How to Invest in Paraguay from Uruguay: 2026 Legal & Tax Guide
Uruguay doesn't share a border with Paraguay, so it buys without restrictions — but as of January 1, 2026, a Uruguayan tax reform changes the math for anyone holding land abroad.
Can a Uruguayan citizen buy land in Paraguay without restrictions?
No restrictions. Despite being in the Mercosur region, Uruguay doesn't share a border with Paraguay, so Law 2,532/05 doesn't apply at all, not even within the 50 km strip — you can buy rural or urban land anywhere in the country.
Paperwork from Uruguay
Uruguay is a Hague Convention member. The special power of attorney is signed before a Uruguayan notary and apostilled, or executed directly at the Paraguayan Consulate in Montevideo. The Mercosur Residency Agreement later makes getting a Paraguayan ID easier if you plan to rent out or resell.
Taxes in Paraguay when buying
3%–4% of the value: transfer VAT (≈1.5% effective), municipal tax (0.3%–0.5%), Registry inscription (≈0.8%) and notary fees (0.75%–2%). Uruguay and Paraguay have a double-taxation treaty in force (Law 6,276/19) covering income and wealth.
The key 2026 change: Uruguayan income tax no longer ignores your foreign real estate
Through 2025, Uruguay's tax system was territorial: income from property abroad was essentially untaxed at home. The 2025-2029 National Budget Law changed that: as of January 1, 2026, capital income from real estate held through non-resident entities — which explicitly includes rental income and capital gains from land in Paraguay — is now treated as Uruguayan-source income and taxed at a 12% personal income tax rate. The credit for the Paraguayan non-resident tax already paid applies thanks to the existing treaty, but the investment is no longer tax-invisible the way it used to be.
How to send money from Uruguay
Uruguay has one of the freest currency markets in the region: no capital controls, no prior Central Bank authorization needed to wire funds abroad, and a freely convertible peso. If you buy through a company, you must declare the ultimate beneficial owner (anyone controlling 15% or more) to the BCU.
Is there an investment protection treaty?
The tax treaty has been in force since 2019, but no reciprocal Investment Promotion and Protection Agreement specifically with Paraguay was confirmed to be in force. Both countries are Mercosur members.