How to pay a US company legally from Paraguay
Navigating international payments can be complex, especially for entrepreneurs and business owners in Paraguay looking to pay US companies. This guide aims to demystify the process, providing a clear pathway for legitimate USD payments while highlighting key considerations for compliance and efficiency.
The short answer
Paying a US company from Paraguay is entirely feasible, though it requires understanding local and international financial regulations. The primary methods involve international wire transfers through commercial banks or specialized payment platforms. Key considerations include foreign exchange rules set by the Banco Central del Paraguay and potential US withholding taxes due to the absence of a tax treaty.
Does Paraguay have a US tax treaty?
No, Paraguay does not have a comprehensive income tax treaty with the United States. This is a crucial point for Paraguayan businesses making payments to US entities, particularly concerning dividends. In the absence of a tax treaty, the statutory US withholding tax (WHT) rate of 30% generally applies to dividends paid from US sources to non-resident aliens, including entities in Paraguay. This means that if a US company distributes dividends to a Paraguayan shareholder, 30% of that dividend will typically be withheld by the US payer and remitted to the IRS. While other types of payments might have different tax implications, the lack of a treaty simplifies some aspects (no treaty benefits to claim) but complicates others (higher default withholding rates).
The central bank and FX rules (Banco Central del Paraguay)
The Banco Central del Paraguay (BCP) serves as Paraguay's highest monetary authority, overseeing the country's financial and economic policies. When it comes to foreign exchange (FX) rules, Paraguay maintains a relatively liberal regime. According to information from trade.gov, there are generally no controls on foreign exchange transactions, apart from bank reporting requirements for transactions exceeding $10,000 USD. This means that importers and exporters, and by extension, businesses making international payments, can freely buy and sell foreign exchange at commercial banks, finance companies, or exchange houses at market rates. The BCP's role is primarily supervisory, ensuring the stability of the financial system and compliance with reporting standards, rather than imposing strict capital controls on outbound payments. However, all transactions must adhere to anti-money laundering (AML) and know-your-customer (KYC) regulations, which the BCP actively enforces, including recent regulations for e-wallets to match traditional banking requirements.
Step-by-step: how to pay a US company
- Verify the US Company's Details: Obtain the full legal name, address, bank name, SWIFT/BIC code, account number, and any other necessary routing information from the US company. Ensure all details are accurate to avoid delays or lost funds.
- Choose a Payment Method: Select a payment rail that balances cost, speed, and reliability. Options typically include international wire transfers via commercial banks or specialized international payment platforms.
- Initiate the Transfer:
- Commercial Banks: Visit your local commercial bank in Paraguay. You will need to fill out an international wire transfer form, provide the US company's banking details, and specify the amount in USD. Be prepared for potential fees from both the sending and receiving banks.
- Payment Platforms: If using a platform like TransFi, Wise, or similar services, you will typically initiate the transfer online or through their app. You'll link your Paraguayan bank account or fund the transfer through other local methods, then input the US company's details. These platforms often offer more competitive exchange rates and lower fees than traditional banks.
- Comply with Reporting Requirements: For transactions over $10,000 USD, your Paraguayan bank or payment provider will have reporting obligations to the Banco Central del Paraguay. Ensure you provide all requested documentation and information to facilitate this process.
- Monitor the Transfer: Keep track of the transfer status. Most banks and platforms provide tracking numbers or notifications. Confirm with the US company once they have received the funds.
- Retain Records: Maintain meticulous records of all transactions, including invoices, payment confirmations, and any correspondence, for auditing and compliance purposes.
Best payment rails for this corridor
For payments from Paraguay to the US, several payment rails offer varying benefits:
- International Wire Transfers (SWIFT): This is the traditional method offered by commercial banks. It is universally accepted and secure but can be slow (2-5 business days) and relatively expensive due to intermediary bank fees and less favorable exchange rates. Citibank is noted as the only US bank operating in Paraguay, and nearly all local banks have correspondent banking arrangements with US banks, primarily in New York and Miami.
- Specialized International Payment Platforms (e.g., Wise, TransFi, Airwallex): These platforms use local payment rails where possible and often use stablecoin-powered infrastructure for cross-border transactions. They typically offer faster transfers (often same-day or next-day), more transparent and lower fees, and better exchange rates compared to traditional banks. TransFi, for instance, highlights its ability to connect Paraguay to over 100 countries with fast settlement and competitive FX rates. Wise and Airwallex also provide services for sending money to Paraguay, which implies they facilitate the reverse flow as well.
- ACH (Automated Clearing House): While primarily a US domestic payment system, some international payment platforms can facilitate ACH payments to US companies by acting as an intermediary. This can be a cost-effective option for recurring payments once established, but it's not a direct rail from Paraguay.
For a detailed comparison, see our full Airwallex vs Wise comparison.
For businesses in Paraguay, specialized international payment platforms generally offer the best balance of speed, cost-effectiveness, and ease of use for sending funds to US companies.
Common compliance mistakes
- Incomplete or Inaccurate Beneficiary Information: Incorrect bank details, names, or addresses are a leading cause of delayed or rejected payments. Always double-check with the US recipient.
- Failure to Comply with AML/KYC: Not providing required documentation or information to your Paraguayan bank or payment provider can lead to transaction holds or investigations. The Banco Central del Paraguay enforces strict AML/KYC regulations.
- Ignoring FX Reporting Thresholds: While Paraguay has liberal FX rules, transactions over $10,000 USD require reporting. Failing to understand or comply with these reporting requirements can lead to penalties.
- Underestimating Withholding Tax Implications: For certain types of payments, especially dividends, the absence of a US-Paraguay tax treaty means a 30% US withholding tax may apply. Businesses should consult with tax professionals to understand their obligations and avoid unexpected tax liabilities for the US recipient.
- Lack of Proper Documentation: Not retaining invoices, contracts, and payment confirmations can create issues during audits or in case of disputes. All international transactions should be thoroughly documented.
What Keystone Bridge clients in Paraguay do
Keystone Bridge clients in Paraguay, typically diaspora entrepreneurs and business owners, prioritize efficiency, cost-effectiveness, and reliable compliance when making payments to US companies. They often use a combination of strategies:
- Utilizing Modern Payment Platforms: Many opt for specialized international payment platforms that offer competitive exchange rates, lower transaction fees, and faster settlement times compared to traditional banks. These platforms are chosen for their user-friendly interfaces and strong compliance frameworks.
- Engaging with Correspondent Banking Networks: For larger or more complex transactions, clients may use Paraguayan banks with established correspondent banking relationships with US financial institutions, ensuring reliable transfers.
- Proactive Tax Planning: Recognizing the absence of a US-Paraguay tax treaty, Keystone Bridge clients work with tax advisors to understand and plan for potential US withholding taxes on specific payment types, such as dividends, ensuring compliance and avoiding surprises.
- Strict Adherence to AML/KYC: They meticulously provide all necessary documentation and information to their financial institutions, ensuring full compliance with Banco Central del Paraguay's AML/KYC regulations for all international transfers.
- Maintaining Comprehensive Records: All payment-related documents, including invoices, contracts, and transfer confirmations, are diligently maintained for transparency and audit readiness.
This approach allows Keystone Bridge clients to efficiently and legally manage their cross-border payments, supporting their business operations and growth while mitigating compliance risks.
References
- IRS. (n.d.). United States income tax treaties - A to Z. Retrieved from https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z
- PwC. (n.d.). Paraguay - Individual - Foreign tax relief and tax treaties. Retrieved from https://taxsummaries.pwc.com/paraguay/individual/foreign-tax-relief-and-tax-treaties
- International Tax Review. (2025, September 19). The future of international taxation in Paraguay: treaties, WHT, and pillar two. Retrieved from https://www.internationaltaxreview.com/article/2fclk0es18dso8e7jm1hc/sponsored/the-future-of-international-taxation-in-paraguay-treaties-wht-and-pillar-two
- Expat Breakdown. (2026, July 19). Paraguay Tax Guide for US LLC Operations 2026. Retrieved from https://movetoparaguay.com/en/blog/paraguay-tax-guide-us-llc-operations
- Trade.gov. (2024, March 5). Paraguay - Trade Financing. Retrieved from https://www.trade.gov/country-commercial-guides/paraguay-trade-financing
- TransFi. (2025, September 11). Paraguay’s Payment Rails & How They Work – SIPAP, Mobile Payments & Financial Inclusion. Retrieved from https://www.transfi.com/ph/blog/paraguays-payment-rails-how-they-work---sipap-mobile-payments-financial-inclusion
- Papaya Global. (2025, May 4). How To Pay Employees In Paraguay. Retrieved from Paraguay — Corporate — Taxes on corporate income — PwC Tax Summaries
- MTFX Group. (2025, December 30). Paying Suppliers in the US: Which is the Best Payment Rail?. Retrieved from https://www.mtfxgroup.com/post/paying-suppliers-in-the-us-which-is-the-best-payment-rail/
- Wise. (n.d.). Send money to Paraguay | Money Transfer to Paraguay. Retrieved from https://wise.com/us/send-money/send-money-to-paraguay
- World Bank. (2025, April 7). Paraguay's capital markets opens up to the world with key reforms. Retrieved from https://blogs.worldbank.org/en/latinamerica/paraguay-capital-markets-reform
Disclaimer: This guide is for general information only and is not tax, financial, or legal advice.
For the broader picture on this topic, see our guide on how to pay a US company from your country.