Quick answer: Paraguay offers one of the cheapest, most accessible residencies in Latin America — entry-level temporary residency for a few hundred dollars, no income requirement, and territorial tax. Costa Rica costs far more to enter. But these two are not really competing for the same job: Paraguay is a low-cost paper Plan B most holders never live in, while Costa Rica is a place people actually relocate to. Choose based on whether you want a status or a home.
Ready to talk specifics? Book a strategy call and we will map your situation against the options below.
What Paraguay offers
Since Law 6984/2022, temporary residency requires no proof of income, investment or deposit, with government fees totalling roughly $363 — genuinely among the most accessible entry points anywhere. Permanent residency now follows two years of temporary status. The old $5,000 deposit shortcut to immediate permanent residency was removed; investor routes under Resolution 0283/2026 grant direct permanent residency from $70,000 (productive SUACE track), $150,000 (tourism) or $200,000 (real estate or financial instruments). Paraguay is territorial-tax and allows citizenship consideration after several years.
What Costa Rica offers against it
A materially higher entry cost — $150,000 investor, or income routes at $1,000–2,500/month — but in exchange, an established place to live: healthcare, international schools, a large expat community, a natural environment people seek out, and proximity to the US. Costa Rica is not trying to be the cheapest residency. It is trying to be a livable one.
The distinction that actually matters
Be honest with yourself about what you are buying. A great many Paraguay residencies function as a low-cost insurance policy — a legal status held for optionality, banking, or a tax argument, by people who have no intention of living in Asunción. That is a legitimate and sensible use, and if it is your use, Paraguay is hard to beat on price.
Costa Rica is bought overwhelmingly by people who intend to spend real time there. The higher cost buys infrastructure you only value if you actually show up: the school your children attend, the hospital you rely on, the community you join. Paying Costa Rica prices for a residency you will never live in makes little sense; paying Paraguay prices and expecting Costa Rica lifestyle makes none.
Where each genuinely wins
Paraguay wins on pure cost and accessibility for a paper Plan B, and for those who want a cheap territorial-tax residency and citizenship track without a large outlay.
Costa Rica wins for anyone relocating in fact rather than on paper — the lifestyle, healthcare, schooling and proximity justify the premium precisely because you will use them.
A test to tell which one you actually need
Since these serve different purposes, the useful exercise is diagnostic. Ask yourself three questions. How many nights a year will I realistically sleep in this country? Do I need its healthcare and schools, or just its legal status? And is my goal a life, or an insurance policy?
If your honest answers are "very few," "just the status," and "an insurance policy," Paraguay is almost certainly your answer — cheap, accessible, territorial-tax, and never intended to be lived in by many who hold it. Paying Costa Rica prices for that use would be irrational.
If your answers are "many," "the healthcare and schools too," and "a life," then Paraguay low cost is a false economy — you would be buying a status you cannot use for the things that matter, and Costa Rica premium buys exactly the infrastructure your answers say you need. The mistake is choosing on price without first answering which product you are buying.
What the low Paraguay cost does and does not include
Being precise prevents disappointment. Paraguay entry-level temporary residency is genuinely cheap — government fees around $363, no income requirement since 2022 — but permanent residency now requires two years of temporary status first, and the old $5,000 instant-permanent deposit shortcut was removed in 2022. The investor routes that grant direct permanent residency start at $70,000 (productive SUACE), $150,000 (tourism) or $200,000 (real estate). So the headline cheapness applies to a temporary status that converts slowly, not to instant permanence.
Costa Rica higher cost, conversely, buys into a system built around actual residence — which is why the two rarely belong in the same sentence except to clarify that they are solving different problems.
Frequently asked
Is Paraguay really that cheap to enter?
Entry-level temporary residency government fees are around $363, with no income requirement since 2022 — genuinely low. Permanent residency now requires two years of temporary status first, or an investor route from $70,000.
Can I get a paper residency in Costa Rica the way I can in Paraguay?
Not comparably. Costa Rica routes require real investment or verifiable income, and it is designed around actual residence rather than a nominal status.
Do both avoid tax on foreign income?
Both are territorial and generally do not tax foreign-sourced income. US citizens remain US-taxable. The tax argument alone rarely justifies choosing where to actually live.
Which leads to citizenship faster?
Both have multi-year naturalisation paths with their own conditions. If citizenship is the goal, compare the specific residence and presence requirements with counsel rather than the entry price.
Can I hold a Paraguay residency without living there?
Its presence requirements are light, which is much of why it functions as a low-cost optionality play. Many holders spend little time there. Confirm current maintenance rules with counsel, as they have evolved.
Would you ever recommend Paraguay over Costa Rica?
For a pure paper Plan B held for optionality or a tax argument, without intent to live there, Paraguay is hard to beat on cost and we would say so. For an actual relocation, Costa Rica infrastructure justifies its premium.
Is Paraguay territorial-tax like Costa Rica?
Yes — both generally exempt foreign-sourced income, and US citizens remain US-taxable under either. The tax similarity is real, which is why the decision usually turns on whether you want a lived-in base or a low-cost paper status rather than on tax alone.
How long until citizenship in each?
Both have multi-year naturalisation paths with their own residence and presence conditions. If citizenship is the goal, compare the specific requirements with counsel rather than the entry price, which is where the two diverge most.
Which suits a genuine full-time relocator better?
Costa Rica, in most cases — its infrastructure, healthcare and schooling are built for people who actually live there, which is precisely what its higher cost buys. Paraguay strength is a low-cost status for those who will not.
Where to start
Decision-stage questions are best answered against your actual numbers, timeline and family situation rather than a general article. Book a strategy call and we will tell you plainly whether Costa Rica fits — and, if it does, which route and structure suit you. If a country other than Costa Rica is the better answer for you, we will say so.
This article is general information, not legal, immigration, tax or investment advice. Program terms and figures change and are applied to individual facts; those cited were accurate at the time of writing and should be confirmed. Engage qualified counsel and your own tax adviser before acting.