Wealth management in Paraguay: CDAs, the exchange and funds

A wealth market that is still shallow

Wealth management in Paraguay, sometimes called private banking, covers the private client services of local banks, brokerage houses and fund managers supervised by the Banco Central del Paraguay, mainly through deposits, bonds and funds in guaraníes or dollars. The capital market is small and dominated by bank deposits and corporate and government bonds, and some wealthy families place international assets with private banks outside the country.

For Paraguay wealth management, the capital market is small and dominated by bank deposits and by corporate and government bonds. Some wealthy Paraguayan families in fact place their international assets with private banks located outside the country.

The Superintendencia de Valores, the new market authority

Law 7162 of 2023 replaced the Comisión Nacional de Valores with a Superintendencia de Valores within the Banco Central del Paraguay. It licenses and supervises brokerage houses, fund managers and investment advisers.

Bolsa de Valores de Asunción and brokerage houses

Paraguayan securities trade on the Bolsa de Valores de Asunción through licensed brokerage houses known as casas de bolsa. The market mainly offers corporate bonds, government securities and a few shares, often issued in dollars.

CDAs and term deposits at the core of local portfolios

For many affluent savers, wealth management in Paraguay starts with laddered CDAs in guaraníes and dollars. Only the portion below the guarantee fund ceiling is protected if a bank fails, so large sums are often spread across banks.

Mutual funds and investment funds

Paraguayan wealth management also uses funds: fund management companies offer money market mutual funds and investment funds in dollars or guaraníes. Clients should read the fund rules, the investment policy, the fees and the redemption terms before subscribing.

Diversifying outside Paraguay

A resident investor often wants international assets. The investor compares the sometimes limited offer of local banks with that of foreign custodians, taking into account Paraguayan tax on capital income and the obligations of the country of residence.

Wealth advice and private banking at Banco Continental

A wealthy client can approach Banco Continental for support combining deposits, CDAs, local bonds and financing for farming or property activities. The client checks the entry threshold, the fees and the adviser's status with the supervisor.

Property and farmland in the overall wealth

A large share of the biggest Paraguayan fortunes is invested in land and cattle. A bank managing the financial side of that wealth therefore also looks at these assets, particularly when they are used to secure loans.

Source of funds and enhanced review

Paraguayan managers apply enhanced due diligence to politically exposed persons and to funds coming from border areas. A newcomer must provide the history of the wealth: business sales, inheritances, professional income and earlier statements.

French residents: declare and anticipate CRS

A French tax resident holding a portfolio in Paraguay declares each account on form 3916 and reports the related income. Paraguay's commitment to apply CRS makes this transparency all the more necessary.

How to choose a manager for wealth management in Paraguay

The first criterion is status. Check that the bank, brokerage house or fund manager is licensed and supervised, by the Banco Central del Paraguay for banks and by the Superintendencia de Valores for market intermediaries. Ask for written confirmation of the licence, and for the status of the adviser who will follow you, before handing over funds or documents.

Then, for private banking in Paraguay, compare the nature of the service: advice, delegated management or simple order execution. Ask for any entry threshold, management fees, transaction fees, fund redemption charges and exit terms. A clear offer also states the currencies available, guaraníes or dollars, and how risks are explained to the client.

Lastly, question the manager on the range actually accessible. The local market is small and dominated by deposits and bonds, so choices may be limited. A serious adviser says so frankly, presents the risks of each product and promises neither a guaranteed return nor protection beyond the guarantee fund ceiling.

Source of funds and documents for a wealth management account in Paraguay

Managers apply enhanced due diligence, especially to politically exposed persons and to funds coming from border areas. Prepare the history of your wealth: business sales, inheritances, professional income and earlier bank statements. The better ordered and verifiable these items are, the more smoothly the bank or manager can carry out the review without repeated requests.

Beyond the origin of funds, the file includes an identity document, proof of address, proof of your residence status and, as the case may be, the RUC number if there is a taxable activity. Foreign documents may need translating. Ask the institution for the exact list before starting, because it varies with the bank and the nature of the service.

Also expect an investor profile. Intermediaries must understand your objectives, investment horizon and risk tolerance before proposing a product. Keep a copy of signed questionnaires and agreements, as you can refer to them in case of disagreement.

Common mistakes with private banking in Paraguay

The first mistake is to believe that deposits are protected without limit. Only the portion below the guarantee fund ceiling is protected if a bank fails, so large sums are often spread across several institutions. Find out the ceiling in force and how it applies to each depositor and each bank.

The second mistake is to subscribe to a fund or product without reading its rules. Investment policy, fees, redemption terms and reference currency must be understood before committing. If a document is not available in a language you master, ask for a reliable translation rather than signing on trust. Haste is a poor adviser in investment matters.

A resident may be taxed on capital income from Paraguayan sources, and income from a portfolio held abroad generally has to be reported in the country of residence. Have each type of income checked by a local accountant and keep all the statements detailing interest, coupons and capital gains.

Local or foreign custodian: CRS, FATCA and reporting

A resident investor often wants international assets while the local offer remains limited. He or she therefore compares Paraguayan banks with foreign custodians, taking fees, protections and above all reporting duties into account. A portfolio held in several countries complicates follow-up, so a summary table of all your accounts is useful.

Automatic information exchange, notably CRS and FATCA, explains the banks' questions about tax residence. Paraguay has committed to apply CRS, which makes transparency all the more necessary. Check your obligations with your tax authority and avoid any offer that claims to guarantee total confidentiality.

Before entrusting funds to a wealth management account in Paraguay, compare at least two institutions, check their status with the regulator and ask for the terms in writing. If your wealth also includes land or cattle, tell the manager, who will take these assets into account in the overall analysis. Independent advice from a local accountant or lawyer is a useful complement to the decision.

Before choosing a manager for wealth management in Paraguay, compare what each provider actually offers in guaraníes and dollars, and ask who holds the assets in custody. Prepare evidence of the source of your funds in advance, since the origin of wealth is reviewed more closely.

Avoid the common mistakes: signing a mandate without understanding its fees, and overlooking your own reporting duties. Whether assets sit with a local or a foreign custodian, check how CRS and FATCA reporting applies to you.