Paraguay or Belize in 2026: two 0% tax jurisdictions, two opposing realities
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Two Latin American countries that are never compared, yet share a fundamental commonality: territorial taxation. On one side, Belize, a micro English-speaking Caribbean state sandwiched between Mexico and Guatemala. On the other, Paraguay, a landlocked South American agricultural powerhouse between Brazil and Argentina. Two worlds, two sizes, two cultures, but the same fiscal principle: only locally sourced income is taxed, foreign income remains outside the scope of taxation.
Belize attracts English-speaking expats, especially Americans and Canadians, with its Caribbean beaches, the second-largest barrier reef in the world, and its Qualified Retired Persons residency program. Paraguay attracts French and Spanish speakers with its ultra-low cost of living, fast residency, and fiscal stability. This comparison pits the two destinations against each other across seven key dimensions of expatriation.
Dimension 1: Taxation
| Aspect | Paraguay | Belize |
|---|---|---|
| Principle | Strict territoriality, Law 6380/2019: foreign-sourced income is outside the scope of taxation. | Also territoriality: only Belizean-sourced income is taxed. In principle, the two countries are similar. |
| Income tax, local income | IRP from 8 to 10%. | Exemption up to approximately USD 13,000 per year, then a rate of 25% beyond that. Generous entry threshold, significantly higher rate thereafter. |
| Corporate tax | IRACIS: 10% on profits from Paraguayan sources. | A business tax based on turnover for local activities, at rates varying by sector, and a historical regime of offshore companies, IBCs, exempt on foreign income, but increasingly impractical (see below). |
| VAT | 10%. | GST of 12.5%. |
| Inheritance and wealth | 0% on both: neither inheritance tax nor wealth tax. | 0% on both as well. Perfect equality on this front. |
| Capital gains | Outside the scope of taxation for foreign-sourced capital gains; local-sourced capital gains fall under IRP at 8-10%. | 0% on all capital gains, local and foreign: Belize has no capital gains tax. A real theoretical advantage of Belize, with limited practical scope for an expat whose assets are mostly abroad. |
| Cryptocurrencies | Territoriality: foreign-sourced gains outside the scope of taxation. Reporting obligation to the DNIT beyond USD 5,000 per year, Resolution 47/2026, purely informative. | No capital gains tax, therefore no taxation of crypto gains. Almost non-existent regulatory framework: simple by default, uncertain by design. |
| Belizean offshore companies | Not applicable: the standard international structuring goes through the US LLC, a respected and bankable jurisdiction. | Belizean IBCs have long been a popular offshore tool: exemption on foreign income, discretion, light formalities. Since major document leak scandals and tightening international standards, they have become a handicap: banks massively refuse to open accounts for Belizean structures, as a compliance precaution. Yesterday's flagship tool is today's warning sign. |