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International expansion is an open door of business opportunities. However, the process of hiring and managing a team abroad can be challenging. As a result, many international companies now prefer to partner with an Employer of Record in Paraguay when entering the market.
Employer of Record (EOR) services like INS Global streamline the process of setting up a team in Paraguay by taking care of various legal and administrative needs, such as hiring, onboarding, tax and payroll management, worker benefit administration, and regulatory compliance.
An EOR partner becomes fully liable for the legal and administrative responsibilities relating to your operations. Such partnerships allow you time and resources for developing and executing result-altering business strategies.
We’ve assisted numerous companies from various industries quickly and effectively realize their dreams of international in over 160 countries.
Want to have a Team in Paraguay TODAY?
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Company incorporation is a common procedure your business might follow when expanding. However, it comes with a lot of risks that your business may find hard to manage. Choosing an EOR, on the other hand, helps mitigate the risks of expansion.
An EOR can help your business with important tasks like:
The Advantage in Figures
PEO/EOR
Company Incorporation
Price
80% Less Expensive
Market Entry
2-5 Days
6 Months
Assured Legal Compliance
Many international businesses seeking to break into a new market are unfamiliar with the labor laws or regulatory needs in Paraguay. EOR services, however, help can you avoid lawsuits and penalties resulting from employee claims or non-compliance with tax and labor laws.
Reduced Cost And Time
International expansion is typically expensive and time-consuming for businesses. However, with a reliable partner you can quickly settle into a new environment on time.
Focus Solely on Company Expansion
Outsource HR-related services and focus on your business expansion when you partner with an EOR in Paraguay.
Mitigate Risks
An EOR partner ensures you comply with every tax and labor law. This approach eliminates the risks of penalties or lawsuits due to employee claims or non-compliance.
One Platform For Everything
An EOR partner like INS Global can help you with business expansion needs in over 160 countries in the world. This singular expansion platform offers convenience and the integration of numerous HR services.
How does INS Global EOR manage your outsourcing and business expansion needs in Paraguay? Here is how:
1
We first meet to discuss your hiring and outsourcing requirements so as to develop a custom solution for your needs.
2
Next, we provide your business with a legal entity so you can start hiring in Paraguay or dispatch your current workers there.
3
We immediately take on legal and administrative responsibilities for your employees and manage your payroll.
4
You manage and supervise your employee’s everyday contributions in Paraguay while we take care of administrative tasks.
A Professional Employer Organization (PEO) in Paraguay shares similarities with an Employer of Record provider. In fact, most EOR services also offer PEO solutions. Still, both services retain crucial differences, as described below:
Professional Employer Organization (PEO) | Employer of Record (EOR) |
A PEO is responsible for your HR functions, including payroll management, tax, and legal regulation compliance for employees of other companies. | An EOR company becomes the legal employer for employees and helps other companies to hire employees and oversee HR-related tasks. |
PEO is only partially responsible for some employment-related liabilities with the client company. | An EOR is solely responsible for employment and recruitment liabilities. |
The employment contract is between the client and its employee. | Although the client directs the employment contract, it is made directly between the EOR partner and the employee. |
Check Our Labor Law Guide
Employment contracts in Paraguay are either verbal or written. An employment contract may be verbal for domestic service, temporary work not more than 90 days, or a contract for work not exceeding minimum wage in value. Otherwise, the employment contract should be in writing.
Such contracts should be written in Spanish, with the agreed salary in the local Paraguayan guaraní currency.
There are three models of employment contracts in Paraguay:
The employment contract should contain the following employee and employer details:
The Paraguayan Labour Code allows a probation or trial period in the initial stage of employment. Employers can assess workers’ skills and verify their suitability for the contracted work. The duration of this probationary period is as follows:
The labor law requires an employer or employee to provide a dismissal notice to the other party before terminating the employment contract. Either party may terminate the employment contract through a written notice or equivalent payment in lieu.
This is the required notice period for terminating an indefinite-term contract, depending on the worker’s length of service:
An employer can ask workers to continue working with the same terms and conditions during the notice period but may take up to 2 hours of daily leave during working hours to look for a new job.
In case of dismissal without just cause, the employer must pay an indemnity equal to 15 days’ wages for each year of service.
The Labour Code and other relevant acts mandate severance payment as described below when an indefinite employment contract is terminated by an employee for specific reasons outlined in the law:
Working Hours In Paraguay
The normal working hours in Paraguay are 8 hours a day and 48 hours per week during the daytime.
Night work (work done between 20:00 PM and 06:00 AM of the following day) is paid at 130% of standard wages.
Workers involved in dangerous and hazardous work or work that is carried out in hazardous conditions cannot work for more than 6 hours per day and 36 hours per week.
The total working hours, including overtime, may not exceed 11 hours daily. The maximum overtime hours are 3 hours a day and 9 hours a week.
This limit does not apply to managers, administrators, and workers without direct supervision or workers whose presence alone is required. However, these individuals cannot be required to work more than 12 hours a day and are entitled to a rest break of 1.5 hours.
Overtime workers are entitled to overtime pay at the following rate:
The government fixes a minimum wage rate every 2 years, and no worker in Paraguay can be paid less than this mandatory minimum rate of pay. Currently, Paraguay’s minimum wage is 2,289,324 Paraguayan guaraníes per month.
Public Holidays in Paraguay
Employees in Paraguay are eligible for the following 13 paid public holidays:
Employees working on official holidays are entitled to receive wages at a premium rate of 200% of the normal hourly wage rate.
Annual Leave in Paraguay
An employee is entitled to a paid annual leave as described below:
Sick Leave in Paraguay
Employees with a justified illness may take medical leave at 50% of their salary. Paraguayan employees get 3 days of paid emergency leave for the death of an immediate family member.
Maternity/ Paternity Leave in Paraguay
Maternity leave in Paraguay is provided as follows:
The law provides for 2 weeks of paid paternity leave to male workers on the birth of a child. This leave is paid by the employer.
The social security system in Paraguay is managed by the Instituto de Previsión Social (IPS). The IPS provides social security benefits and services like retirement, healthcare, disability, and unemployment benefits to eligible individuals and their dependents.
Employers are mandated to register their employees in the system. Employers and employees in Paraguay both pay an amount per pay period equivalent to a percentage of the employee’s salary, 16.5%, and 9% respectively.
The income tax is on a Pay As You Earn system, which means that employers are obligated to deduct such taxes before paying salaries.
Income tax and corporate tax are both charged at 10%.
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faqs
No, it is necessary to use a local entity abroad to comply with each country labor law.
Staffing firms and umbrella corporations are third-party options for hiring independent freelancers in Paraguay, directly or indirectly.
Most independent contractors in Paraguay are self-employed or run small enterprises. According to the country’s law, these contractors should be hired in accordance with a work agreement rather than an employment contract.
Hence, independent contractors in Paraguay can provide a CV, portfolio, verified references, and possibly a signed NDA.
Several visa types are available for employees wishing to work in the country. The common visa types for employees in Paraguay include:
Employees in Paraguay are entitled to a state pension, severance payment, public holidays, paid leave (sick leave, annual leave, and parental leave), and health insurance.
The Labour Code in Paraguay mandates severance payment for the termination of an indefinite employment contract for reasons outlined in the law as described below:
A Global Employer of Record is an effective solutions for companies like yours that are looking to expand a workforce abroad effortlessly.
This approach allows you to outsource the international hiring process quickly and efficiency, providing access to a global talent pool while still managing payroll compliance in each country.
Public Holidays Calendar
Paraguay
| Date | Day | Holiday | Notes |
| 1 January | Wednesday | New Year’s Day | |
| 1 March | Saturday | Heroes’ Day | |
| 17 April | Thursday | Maundy Thursday | |
| 18 April | Friday | Good Friday | |
| 1 May | Thursday | Labour Day | |
| 14 May | Wednesday | Independence Day | |
| 15 May | Thursday | Independence Day Holiday | |
| 12 June | Thursday | Chaco Armistice Day | |
| 15 August | Friday | Founding of Asunción | |
| 29 September | Monday | Boquerón Battle Victory Day | |
| 8 December | Monday | Virgin of Caacupé Day | |
| 25 December | Thursday | Christmas Day |
Download the PDF Guide