Individual vs. EAS for Invoicing Foreign Clients from Paraguay in 2026

Quick answer: for a solo professional working from Paraguay, invoicing as an individual can be simpler and is not automatically less tax-efficient than forming an EAS. An individual is generally subject to personal-service IRP once annual gross taxable service income exceeds G.80 million, with progressive rates of 8%, 9% and 10% on net income. An EAS is taxed under IRE, generally at 10% on net taxable income, and profit distributions can then trigger IDU. An EAS makes more sense when it provides real value through liability separation, reinvestment, partners, employees, scale or corporate contracting.

The right question is not:

“Which structure has the lower headline tax rate?”

It is:

“Which structure fits how I earn, reinvest, take risk and extract money?”

And before comparing an individual with an EAS, one issue must be resolved first: if the work is physically performed from Paraguay, having customers in Spain, the United States, Germany or elsewhere does not automatically make the income foreign-source or remove Paraguayan VAT.

Individual vs EAS: quick comparison

This article compares an individual personal-service provider with an EAS. A Paraguayan “sole proprietorship” can fall under IRE in some cases and should not be confused automatically with a freelancer taxed under IRP-RSP.

1. What does invoicing as an individual mean?

A consultant, developer, designer, adviser, architect, marketer or other professional can provide services directly without forming a company.

The individual:

• signs the contract;
• issues the invoice;
• receives the payment;
• assumes the obligations personally;
• files the relevant personal tax returns.

For independent personal services, the relevant income tax is generally IRP on Personal Service Income (IRP-RSP).

This can be a perfectly suitable structure for a one-person professional activity.

There is no general rule requiring an EAS simply because your clients are abroad or because your turnover has become meaningful.

2. An individual professional is not automatically a Paraguayan “sole proprietorship”

This distinction matters.

Law 6380 distinguishes between:

• personal-service income earned by an individual and subject to IRP where applicable; and
• a sole proprietorship organised with labour and capital, with capital predominating, which can fall under IRE.

So not every freelancer should be treated as an IRE sole proprietorship.

A consultant essentially selling personal knowledge and time is different from a trade business, inventory-heavy operation or other organised activity where capital predominates.

The activity must be classified correctly before comparing an individual with an EAS.

3. How IRP-RSP taxes an individual

Law No. 6380/2019 provides that an individual becomes liable to pay IRP on personal services once annual gross taxable income exceeds:

G.80,000,000.

If the threshold is not exceeded, formal obligations may still exist, but the law states that no IRP-RSP payment is due for that year.

Above the threshold, net income is taxed progressively:

• 8% on the first G.50 million of net income;
• 9% on the portion from G.50,000,001 to G.150 million;
• 10% on the portion from G.150,000,001 upward.

Simple example

If taxable net personal-service income is G.200 million:

• first 50m × 8% = 4m;
• next 100m × 9% = 9m;
• last 50m × 10% = 5m.

Illustrative IRP:

G.18 million.

The effective rate on the G.200 million net income in this example is 9%.

4. IRP deductions are not the same as company deductions

This is one reason why a simple “10% vs 10%” comparison is misleading.

Law 6380 allows, subject to conditions, deductions connected with:

• professional activity;
• equipment and office;
• health;
• education;
• certain personal/family spending;
• housing under statutory conditions;
• a qualifying vehicle under the statutory timing rules;
• other expressly permitted expenditure.

These deductions are subject to documentation, funding-source, location and other conditions.

A company, by contrast, deducts expenses under the IRE business logic: the expenditure must satisfy the rules for generating and preserving the income-producing activity.

A pure solo professional can therefore have a materially different taxable base as an individual than through an EAS.

5. The G.80m IRP threshold is not a VAT exemption

This is a common mistake.

Law 6380 treats individuals providing independent personal or professional services as VAT taxpayers.

Therefore:

G.80 million is an IRP-RSP threshold; it is not a general VAT exemption.

If the service is territorially taxable, VAT must be analysed even where no IRP payment is yet due.

The general VAT rate is 10%.

6. What is an EAS?

The Empresa por Acciones Simplificadas (EAS) was created by Law No. 6480/2020.

It can be formed by:

• one person; or
• several individuals or legal entities.

Once registered, it acquires separate legal personality from its shareholders.

The EAS is a capital company of commercial nature.

It also:

• has no general statutory minimum capital;
• can have one shareholder;
• can issue different classes of shares;
• can receive contributions in cash or in kind;
• provides a more corporate operating framework than direct personal activity.

See our guide to starting a company in Paraguay as a foreigner.

7. A real difference: separate patrimony and liability

Law 6480 provides that once legal personality exists, the EAS answers for its obligations with its own assets.

As a corporate rule, shareholders are liable up to their committed contributions and are not personally liable for company labour, tax or other obligations, subject to specific rules on administrators, fraud, unpaid contributions and other statutory exceptions.

This separation does not exist in the same way when the professional contracts directly as an individual.

Liability separation can matter more than a small tax-rate difference if the activity involves:

• significant contracts;
• professional liability;
• employees;
• suppliers;
• financing;
• debt;
• operational risk.

8. How an EAS is taxed under IRE

An EAS is a separate legal entity and a business taxpayer.

Under IRE General, the rate is:

10% of net taxable income.

In simplified form:

revenue – deductible business costs = net taxable income → 10%.

Unlike individual IRP-RSP:

• there is no G.80m IRP threshold;
• the personal 8/9/10 progressive bands do not apply;
• deductions follow business rules;
• profit belongs to the company until distributed or otherwise lawfully paid out.

See our company-tax pillar on IRE, VAT, IDU and INR in Paraguay.

9. Can an EAS use IRE SIMPLE?

Potentially, where the legal conditions are met.

Law 6380 permits SIMPLE for certain eligible taxpayers, including relevant private entities under Article 2(8), where prior-year income does not exceed G.2 billion and the other statutory conditions are satisfied.

SUACE’s current corporate comparison reflects that an EAS can be under IRE General or SIMPLE where appropriate.

Under SIMPLE, net taxable income is generally determined using the lower of:

• documented real income minus expenditure; and
• 30% of annual gross turnover;

with a 10% tax rate applied to the resulting amount.

But:

• not every EAS automatically qualifies;
• income and activity must be checked;
• profit distribution remains a corporate question;
• RESIMPLE is different and is aimed at qualifying small sole proprietorships, not the ordinary EAS structure.

10. Money in an EAS is not automatically the shareholder’s personal money

This is a fundamental difference.

When an individual invoices directly, the income — after tax and expenses — belongs personally to that individual.

When an EAS invoices, the money belongs to the company.

Value can move from company to shareholder through legally supportable mechanisms such as:

• salary/remuneration where appropriate;
• properly structured service fees;
• reimbursement of genuine business expenses;
• real loans;
• dividends/profit distributions;
• other properly documented transactions.

The company bank account should not be used as the owner’s personal wallet.

IDU on distributions

Where an EAS distributes profits, domestic IDU rates are:

• 8% for a resident recipient;
• 15% for a non-resident recipient;

subject to any applicable treaty limitation.

This means an EAS can add a second tax layer when all profit is extracted as dividends.

11. An EAS becomes more compelling when profits are retained and reinvested

If a solo professional needs to withdraw nearly all annual profit for personal living costs, an EAS can add administration and a possible IDU layer without sufficient business benefit.

If instead part of the profit remains inside the business to:

• hire staff;
• buy equipment;
• build a product;
• fund marketing;
• expand to new markets;
• build working capital;

the company begins to perform a genuine economic function.

Profits kept in reserves or capitalised are not subject to IDU merely because they remain in the company at that stage, subject to the rules that can apply on later distributions or capital reductions.

12. An EAS does not eliminate VAT either

An EAS is a VAT taxpayer on taxable transactions.

If it performs a service from Paraguay that is territorially taxable, a foreign customer does not create an automatic exemption.

Binding Ruling DNIT No. 827/2025 confirmed this for services performed from Paraguay for a Spanish company.

Both an individual and an EAS therefore need to analyse:

• territoriality;
• invoicing;
• VAT debit;
• VAT credit where available.

13. Individual vs EAS does not change the first question: where is the service performed?

For an individual professional, Binding Rulings 828 and 829/2025 confirm that the portion of personal services genuinely performed outside Paraguay for foreign customers can fall outside IRP under the facts analysed.

If the work is performed from Paraguay, the income can be Paraguayan-source.

That conclusion should not automatically be transferred to a company.

Article 6 of IRE contains additional source rules for certain foreign activities and income of business taxpayers.

So choosing an EAS also changes the architecture of the source analysis.

See our full guide to working from Paraguay for foreign clients.

14. The administrative difference is real

Individual

Administration is usually lighter:

• personal RUC and tax obligations;
• invoicing;
• VAT;
• IRP where applicable;
• document retention.

EAS

An EAS adds a separate legal person, which generally means:

• corporate RUC;
• business accounting;
• corporate obligations;
• corporate books;
• shareholder and beneficial-owner documentation;
• properly documented corporate decisions and distributions;
• financial statements where applicable;
• separate bank and cash flows;
• higher accounting/administrative cost.

That extra cost can be entirely justified in a genuine company.

For a very small freelancer, it may simply be friction.

15. Banking: a company can improve segregation, but does not guarantee an account

An EAS provides a formal framework to separate:

• business accounts;
• business revenue;
• company expenses;
• capital;
• shareholder distributions.

This can make an actual business easier to document.

But forming an EAS does not force a Paraguayan bank to approve the company.

The bank can still review:

• business activity;
• customers;
• beneficial ownership;
• source of funds;
• countries involved;
• expected volume;
• economic rationale.

16. Can a foreigner be the sole shareholder of an EAS?

Yes.

Law 6480 allows an EAS to be formed by one or more individuals or legal entities.

SUACE also confirms that foreign shareholders are permitted and that there is no general minimum capital for an EAS.

However, distinguish:

• being a shareholder; and
• being the principal legal representative.

The EAS platform requires the principal legal representative to operate with Paraguayan electronic identity, which requires a Paraguayan ID card.

A foreign shareholder without that identity can use an eligible legal representative and the appropriate power, subject to the current requirements.

Foreign ownership therefore does not itself require the shareholder to become a Paraguayan tax resident.

17. When invoicing as an individual often makes sense

An individual structure deserves serious consideration where:

• you are the only professional;
• you primarily sell your own knowledge and time;
• you have no partners;
• you do not need outside capital;
• contractual risk is limited;
• you do not plan a significant team;
• you need most of the profit personally;
• you want lighter administration;
• IRP deductions fit your situation.

This does not mean “individual is always better below a certain revenue”.

Liability and growth plans matter as well.

18. When an EAS often makes sense

An EAS has a stronger thesis where:

• there are one or more partners;
• you want corporate liability separation;
• you will hire staff;
• a meaningful part of profit will be reinvested;
• the business needs capital;
• customers prefer contracting with a company;
• IP or assets should belong to the company;
• you may sell shares or admit investors;
• the business needs continuity beyond the founder;
• IRE/SIMPLE is appropriate after a full review.

At N30 Paraguay, we would not recommend an EAS solely because “10% IRE sounds lower than IRP”. For many solo professionals, the isolated tax difference can be small or even negative once IDU and administration are considered.

19. Four practical cases

Case A: solo consultant billing three European clients

The consultant works personally from Asunción, has no employees and uses most income for personal living expenses.

An individual structure should be analysed before forming a company. IRP-RSP, VAT and personal deductions may provide sufficient structure with lower administration.

Case B: agency with four employees

There is a team, recurring contracts, client liability, business costs and reinvestment.

An EAS has a clearer purpose: separate patrimony, employ staff, retain capital and operate under an independent business identity.

Case C: developer wants to retain earnings to launch a SaaS

If all profit is not required personally, an EAS can make it easier to keep capital inside the company for product development, marketing and hiring.

The analysis should compare IRE, potential SIMPLE, VAT and later profit distributions.

Case D: consultant invoices entirely through an EAS but pays all personal expenses directly from the company

The structure is being operated badly.

Separate legal personality requires separation of personal and corporate spending. A payment by the company is not automatically a deductible business expense or a tax-compliant shareholder extraction.

20. You can start as an individual and form an EAS when the business justifies it

You do not always need the final structure on day one.

A professional can begin directly and later move contracts and operations into an EAS when there is:

• more retained profit;
• employees;
• partners;
• risk;
• corporate customers;
• investment needs.

The transition still needs to be done properly.

It is not enough to start issuing invoices from another RUC. Review:

• contracts;
• customers;
• assets;
• intellectual property;
• VAT;
• outstanding invoices;
• bank accounts;
• employees;
• closing or modifying personal tax obligations.

10 common mistakes

1. “An EAS always pays less tax than an individual”

No. Compare IRP, IRE, IDU, deductions and administration.

2. “IRP is always 10%”

No. Personal-service rates are progressive: 8%, 9% and 10%.

3. “Below G.80m I have no taxes”

That threshold concerns IRP-RSP payment. VAT and other obligations are separate.

4. “If I create an EAS, all company money is mine”

No. The money belongs to a separate legal person.

5. “The EAS can pay my personal expenses and deduct them”

Not automatically. Business expenses must meet tax requirements.

6. “10% IRE replaces IDU”

No. IDU can arise later when profits are distributed.

7. “EAS = RESIMPLE”

No. RESIMPLE is aimed at qualifying small sole proprietorships. An EAS may analyse General IRE or SIMPLE where available.

8. “Foreign client = 0% VAT”

There is no blanket rule of that kind.

9. “A foreign shareholder must be Paraguay tax resident”

No. Shareholding and personal tax residence are separate questions.

10. “Form the company now and decide the business reason later”

The legal form should follow the business model.

Frequently asked questions

Can I invoice foreign customers as an individual in Paraguay?

Yes. There is no general rule requiring a company simply because the customer is abroad.

When does an independent professional pay IRP?

Law 6380 requires IRP-RSP payment when annual gross taxable personal-service income exceeds G.80 million, with progressive 8%, 9% and 10% rates on net income.

Below G.80 million, do I avoid VAT?

No. The G.80m threshold belongs to IRP-RSP. Independent personal/professional services have separate VAT treatment.

What tax does an EAS pay?

An EAS can be subject to IRE, generally 10% on net taxable income under the general regime, plus VAT and IDU when profits are distributed.

Can an EAS use SIMPLE?

Potentially, where the EAS is within the eligible taxpayer category and meets the income ceiling and other statutory conditions.

Can an EAS use RESIMPLE?

RESIMPLE is designed for qualifying small sole proprietorships and is not the ordinary EAS regime.

What happens when an EAS distributes profits?

In addition to IRE already paid by the company, distributions can trigger IDU at 8% for a resident recipient or 15% for a non-resident, subject to treaty rules.

Can I keep money inside the EAS?

Yes. A company can retain and reinvest profits. Later distributions must follow corporate and tax rules.

Can a foreigner be the sole EAS shareholder?

Yes. Law 6480 permits one or more members. Legal representation and electronic identity have separate requirements.

Is there a minimum capital for an EAS?

SUACE confirms there is no general statutory minimum capital, although the declared capital should be coherent with the business and contributions must be made under the legal rules.

Does an EAS protect all my personal assets?

The company has separate legal personality and shareholder liability is limited as a rule. This does not eliminate specific liability for administrators, fraud, unpaid contributions or other statutory cases.

What is better for a freelancer: individual or EAS?

For a solo professional who withdraws most income and has limited business risk, an individual structure may be simpler. An EAS becomes more compelling with reinvestment, staff, partners, liability, growth or corporate-contracting needs.

Do not turn a professional activity into a company unless you know which problem the company solves

An EAS is an excellent tool when there is a real company.

But forming one for a solo professional solely because:

“Paraguay has 10% IRE”

is incomplete analysis.

Compare:

1. personal IRP;
2. deductions;
3. VAT;
4. company IRE;
5. SIMPLE where available;
6. IDU on distributions;
7. accounting cost;
8. legal risk;
9. reinvestment;
10. growth objectives.

If the company solves liability separation, hiring, capitalisation, reinvestment or scale, it is probably doing a real job. If it exists only to change the name printed on an invoice, review whether it is adding value.

Official sources and last review

Last reviewed: August 2026.

• DNIT — Law No. 6380/2019: IRP, IRE, IDU and VAT.
• BACN — Law No. 6480/2020 creating the EAS.
• SUACE — current EAS FAQs.
• SUACE — EAS, SA and SRL comparison.
• DNIT — Binding Rulings 827, 828 and 829/2025.

This article compares an individual personal-service provider with an EAS. Not every individual activity is necessarily taxed under IRP-RSP: certain organised sole-business activities can fall under IRE. Correct activity classification comes before choosing the legal structure.