Succession and Inheritance in Paraguay: What the Law Says for Foreigners

One doesn't often think about succession when expatriating. We think about taxation, residence, bank accounts, and businesses. But the question of wealth transfer is just as crucial — and it is precisely in this area that Paraguay reveals an often-ignored advantage. Where France can levy up to 45% on a direct line inheritance beyond the allowance, Paraguay levies almost nothing.

This guide reviews the rules of succession and inheritance in Paraguay for foreigners: what Paraguayan law says, how it articulates with French, Belgian, or Swiss law, what assets are concerned, and how to structure your wealth for optimal transfer.

Paraguayan Inheritance Law: The Main Lines

The Paraguayan Civil Code

Inheritance law in Paraguay is governed by the Paraguayan Civil Code (Book V, Title I to IV). The system is inspired by European continental civil law — logical, since the Paraguayan Civil Code is historically influenced by Argentine, Spanish, and French codes. If you are familiar with French inheritance law, you will find similar concepts: forced heirs, disposable portion, order of succession.

The Order of Succession

In the absence of a will, Paraguayan law designates heirs according to a priority order:

• First order: descendants (children, grandchildren) and the surviving spouse
• Second order: ascendants (parents, grandparents) and the surviving spouse
• Third order: the surviving spouse alone
• Fourth order: collateral relatives (brothers, sisters, nephews, nieces)
• Last resort: the Paraguayan State (in the complete absence of heirs)

The Forced Heirship

As in France, Paraguayan law protects certain heirs with a forced heirship — a minimum portion of the estate that is legally theirs and of which the deceased cannot deprive them, even by will:

• Descendants: the reserve is 4/5 of the estate (80%) if there is only one child, and increases proportionally with the number of children
• Ascendants: the reserve is 2/3 of the estate (66.7%)
• Surviving spouse: has specific rights depending on the family composition

The disposable portion — the part you can freely allocate by will — is therefore 1/5 to 1/3 depending on the case. This is an important point for expatriates who wish to organize their succession differently from what the law provides by default.

Wills in Paraguay

Paraguay recognizes several forms of wills:

• Holographic will: written entirely by the testator's hand, dated, and signed. Valid in Paraguay but its recognition can be more complex than a notarized will.
• Notarized will (testamento por acto público): drawn up before a Paraguayan public notary (Escribano) in the presence of witnesses. This is the most secure and recommended form for an expatriate — it avoids disputes and facilitates execution.
• Sealed will (testamento cerrado): drawn up by the testator, sealed, and handed to a notary. Less common but recognized.

The Massive Tax Advantage: No Significant Inheritance Taxes

The Situation in Paraguay

Here is the point that changes everything for expatriates concerned about wealth transfer: Paraguay does not levy inheritance taxes in the European sense of the term. There is no specific tax on inheritances or direct line gifts (parent-child) comparable to French, Belgian, or Swiss inheritance taxes.

Assets located in Paraguay transferred by succession — real estate, bank accounts, company shares — pass to heirs without significant tax levies. This is a considerable advantage for expatriates who accumulate wealth in Paraguay over the years.

Comparison with France

In France, inheritance taxes in direct line (parent → child) are calculated after an allowance of €100,000 per parent and per child, then according to a progressive scale:

Bracket (after allowance)	Rate in France	Rate in Paraguay
Up to €8,072	5 %	~0 %
€8,072 to €12,109	10 %	~0 %
€12,109 to €15,932	15 %	~0 %
€15,932 to €552,324	20 %	~0 %
€552,324 to €902,838	30 %	~0 %
€902,838 to €1,805,677	40 %	~0 %
Beyond €1,805,677	45 %	~0 %

For an estate of €500,000 transferred from a parent to a child in France (after an allowance of €100,000), inheritance taxes amount to approximately €78,000. In Paraguay, the same transfer costs almost zero. On an estate of 1 million euros, the saving in inheritance taxes can exceed €200,000. This is one of the most unrecognized 10 tax advantages of Paraguay.

Comparison with Belgium and Switzerland

In Belgium, inheritance taxes vary by region (Flanders, Wallonia, Brussels) but can reach 27% to 30% in direct line for high brackets. In Switzerland, inheritance taxes are cantonal — some cantons do not levy them in direct line (Schwyz, Lucerne), others apply significant rates. Paraguay performs better than almost all cantons and Belgian regions.

Which Law Applies to Your Succession?

The Principle of the Law of the Last Domicile

In private international law, the law applicable to a succession is generally that of the last domicile (or last habitual residence) of the deceased. If you are a Paraguayan tax resident and your domicile is in Paraguay at the time of your death, Paraguayan law applies to your succession — for assets located in Paraguay.

The European Succession Regulation

For European nationals (French, Belgian), European Regulation No. 650/2012 allows choosing, by will, the law applicable to the entire succession: either the law of nationality or the law of habitual residence. This choice (professio juris) must be explicitly mentioned in your will.

As a French resident in Paraguay, you can choose:

• Paraguayan law: applicable by default (last domicile). Advantage: no significant inheritance taxes. Disadvantage: Paraguayan forced heirship (different from French).
• French law: by explicit choice in your will. Advantage: familiarity, known protection for heirs. Disadvantage: French inheritance taxes could apply depending on the interpretation.

The Case of Assets Located in France

This is the major point of complexity. Even if you are a Paraguayan tax resident and Paraguayan law applies to your succession, real estate located in France remains subject to French inheritance taxes. France retains the right to tax assets located on its territory, regardless of the deceased's tax domicile.

Specifically: if you own an apartment in Paris and bank accounts in Paraguay, the Parisian apartment will be subject to French inheritance taxes while the Paraguayan accounts will escape inheritance taxation. This is an additional reason to consider the location of your assets — a point we address in our guide on the Paraguay-France tax treaty.

The Case of Swiss Citizens

Switzerland is not concerned by the European Succession Regulation. Swiss private international law has its own rules. Generally, the law of the last domicile applies, but cantonal specificities exist. A notary specializing in international inheritance law is recommended.

How to Structure Your Wealth in Paraguay for Optimal Transfer

Strategy 1: Localize Your Wealth in Paraguay

The most direct strategy: concentrate your wealth in Paraguay rather than in France. Assets in Paraguay (real estate, bank accounts, SRL shares) are not subject to French inheritance taxes. By selling your French assets before or after your expatriation and reinvesting in Paraguay (real estate, as detailed in our real estate guide, or in bank savings), you transfer your wealth to a significantly more advantageous inheritance framework.

Strategy 2: Hold Through a Paraguayan SRL

Holding your Paraguayan real estate through a SRL in Paraguay (€1,500, one week) rather than in your own name can simplify transfer. Upon the death of the shareholder, the transfer of SRL shares to heirs is simpler and less costly than direct real estate property transfer. Corporate shares are transferred without the heavy notarial formalities related to real estate.

Strategy 3: Draft a Will in Paraguay

Have a notarized will drafted in Paraguay by an Escribano detailing the distribution of your Paraguayan assets. This will apply to assets located in Paraguay. If you also have assets in France, draft a separate will in France for these assets — the two wills can coexist without contradiction, provided they are coordinated by a professional.

Strategy 4: Lifetime Gifts

In Paraguay, lifetime gifts are not subject to a specific tax comparable to French gift taxes. You can transfer assets to your children during your lifetime with minimal tax cost in Paraguay. However, be careful: if you are still a French tax resident at the time of the gift, French gift taxes apply. The gift must occur after your tax residence change to Paraguay to fully benefit from the Paraguayan framework.

Strategy 5: Life Insurance as a Transmission Tool

Life insurance remains a powerful transmission tool for French expatriates. French life insurance policies benefit from a specific inheritance regime (exemption from inheritance tax up to €152,500 per beneficiary for premiums paid before age 70). This regime applies regardless of your country of residence. It is an effective complement to the Paraguayan strategy for the fraction of your wealth that remains in France.

The Succession Procedure in Paraguay

Opening of the Succession

Upon the death of a resident in Paraguay, the succession is opened before the competent judge of the deceased's last domicile. The judicial procedure (juicio sucesorio) is mandatory to legally transfer assets to heirs. A Paraguayan lawyer must be mandated to represent the heirs.

Steps of the Procedure

• Declaration of death: obtaining the death certificate from the Registro Civil
• Appointment of a lawyer: the lawyer files the request for opening of succession with the court
• Inventory of assets: establishment of a complete inventory of the deceased's assets in Paraguay
• Publication of notices: a notice is published to allow potential creditors to come forward
• Recognition of heirs: the judge verifies the quality of the heirs (will or law) and pronounces the declaration of heirs
• Distribution and transfer: assets are assigned to heirs and property titles are updated

Timeframes and Costs

The succession procedure in Paraguay generally takes between 6 months and 2 years depending on the complexity of the estate and the existence or absence of disputes between heirs. Costs include:

• Lawyer's fees: generally a percentage of the estate's value (2% to 5%)
• Court fees: modest compared to European standards
• Notary fees: for the transfer of real estate property titles
• Transfer taxes: minimal

The total cost of the procedure is a fraction of what inheritance taxes would represent in France on the same estate. The net saving is considerable.

Pitfalls to Anticipate

Not Having a Will

Without a will, Paraguayan law applies by default. If the legal distribution does not match your wishes (for example, if you want to favor one child over another or protect an unmarried partner), you must absolutely draft a will. The cost of a notarized will in Paraguay is modest (200 to 500 USD) — it is a trivial investment for the peace of mind it provides.

Conflicts of Laws

With assets distributed between Paraguay and France (or Belgium/Switzerland), two legal systems can claim to apply to the same succession. Conflicts of laws are a frequent source of complications and disputes. Coordination between a French notary and a Paraguayan lawyer is essential to avoid contradictions and blockages.

Heirs Who Do Not Know Paraguay

If your heirs live in France and do not know Paraguay, the Paraguayan succession procedure can seem opaque and intimidating to them. Prepare them in advance: provide them with the contact details of your Paraguayan lawyer, explain how the procedure works, and leave an organized file with an inventory of your assets and the location of your documents (cédula, RUC, property titles, bank accounts). Our team can also assist your heirs when the time comes — this is an aspect of our ancillary services.

Forgetting Digital Assets

Online bank accounts, cryptocurrencies, PayPal/Wise accounts, internet domains, e-commerce stores — digital assets are part of your inheritance estate. List them in a secure document with access details, and mention them in your will or a letter of last wishes. Without this information, your heirs might never access these assets.

Conclusion: Paraguay, a Haven for Wealth Transfer

Succession in Paraguay is an area where the country excels discreetly. The absence of significant direct line inheritance taxes, combined with a judicial procedure that is formal but inexpensive, makes Paraguay an exceptional framework for wealth transfer for French-speaking expatriates.

For an expatriate who accumulates wealth in Paraguay — real estate, bank accounts, company shares — all of this wealth can be transferred to heirs with virtually no tax cost. Compared to the 20% to 45% inheritance taxes in France, the savings amount to tens or even hundreds of thousands of euros.

The key: anticipate. Draft a notarized will in Paraguay. Coordinate it with your asset situation in France. Structure your assets via an SRL if relevant. And above all, localize your wealth in Paraguay as much as possible to fully benefit from this advantageous framework — starting with your Paraguayan tax residence (from €1,400, 3 months) which is the foundation of any wealth strategy in Paraguay.

Do you want to structure your wealth in Paraguay for optimal transfer? Contact our team for personalized support and a connection with lawyers specializing in Paraguayan inheritance law.