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Overview of Paraguay

Paraguay is a land-locked country in South America. Due to its locating it is known as Corazón de Sudamérica – the Heart of South America. The capital is Asunción and the country has a population of 6.95 million. Almost a third of the countries population lives in the metropolitan area around the capital. The official languages are Spanish and Guarani. The motto of Paraguay is “Peace and Justice”. Paraguay has been a member of the United Nations since October 24th, 1945. This makes it one of the UN’s original 51 member states. Paraguay has enormous water resources and over 99% of its energy is hydroelectric energy. Over 95% of the population over 15 can read and write.

Paraguayans are conservative, traditional people who strive for tranquillity. For a business meeting, Paraguayans may be 10-20 minutes late but visitors are expected to be on time. Personal relations are more important than expertise and so take time to engage in small talk and getting to know your business partners. Negotiating and decisions take time, so be patient.

Currency of Paraguay

  • Guarani

Health Insurance and the Social Security system of Paraguay

In Paraguay there are 3 major health provider networks. The Ministry of Health – Ministerio de Salud y Bienestar Social – MSBS, owns and operates it own network of clinics and hospitals. It delivers free healthcare to all populations. The Institute for Social Security – Instituto de Prevision Social – IPS is in charge of the employed. It is financed through a contributory system financed by employees and employers. The IPS is in charge of social security, medical services, retirement and pensions. Medical services also cover the employees’ families which provides medicine, hospitals and other specialized services. The IPS also covers work/occupational illnesses, work accidents, death and it provides pensions. Lastly there is the private healthcare sector that is insurance and fee-for-service based.

Employer cost of Paraguay

The cost for an employer to hire someone in Paraguay is a plus of 16.50% to the gross salary.

Salary and bonuses of Paraguay

Employees can be paid weekly, bi-weekly or monthly. They have to be paid at least once a month.

A 13th monthly wage is mandatory. It is paid at the end of the year.

Commissions, incentives, and bonuses are variable and will be agreed upon directly with the employer.

Public Holidays in Paraguay

  • January 1st – New Years Day
  • March 1st – Hero’s Day
  • moveable – Easter (maundy Thursday and Good Friday)
  • May 1st – Labour Day
  • May 15th – Independence Day
  • June 12th – Chaco Armistice Day
  • August 15th – Founding of Asuncíon
  • September 29th – Boqueron Battle Victory Day
  • December 8th – Virgin of Caacupe
  • December 25th – Christmas

Working Hours in Paraguay

Office hours are from 7:30am to 5:30pm, Monday to Friday.

A regular work week is 48 hours.

If overtime is done during regular daytime hours, it is compensated with 150% of the regular hourly wage. If overtime is done during night hours of public holidays, it is compensated with 200% of the regular hourly wage.

Vacation in Paraguay

In Paraguay, the amount of annual leave an employee gets depends on how long the employee has been with the company. In the first years, an employee receives 12 days of annual leave. If the employee has been with the company for over 5 years, he/she receives 18 days of annual leave. If the employee has been with the company for over 10 years, the employee receives 30 days leave.

Sick Leave in Paraguay

When one falls ill with a justified illness in Paraguay, the employer pays 50% of the sick leave while social security (IPS) pays the other 50%.

Termination/Severance in Paraguay

When terminating an employee in Paraguay, it must be with a written notice. The notice period is 1 day. If an employee has been with the company for less than 10 years, they can be terminated with or without a just reason. If the employee has been with the company for 10 years, he/she can only be terminated for just cause.

An employee who is terminated with just cause receives no severance pay. If the employee was terminated without just cause, he/she is entitled to 15 days of severance pay for every year of service.