After company formation in Paraguay, you will need to find employees. However, this is not always easy for a new entrant to the jurisdiction, meaning you should seek specialist advice. A good recruiter in Paraguay will have expert knowledge of the local market and an established recruitment network to tap into, so should be able to find strong candidates quickly. Foreign investors and companies can take comfort in the idea that hiring trends in Paraguay are looking good, and that the future holds promise. Economists predict that the Paraguayan economy will grow at a steady pace over the coming years.
Key takeaways
| Key sectors in Paraguay | The biggest employer in Paraguay currently is the agricultural sector. But in urban areas, the most sought-after positions are in the tech sector – jobs such as software developers, programmers, full-stack developers and engineers. |
| Steps to hiring in Paraguay | A local advisor can help you with: Job adverts Networking CV assessment Interviewing Contract writing Onboarding |
| Legality of PEO in Paraguay | It is legal to hire employees using a PEO payroll providor in Paraguay. |
| Minimum wage in Paraguay | The current minimum wage as of January 2025 is Gs$2,798,309 (aprox USD$350). |
| Employer contributions in Paraguay | 16.5% must be paid of an employee’s gross salary. |
What sectors are best for hiring in Paraguay?
The biggest employer in Paraguay currently is the agricultural sector. But in urban areas, the most sought-after positions are in the tech sector – jobs such as software developers, programmers, full-stack developers, engineers, etc. – so much so that demand outpaces supply.
Sub sectors such as e-commerce and fintech have great potential in Paraguay as there is a strong demand for services like this. This means they are projected to grow rapidly, depite currently being quite small compared to regional powers such as their neighbors in Argentina and Brazil.
Four factors contributing to hiring trends in Paraguay
The 4 factors that contributes to current hiring trends in Paraguay are:
- Increase in formal employment
- Opportunity for foreign investors to fill a business vacuum
- High demand for IT/tech related jobs
- High level of English proficiency
Below are some of the reasons why you should consider hiring trends in Paraguay:
1. Increase in formal employment
Paraguay’s economy is still dominated by the informal economy. Most citizens work like this every day so they can scrape together just enough to survive. Around 64 percent of the population doesn’t have a formal job that contributes to social security or taxes.
However, this has started to change in the last few years, as the formal sector continues to grow with each passing day. Between 2008 and 2015, 300,000 formal jobs were added to the economy, compared with an increase of 144,000 informal jobs.
2. Immense opportunity for foreign investors
Not many Paraguayans work for large national companies, much less foreign ones. A study by the International Labor Organization revealed that only 5 percent of salaried employees in Paraguay work for a company larger than 50 people.
The country nonetheless boasts a large, educated labor pool with no shortage of talent. And since there are few large companies in Paraguay, small to medium-sized enterprises (SMEs) that incorporate there have a better chance of cornering the market in their respective industry and will have the best workers in the country to choose from.
3. High demand in IT/tech related jobs
The biggest employer in Paraguay currently is the agricultural sector. But in urban areas, the most sought-after positions are in the tech sector – jobs such as software developers, programmers, full-stack developers, engineers, etc. – so much so that demand outpaces supply.
Foreign companies that set up shop in Asunción, the capital of Paraguay, should have no problem finding tech talent. The hiring trends in Paraguay in the tech sector are similar to outsourcing in Bogota, Colombia a few years ago, reflecting the growing power of Paraguay.
4. High English proficiency level
The hiring trends in Paraguay have also been positively influenced by the fact that many people in the country possess some level of English proficiency. Paraguay ranks fourth in South America in terms of English proficiency, above important countries like Peru and Chile.
How much it costs to hire people in Paraguay
The cost of hiring in Paraguay is less than it would be in richer nations, yet workers are often well qualified and skilled. With significant investment in education over a number of years, the Paraguay now has a surfeit of graduates in the labor market that it cannot provide local jobs for. This means that the labor market in Paraguay is relatively competitive for an incoming prospective employer.
The minimum wage in Paraguay is Gs$2,798,309 (aprox USD$350). However, this is not necessarily the rate that you should be offering. In top sectors that require qualified and skilled workers, you will need to offer at least market standard rate. A local hiring expert in Paraguay will be invaluable in making sure that you are not overpaying or offering unattractive rates that make it hard to recruit quality talent.
Employers in Paraguay must make social security contributions equal to 16.5% of an employee’s wage. The employer must withhold tax at a rate of 9.5% of an employee’s remuneration. There is also an aguinaldo system, which means a 13th salary must be paid annually as a yearly bonus.
Two options for hiring: establish a company or PEO
When entering the market and hiring in Paraguay, there are essentially two options available to investors and entrepreneurs. The most common way of doing so is through full company formation to establish a presence in the jurisdiction. However, this may take time and effort, meaning that it is worth considering another option as well, using a Professional Employer Organization (PEO).
PEO: fast and agile
A Professional Employer Organization (PEO), also known as a ‘Registered Employer’ or ‘Employer of Record’, is an organization that provides and supports companies with their human resources functions, from the early stages of recruitment to the payment of taxes and benefits. PEOs undertake the fundamental and time-consuming tasks of human resources teams, allowing companies to focus on the growth and success of their business.
The services of a PEO are particularly useful when businesses seek to hire a local workforce but do not wish to establish a local legal entity. Simply put, a PEO makes it easy to hire staff in Paraguay through an outsourced provider.
It means you can enter the market and start hiring quickly, without having to commit to full entry until you are sure that it is what you want to do. It is worth noting that regionally there is beginning to be more regulation and PEO in Paraguay may not be viable in the future.
The long-term option: direct hiring
This is the gold standard of hiring in Paraguay, as it will give you full control over your employees as well as being sure that you will be compliant for the long term. It also gives you a higher status with potential job applicants, who will see you as a more secure long-term employer.
Before you start hiring employees in Paraguay, you will first need to get a sense of the legal, financial and cultural lay of the land. Things such as how to sort out the red tape associated with incorporation and how to manage payroll, for example. With a permanent legal presence in Paraguay, you will be fully liable for compliance with local law.
A local expert will help when hiring in Paraguay, as they will have an extensive network of qualified professionals for top jobs as well as a good idea of the local labor market. They will be able to advise on the best rates to offer and what type of profile you should be targeting. With anti-discrimination legislation important in Paraguay, especially for top jobs, they can make sure you are making a fair offer which complies with local law.
After placing adverts and receiving applications, you will want to move towards interviewing potential candidates. This should be done by both a team manager and HR representative at minimum, to make sure that everything is watertight in legal terms. You may want to include other people into the process in order to make a better assessment of the candidate.
It is entirely possible that you may wish to have a second interview, possibly involving other team members as discussed above. It is also common in the region and when hiring in Paraguay to provide candidates with an aptitude task to be completed. This usually takes the form of a dummy task that simulates the type of job that will be done in the future and confirm that they possess the skills cited on their CV.
Contracts, too, will be important. A local advisor will be up to speed on what you can and cannot offer. Bear in mind that you will have to follow all the rules established by the country. In Paraguay, this includes making sure that a short-term contract has clear termination conditions.
Finally, your local advisor will be able to help you with the stages of both the hiring and onboarding process. They will make sure that you comply with standard requirements such as compulsory medical checks and make sure that any probation period is within the boundaries of those established by the labor law in Paraguay. This is generally between one and three months depending on the type of role but can sometimes last for four months in the case of highly-qualified employees. .
Labor laws and regulations in Paraguay
Before making a move into the jurisdiction, it’s important for companies to understand the labor rights and responsibilities of both employers and employees in Paraguay. What follows are a few things that foreign business owners should know about when it comes to the local work culture:
- Work hours – The standard workday in Paraguay is eight hours, with the standard workweek up to 48 hours.
- Public holidays – There are 11 public holidays in Paraguay each year.
- Vacation time – Workers in Paraguay are eligible for 12 days of vacation annually, rising to 18 after a years’ service and 30 after a decade. Women are entitled to 18 weeks’ maternity leave.
- Contract types – There are essentially two types of contract in Paraguay, indefinite employment and fixed-term employment
FAQs on hiring trends in Paraguay
Based on our extensive experience these are the common questions we receive from clients when looking to hire in Paraguay.
1. Why hire talent in Paraguay?
Hiring in Costa Rica offers access to a large talent pool that is located in the same time zone as the North American market, is culturally similar, and is more economical. The combination allows a company to complement an existing North American based team or to establish an independent nearshoring center within the region.
2. Can I hire top talent in Paraguay?
Yes, you can hire top talent in Costa Rica, often at more competitive prices than in your local market.
3. What is the level of English for professionals in Paraguay?
The hiring trends in Paraguay have also been positively influenced by the fact that many people in the country possess some level of English proficiency. Paraguay ranks fourth in South America in terms of English proficiency, above important countries like Peru and Chile.
4. How many software developers are there in Latin America?
The Association of Computer Science and Information Technology states that there are over 2 million tech professionals within Latin America.
Hiring in Paraguay offers access to a large talent pool that is located in the same time zone as the North American market, is culturally similar, and is more economical. The combination allows a company to complement an existing North American based team or to establish an independent Nearshoring center within the region.
Yes, you can hire top talent in Paraguay, often at more competitive prices than in your local market.
The level of English in Paraguay may not be the highest, but in key white collar sectors it is much better. University graduates are expected to complete English language proficiency to at least an intermediate level.
4. How many software developers are there in Latin America?
The Association of Computer Science and Information Technology states that there are over 2 million tech professionals within Latin America.
Why invest in Paraguay?
Situated at the heart of the continent, Paraguay arguably has one of the most privileged geographical positions in South America.
It borders Brazil, Argentina, and Bolivia, and it’s very close to Uruguay, which makes it a bridge between larger economies and is a member of the powerful Mercosur trading bloc.
Paraguay’s economy has been prone to erratic peaks and troughs over the years, but it shows a general tendency towards modest growth.
While Paraguay’s GDP doesn’t grow at a high rate, it also doesn’t dip drastically, which helps blunt the severity of an economic crisis, like the one brought on by the COVID-19 pandemic which is one of many factors that shape hiring trends in Paraguay.
The country also benefits from plentiful natural resources and a commerce-friendly taxation system. On top of that are the Free Trade Zones which are explicitly designed to attract FDI.
Biz Latin Hub can help you with hiring in Paraguay
At Biz Latin Hub, we offer a comprehensive range of market entry and back-office solutions across Latin America and the Caribbean.
With offices in key cities across the region, along with trusted partners in other markets, our extensive reach makes us well-suited to support cross-border operations and multi-jurisdiction market entries.
As well as knowledge about hiring in Paraguay, our portfolio of services includes hiring & PEO accounting & taxation, company formation, bank account opening, and corporate legal services.
Contact us today to find out more about how we can assist you in finding top talent or otherwise doing business in Latin America and the Caribbean.
If this article on tips for hiring in Paraguay was of interest to you, check out the rest of our coverage of the region. Or read about our team and expert authors.
