The legal system of Paraguay
A civil-law system under the 1992 Constitution, drafted after the fall of the Stroessner dictatorship and built to prevent its recurrence: it bans presidential re-election outright. Paraguay is officially bilingual in Spanish and Guaraní, the only country in the Americas where an indigenous language is spoken by a majority and used in the courts, and interpretation into Guaraní is a practical requirement in much of the country.
Legal tradition
Paraguay belongs to the civil law tradition. A civil-law system under the 1992 Constitution, drafted after the fall of the Stroessner dictatorship and built to prevent its recurrence: it bans presidential re-election outright. Paraguay is officially bilingual in Spanish and Guaraní, the only country in the Americas where an indigenous language is spoken by a majority and used in the courts, and interpretation into Guaraní is a practical requirement in much of the country.
How power is divided
Unitary with seventeen departments and the capital district, each with an elected governor and departmental board holding administrative and limited fiscal competence. Legislative power is national.
Where law comes from
- Constitution
- Followed in rank by ratified treaties, then statutes.
- Statutes of Congress
- Codes are enacted as ordinary statutes.
- Codes
- Civil Code (1987), Penal Code (1997), Labour Code, Code of Criminal Procedure (1998).
- Case law
- Not binding; Supreme Court doctrine is persuasive.
The legal profession
A law degree and registration of the title with the Supreme Court, which maintains the roll and exercises discipline. Bar membership is voluntary. Because both Spanish and Guaraní are official, courts must provide interpretation, and practitioners outside Asunción are commonly bilingual.
Law by topic in Paraguay
- Property & LandEscritura pública and Dirección General de Registros Públicos inscriptionReal property transfers require a public deed before a notary and inscription in the Dirección General de Registros Públicos, which perfects the right against third parties. Foreigners face restrictions on rural land within 50 kilometres of the border under Ley 2532. Land tenure disputes and informal occupation of rural land remain significant practical issues.
- Criminal Law1997 Código Penal with adversarial procedure under Ley 1286The Código Penal of 1997 and the Código Procesal Penal (Ley 1286/1998) established an accusatorial oral system with the Ministerio Público directing investigation and guarantee judges supervising. The codes drew heavily on German doctrine through the influence of Paraguayan scholars trained in that tradition.
- Civil ProcedureWritten Código Procesal Civil with amparo inside the same codeThe Código Procesal Civil (Ley 1337/1988) provides a predominantly written process with ordinary and summary tracks, and it also contains the procedural rules for amparo. Mediation is available through judicial mediation offices. Enforcement proceeds by executory process on qualifying titles such as judgments and notarised instruments.
- Family LawCódigo Civil marriage with de facto unions after four yearsMarriage is governed by the Código Civil and Ley 1/1992 on the spouses' equal rights, which reformed the marital property regime. A unión de hecho between a man and a woman acquires marriage-equivalent effects after four years of stable cohabitation. Same-sex marriage is not recognised. Divorce was legalised in 1991 by Ley 45.
- Immigration & NationalityLey 6984 of 2022 replaced the 1996 migration lawLey 6984/2022 modernised Paraguayan migration law, administered by the Dirección General de Migraciones. It restructured residence categories and simplified permanent residence, which Paraguay has long granted relatively readily. Mercosur nationals have a dedicated route, and residents obtain a cédula de identidad para extranjeros.
- Constitutional Law1992 Constitution with bilingual official languagesThe 1992 Constitution followed the end of the Stroessner dictatorship and establishes a unitary presidential republic. Spanish and Guaraní are both official languages, a distinctive recognition of an indigenous language spoken by most of the population. The Corte Suprema's Sala Constitucional rules on unconstitutionality actions, and amparo is available for urgent rights protection.
- Tax LawThe 10-10-10 model: 10 percent corporate, VAT and personal taxParaguay is known for the simplicity and low level of its taxes. Ley 6380/2019 consolidated the system: corporate income tax (IRE) at 10 percent, VAT (IVA) at 10 percent with a reduced 5 percent rate, and personal income tax (IRP) at 8 to 10 percent. Dividends attract a separate distribution tax. Taxation is territorial in principle.
- Business & CorporateSAS incorporation and a maquila regime for export manufacturingCompanies are formed under the Código Civil and Ley 1034 on merchants, with the sociedad anónima and SRL as traditional vehicles. Ley 6480 of 2020 created the empresa por acciones simplificada (EAS), allowing single-shareholder electronic incorporation. Paraguay's maquila regime under Ley 1064 taxes qualifying export manufacturing at 1 percent of value added.
- Employment & LabourCódigo del Trabajo with aguinaldo and 15 days' severance per yearThe Código del Trabajo (Ley 213/1993) governs employment. The ordinary week is 48 hours. Dismissal without just cause entitles the worker to 15 days' pay per year of service plus notice graduated by seniority. An aguinaldo equal to one twelfth of annual earnings is payable by the end of December.
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