Ever since the start of the new decade in 2020, one Latin American country has seen an increase in attention from globe-trotting expatriates and digital nomads – Paraguay. Renowned for its robust approach towards cryptocurrencies, especially Bitcoin, the country has experienced a significant influx of international migrants.
This intriguing trend raises the question – what's pulling people towards Paraguay?
Influencing Factors to Migration in Paraguay
Several factors contribute to the rising migration trend to Paraguay. Some key influences are:
- The COVID-19 pandemic which reduced global mobility and increased migrant vulnerabilities.
- The escalating economic crisis negatively impacting living conditions and employment opportunities, thereby increasing emigration incentives.
Political instability generating social unrest and uncertainty about the country's future and its democratic institutions.
Environmental challenges, such as deforestation and climate change affecting the livelihoods of many rural and indigenous communities.
- Regional integration facilitating the movement of people within the MERCOSUR bloc and other neighboring countries.
The Crypto Appeal: Paraguay and Bitcoin
Paraguay's relationship with cryptocurrencies, particularly Bitcoin, offers a strong attraction for digital nomads and crypto enthusiasts. The country's abundance of cheap energy has made it a hub for crypto miners and investors.
Some lawmakers have even voiced support for Bitcoin becoming a legal tender, similar to El Salvador's groundbreaking move.
Paraguay's Senate recently passed a bill to regulate crypto mining and trading. It requires crypto entities to register with the tax authority and pay fees and taxes. Critics argue that the bill is restrictive, favoring large mining companies over smaller operations.
The bill, currently awaiting presidential approval or veto, reflects the evolving and dynamic relationship between Paraguay and cryptocurrencies.
Paraguay: An Attractive Destination for Expats
Beyond the appeal of the crypto environment, Paraguay offers additional benefits that make it a viable choice for expatriates.
Low cost of living: Compared to many Western countries, Paraguay boasts a significantly lower cost of living, allowing individuals to enjoy a more affordable lifestyle [source].
Favorable tax regime: Paraguay doesn't tax foreign income or capital gains, making it an appealing destination for those seeking tax efficiency [source].
- Simple residency process: The process to obtain permanent residency in Paraguay is straightforward. It only requires a deposit of US$5,000 in a local bank and a police clearance certificate.