Businesses thinking about expanding into new markets should consider the investment opportunities available in Latin America, especially in the Southern Cone region. Hiring and recruitment outsourcing in Paraguay, in particular, stands out. It is an emerging economy with a dynamic and tech-savvy workforce. This makes it an attractive destination for foreign companies and investors seeking untapped markets.
Paraguay has many attractive features, including an open economy with an extraordinarily low corporate tax rate, the lowest in Latin America at only 10%. In addition, recent immigration reforms have streamlined the residency process for foreigners. There is also a wide range of hiring and recruitment outsourcing in Paraguay.
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Not surprisingly, many foreign investors and companies are intrigued by the prospect of starting a business in Paraguay, taking advantage of its favorable business environment and the plethora of hiring and recruitment outsourcing in Paraguay. Biz Latin Hub can help you with this here or anywhere else in the region, with 18 dedicated offices across Latin America and the Caribbean.
What is hiring and recruitment outsourcing in Paraguay?
Hiring and recruitment outsourcing is when a company transfers all or part of its recruitment needs to a third-party recruiter.
If you have decided that Paraguay is the place to expand your business, you will be searching for local talent to handle sales, marketing, accounting and payroll, regulatory compliance, law, and human resources. As a foreigner, you might be in a new and unfamiliar territory, where hiring talent can be a challenge, especially when there is a language barrier.
If this is the case, it could be prudent to seek out the services of an individual or business that specializes in hiring the best talent on behalf of their client firms. Recruitment outsourcing in Paraguay guarantees you will be introduced to the top talent – people you may not have found otherwise.
What are the benefits of hiring and recruitment outsourcing in Paraguay?
Contracting the services of a third-party recruiter offers many benefits besides helping a company navigate cultural and language barriers. What follows are five advantages to hiring and recruitment outsourcing in Paraguay:
1. Reduced cost – The main benefit of hiring and recruitment outsourcing in Paraguay is its cost-effectiveness. When hiring in-house, it is common to see your overall recruiting costs skyrocket due to small payments, like advertising, accumulating. If you outsource, you will only have to pay your partner.
2. Time savings – Hiring can be a tough process. Finding the right candidate for every role is not easy, especially if you don’t know the ins and outs of the country you are in. According to a study from Deloitte, it takes an average of 94 days to hire highly educated professionals such as scientists, engineers, and researchers. A specialized outsourcing company that is familiar with best practices in the country can greatly reduce the time spent looking for qualified candidates, as they will already know what to do and where to look.
3. Scalability – After setting up shop in a new country, you might need to scale up and down on hiring if business needs change. Your recruitment needs will vary over time, especially when your company is growing. Outsourcing hiring and recruitment is an ideal way to adapt to these types of fluctuations.
4. Reduced commitment – Outsourcing your hiring and recruitment needs can also bring benefits by freeing up your energies, so you can focus on something else. Filling up positions becomes the recruiter’s job, so you can continue to focus on developing your core business.
5. Compliance with hiring regulations – Paraguayan laws might be very different from those in your home country. One of your priorities should be ensuring compliance with the labor and recruitment laws. Failure to comply may result in penalties or fines. Hiring and recruitment outsourcing in Paraguay eliminates this burden, since the recruiter should have extensive cross-jurisdiction knowledge to mitigate any labor-related risks.
FAQs about hiring and recruitment outsourcing in Paraguay
In our experience, these are the most common queries we receive from our clients that are considering hiring and recruitment outsourcing in Paraguay.
Yes, a business can be 100% foreign-owned by either legal persons (legal entities) or natural persons (individuals).
You have the option to employ someone in Paraguay either by establishing your own legal entity within the country and utilizing it for hiring purposes, or by engaging an employer of record (EOR). An EOR, a third-party entity, enables you to recruit employees in Paraguay by serving as the legal employer. When using an EOR, you do not need a Paraguayan local entity to hire employees.
A standard Paraguayan employment contract should be written in Spanish (and can also be in English) and include the following information:
– ID and address of the employer and employee.
– City and date.
– Service location. .
– Description of tasks to be performed.
– Remuneration and bonifications/commissions (if applicable).
– Frequency and method of payment. .
– Duration of the contract.
– Probationary period.
– Working hours.
– Additional benefits (if applicable).
The mandatory employment benefits in Paraguay are the following:
– Working tools necessary to carry out the work (if applicable).
– Payment of social security contributions (health, pension, and labor risks).
– Social benefits (service premium, severance pay, and interest on severance pay).
– Paid time-off (vacation and Sunday rest).
– Disabilities (common or labor origin).
– Transportation allowance (if applicable).
– Overtime and surcharges (if applicable).
For more information on mandatory employment benefits read our recent article on employment laws in Paraguay.
The total cost for an employer to hire an employee in Paraguay can vary based on the salary structure. This is because the employer is responsible for covering 16.5% of the social security contributions, and the employee’s salary is subject to a 9.5% retention for social security purposes. The specific amount will depend on the employee’s earnings and work hours.
Please use our Payroll Calculator to calculate employment costs.
Biz Latin Hub can help you with hiring and recruitment outsourcing in Paraguay
At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in Asunción, as well as over a dozen other major cities in the region. We also have trusted partners in many other markets.
Our unrivaled reach means we are ideally placed to support multi-jurisdiction market entries and cross-border operations.
As well as knowledge about hiring and recruitment outsourcing 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 do business in Latin America and the Caribbean. If this article on hiring and recruitment outsourcing 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.
