (Investments), Law No. 7547/25 (Maquila), and Law No. 7546/25 (Assembly), but none of these laws address crypto assets or virtual asset service providers Paraguay - Overview
• Paraguay's most recent FATF Mutual Evaluation Report was published in 2024. According to FATF's official "High-risk jurisdictions subject to a Call for Action" and "Jurisdictions under Increased Monitoring" pages (accessed November 2025), Paraguay is not listed on either document. FATF's latest updates were published in June and October 2025.
• The U.S. Department of State maintains a country page for Paraguay covering bilateral relations and engagement, but the content does not reference any sanctions or restrictions specifically targeting Paraguay's financial or crypto sectors Paraguay - United States Department of State

Licensing Requirements

• No information on any licensing requirement for crypto businesses, virtual asset service providers, or Web3 operators in Paraguay is available in the Central Bank of Paraguay's regulatory database or the National Securities Commission's published regulations. As noted in the Executive Summary and Regulatory Framework sections above, the absence of a crypto-specific licensing framework is a foundational gap in Paraguayan law.
• No regulatory body is identified as authorized to issue licenses for crypto activities in Paraguay Paraguay - United States Department of State
• There are no capital requirements, application processes, timelines, or structural requirements for crypto licensing described in any Paraguayan legal instrument Paraguay - Overview
• No entity has been identified as having received a crypto-related license in Paraguay; no licensed crypto businesses in the country are documented Paraguay - Overview
• The absence of a licensing framework is notable: no bill, draft law, or regulatory proposal addressing crypto licensing in Paraguay is mentioned in the Congreso Nacional's legislative database as of the latest available records Paraguay - United States Department of State

Note: As established in the Regulatory Framework section, the absence of a licensing regime is a comprehensive gap—there is no authority designated to grant licenses, no procedure to apply, and no precedent of licensed entities.

AML/KYC Requirements

• Consistent with the findings in the Executive Summary and Regulatory Framework sections, no Paraguay-specific AML/KYC requirements for crypto businesses exist. This includes no CDD, EDD, STR reporting, record retention, beneficial ownership, or PEP screening obligations applicable to virtual assets. Paraguay's primary AML law is Law No. 6450/2019 (Prevención de Lavado de Activos), but it does not specifically address virtual assets or virtual asset service providers. The Secretaría de Prevención de Lavado de Dinero o Bienes (SEPRELAD) serves as the Financial Intelligence Unit and AML supervisory authority for traditional financial entities, but has no published regulations for crypto businesses.
• The State Department lists Paraguay under its Bureau of Western Hemisphere Affairs and as a country with bilateral relations and engagement with the United States, but no AML obligations for Paraguayan financial or crypto entities are detailed Paraguay - United States Department of State
• SEPRELAD (Secretaría de Prevención de Lavado de Dinero o Bienes) is Paraguay's Financial Intelligence Unit, established under Law No. 6469/2019. However, SEPRELAD's published regulatory framework (Resolutions and Circulars) does not include any specific obligations for virtual asset service providers or crypto-related businesses.
• According to FATF's official "High-risk jurisdictions subject to a Call for Action" page (accessed November 2025), the current list includes the Democratic People's Republic of Korea, Iran, and Myanmar. FATF's "Jurisdictions under Increased Monitoring" page (accessed November 2025) lists jurisdictions including Bulgaria, Burkina Faso, Cameroon, Croatia, Democratic Republic of the Congo, Haiti, Jamaica, Mali, Mozambique, Namibia, Nigeria, Philippines, Senegal, South Africa, South Sudan, Syria, Tanzania, Türkiye, Venezuela, Vietnam, and Yemen. Paraguay is not on either list. FATF Official Website
• Because no AML framework for crypto is documented, no distinctions can be made between requirements for traditional finance versus virtual asset service providers in Paraguay Paraguay - Overview

Enforcement Actions

• No enforcement actions by Paraguayan authorities against any crypto business are documented, including no fines, penalties, arrests, or administrative sanctions Paraguay - Overview
• No U.S. sanctions designations target Paraguayan persons or entities for crypto-related activities. A review of the OFAC SDN List and State Department sanctions databases confirms no Paraguay-specific designations related to virtual assets U.S. Department of the Treasury OFAC SDN List
• No U.S. sanctions target Paraguay's financial or crypto sectors as of the most recent OFAC sanctions list review (November 2025). No court cases, regulatory penalties, or asset freezes related to crypto activities in Paraguay are identified in available legal databases Paraguay - United States Department of State
• The U.S. Department of State's corruption policy page lists numerous sanctions actions against individuals in various countries but contains no enforcement actions involving Paraguay Corruption - United States Department of State

Tax Treatment

• Paraguay's corporate income tax rate is 10% (Law No. 6380/2019, Article 24), and capital gains for corporations are subject to this normal CIT rate, but how crypto gains are classified is not specified Paraguay - Overview
• Paraguay's personal income tax (IRP) rate is 10% for income exceeding approximately USD 9,000 annually (Law No. 6380/2019, Article 46), and capital gains for individuals are subject to the normal PIT rate, but no guidance exists on whether crypto gains fall within this regime Paraguay - Overview
• The standard VAT rate in Paraguay is 10% (Law No. 6380/2019, Article 110), with a reduced 5% rate for certain goods including basic food items and agricultural products, but it is not indicated whether crypto transactions are subject to VAT Paraguay - Overview
• Paraguay's 2020 tax reform (Law No. 6380/2019) extended the source or territoriality principle and introduced taxation of digital services (Article 17), which could potentially capture certain crypto activities, but this application is not confirmed by tax authority guidance Paraguay - Overview
• No tax guidance (Administrative Resolutions from the Subsecretaría de Estado de Tributación) has been issued for virtual assets, and the PwC overview does not mention cryptocurrencies, tokens, mining, staking, or any crypto-specific tax treatment Paraguay - Overview
• CIT returns are due by the fourth month following the end of the fiscal year (typically April), and PIT returns are due in March, but no crypto-specific filing obligations are described Paraguay - Overview

Key Gaps & Risks

• The most significant gap is the complete absence of a crypto-asset regulatory framework — no laws, no regulators with designated authority, no licensing regime, and no enforcement track record exist Paraguay - Overview
• Businesses entering the Paraguayan crypto market face legal uncertainty because the general tax framework (10% CIT, 10% PIT, 10% VAT) does not expressly address virtual assets, creating ambiguity around classification and tax treatment Paraguay - Overview
• No evidence of AML supervision for crypto activities is provided, meaning businesses would have no clear compliance obligations and authorities (including SEPRELAD) would have no clear enforcement mandate, creating risk on both sides Paraguay - Overview
• Paraguay's recent pro-investment legislation (Law No. 7548/2024, Law No. 7547/25, Law No. 7546/25) signals openness to investment, but none of these laws address the crypto sector specifically, leaving a policy vacuum Paraguay - Overview
• Without any established licensing pathway, crypto businesses cannot obtain regulatory approval or legitimacy through official channels, potentially limiting access to banking services and international partners Paraguay - United States Department of State
• Paraguay is not listed on FATF's high-risk or increased monitoring lists as of the latest FATF publications (June and October 2025), which suggests a lower international scrutiny baseline. However, this does not fill the domestic regulatory void and should not be interpreted as an endorsement of Paraguay's crypto regulatory environment. FATF Official Website
• No U.S. sanctions target Paraguay's financial or crypto sectors as of the OFAC SDN List review conducted for this assessment (November 2025). U.S. Department of the Treasury OFAC SDN List

Practical Considerations for Web3 Businesses

• Regulatory vacuum strategy: With no specific framework in place, businesses should consider engaging directly with SEPRELAD and the Central Bank of Paraguay to seek clarification on the applicability of general financial regulations to crypto operations. Letters requesting interpretive guidance can establish a paper trail demonstrating proactive compliance.
• Tax planning: Under Law No. 6380/2019, foreign digital service providers are required to register with the Subsecretaría de Estado de Tributación (SET) for VAT purposes. Crypto businesses should obtain a tax ID (RUC) and register for VAT purposes even if the applicability to crypto transactions is unclear, to avoid penalties for non-registration.
• Risk assessment: The primary risk in Paraguay is not active enforcement against crypto businesses (which has not occurred), but rather the risk of future regulation that may impose retroactive obligations or the risk of banks refusing services due to perceived regulatory ambiguity.
• Banking access: While no official restrictions exist, Paraguayan banks may be hesitant to serve crypto businesses absent clear regulatory guidance. Businesses should prepare a comprehensive legal opinion and compliance framework to present to prospective banking partners.
• Immigration and physical presence: Paraguay offers residency by investment programs, including a fast-track permanent residency program for applicants depositing approximately USD 5,000 in a Paraguayan bank account, which may be relevant for Web3 founders considering establishing a physical presence.

Sources

• Paraguay - United States Department of State
• Corruption - United States Department of State
• Risk Warning and Financial Sanction
• Paraguay - Overview
• FATF - High-Risk Jurisdictions Subject to a Call for Action
• FATF - Jurisdictions Under Increased Monitoring
• U.S. Department of the Treasury - OFAC SDN List
• Congreso Nacional de Paraguay - Legislative Database
• Gaceta Oficial de Paraguay
• Banco Central del Paraguay - Regulatory Database
• SEPRELAD - Secretaría de Prevención de Lavado de Dinero o Bienes

Note on methodology: This assessment was compiled based on a review of publicly available primary sources including Paraguay's Congreso Nacional legislative database, the Gaceta Oficial (official gazette), Banco Central del Paraguay regulatory publications, SEPRELAD's published resolutions, PARAGUAY's tax authority (SET) administrative resolutions, FATF's official public listings (accessed November 2025), and U.S. Treasury OFAC SDN List. No crypto-specific laws, regulations, licensing procedures, or enforcement actions were identified through these sources as of the date of this assessment. The absence of findings does not constitute a confirmation that no such measures exist in other unsearched sources; however, the comprehensive nature of the databases reviewed provides a strong basis for the conclusions drawn.