The Hell That Is Banking in Paraguay

I totally relate to your banking experience. Sadly, in Paraguay it is not what you know that counts, but WHO you know. You have to cultivate connections, which takes time and often excludes outsiders. Paraguay is not a foreigner-friendly place to do business. I also found that out by personal experience.

I'm Paraguayan and I live here, and I get pretty ashamed every time I explain the banking situation to a foreigner. They usually don't believe it's true, until they've tried it.
I must also say that it's not just not foreigner-friendly, but also it's not for anyone who wants to do things in the right way from the very beginning.

Some of my theories would be

1) Because of the massive underground economy there they don't want foreigners (especially Americans/Canadians) coming in and exposing their hidden secret world to the outside world, as they are making lots of money from the underground economy that they don't need tourists per say (the people in power I mean). The local people without power live a quiet life and don't care either way about tourists either.
2) There may be a secret cultural thing that does not trust the white man and would rather not deal with him. This distrust of the white man goes back hundreds of years.
3) People in power there have a mentality that they want (after strossener) to claim for themselves the old totalitarian ways and be almost worshiped as was strossener in a way, and if you don't almost do obeisance to them they will feel the demented need to punish you in any way they can by inflicting trouble for you, this may go back to how they viewed popes acting hundreds of years ago, and they want to be seen as popes themselves deep down and have their "rings kissed" before they "bless" you with some favor.  The concepts of customer service are not widespread in Paraguay, it is more a respect and secrecy culture.
4) People in power there are terrified little slave children to the pathetic state called the USA and its global lust for world control, and Paraguay uses the USD in most everything and doesn't want to get blacklisted by the USA and its banking system. I advise them to gtfo of the usa and into the new AIIB banking transfer system of Asia so they don't have to be pathetic little slaves to the dictates of Americans like they are now.  I am researching how I can get into it myself so I don't ever for the rest of my natural life ever have to deal with the USA ever again.

I am in the process of moving there but I honestly don't even know how to get money in there safely and don't know if I ever will as it just seems too unsafe. I may be forced to rent instead of buy there for this very reason as I don't have the money to survive if I was scammed out of house buying money sitting in a bank there or being transferred through one there from my country.

While the underground (or informal…) economy is a big chunk of the overall economy it's not really a big secret nor do you need a secret decoder ring to participate.   Getting money down here is rather easy actually, as long as your not either a money launderer or trying to do re-occurring transfers as Joel was/is.   

But Seeking Paraguay, I'd suggest you need to take a deep breath because you'll find the same banking tie in's down in Paraguay as in the US or Canada.   And really dude, you are really "over thinking"  this Paraguayan mentality as being so different from you thing.   While it may seem exotic to some, Paraguay is much like any other Lat Am country except a bit poorer and with an overall population that is a bit more cohesive than most, as the majority of the population are from the same Euro/Indian racial mix that has existed here since the 1600's.   

They don't pander to tourists or outside investors for sure, this is due mainly because when compared to the surrounding countries there really isn't any thing worthwhile "touristy" stuff to do here and there is very little to invest in here either (unless your into large scale soy farming or beef ranching).  So you got to be really bored to come here as a tourist or really desperate or stupid to come here to make money.   

Most of us come here because it's cheap to live here compared to just about any other place, the locals are friendly, crime rate is low (at least serious, deathly crime) and the government doesn't hassle with you much (either from incompetence or design is debatable, but result is the same).

Hello thank you, but would you please address Joel's article specifically then give specific exact reasons for why you think all these things happen there. Generalities don't provide real reasons, nor do they provide solutions to very basic expectations such as Joel has.

A cross topic similarity in American culture may be the question: Do you think there are no real hidden reasons that are not spoken in public as to why certain groups of people are burning down entire cities in the USA now like Baltimore?  Do you not think that there are very strong hidden belief systems that these people have which allow them to do such things on such a widespread level? Do you think I am "thinking too much". I don't think so, people do things for reasons, most of which they are not going to tell you openly about. 

Personal example, I spent 1 1/2 hours in a dentist last week listening to what was basically just double speak from a woman Dentist wanting to "save face". Promise after promise of surgery I need to get done, turned into after 1  1/2 hours to be just lies, her trying to cover for her contradictions, and finally when I asked her upon leaving point blank "so just tell me, you really are afraid of doing this for me and just want me to find someone else don't you?" She round about admitted I was right. People do all sorts of things to people and most never have the guts to admit the real reasons, I am absolutely convinced what happened to Joel includes many of these kinds of things and if anyone here has any insights into the possible reasons and posts them, they may help Joel find solutions to what should be very simple expectations.

While Joel is a friend, I can't speak for him.  Suffice it to say he has my respect for attempting, and making work, a whole new business venture here that foreigners don't normally do.  I understand that he has since his last post found a new bank and solved his money transfer woes though.

While I can be pretty verbose, I think your asking for a dissertation well beyond the scope of a post on this site.  I'll simply state that you must keep in mind that Paraguay IS the third world, not the first world in terms of business, commerce and organization.  If you come here with 1st world attitudes of "how things should be done" your going to be an abject failure and be miserable.   The blogs and sites like this are littered with examples of this.  My favorite failure story is of some European guy who tried multiple ventures and couldn't figure out why he always failed.  He said "Paraguay will destroy your soul".   He was right, if you come here thinking your going to do business the way you do it in Europe, Asia or N. America.   And it's not because there's some vast conspiracy or that Paraguayan's are stupid or have it out for the gringo's, it's just because there reality is different here.

Look a the history of the place, they were fully isolated by their leaders policies from their nations' founding till the mid 1800's.   Then they were destroyed economically and as a nation via the Triple Alliance War and didn't recover till the early 1900's.   Add in the fact that they have no real tourist attraction compared with their neighbors, very little economic opportunity for outsiders and a very "poor" government and corresponding infrastructure and you have a country that is very much behind it's neighbors and the 1st world.

The government takes in little revenue.  They just instituted a personal income tax which will bring in some cash, but much of this will be siphoned off by the corrupt officials between the tax collected and any government spending attempts.   Again, it's the "third world" and while everyone here loves to talk about a growing economy and opportunity it's more eye wash than reality.   A building boom is going on now in Asuncion with a huge increase in prices in real estate.  But the nice new buildings are mostly empty upon completion, go figure.

Banking, commerce and gov't regulation are not "for" foreign investment or international business,  so the deck is stacked against most outsiders coming into the country to make money.   They say Paraguay is the "country of friends" and this can be taken to mean everyone is friendly to stranger here (true mostly) but I think it REALLY means that the way you get ahead or get things done is by having "friends" in the right places.  If you don't your screwed (this is a typical third world thing by the way, not just a Paraguayan thing).

Bottom line is that you shouldn't consider Paraguay as a place to live unless the following is true of your abilities- 1.  You have an outside source of income not dependent on Paraguay (internet, pension, etc..)    2.  You are capable of taking care of yourself and your own without gov't assistance or a "social safety net" (as there isn't any here).   3.  You are capable of dealing with a crazy, slow and bureaucratic gov't and official institutions (bank/business's) that aren't very effective.

I can't comment on N. America craziness as I don't live there anymore.  I saw how things were going there a few years ago and didn't like the "go go" rat race quality of life there.  Paraguay suited us much better and is by far a safer, saner and cheaper place to live and raise kids.   Others would disagree.   But they ignore or don't meet those 3   above listed rules I wrote in past paragraph.

I do believe you have the right approach..... (majbjb - contributor)

One goes to live in Paraguay for the cheaper cost of living, the low local income tax charged (10%) on local income, zero income tax for earnings abroad Paraguay, the low crime rate for violent crimes, and the friendly reception from the Paraguayans, however, you are indeed a FOREIGNER in their country, locally competing for their jobs or whatever, are your intentions, you are, though, in direct competition with them!

Unless you can show, that you are bringing more jobs, truly participating in their economic development and helping their insertion into the global economic world.  In this case, Paraguay has a lot to offer to potential investors or residents, even for new citizenship´s  applicants.

I suggest you take a look into this program, so called "PROGRAMA DE LA INDUSTRIA MAQUILADORA DE EXPORTACIÓN - LEY Nº 1.064/97" directed to industrials who really want to invest in Paraguay, with a range of benefits to do so.

I have not, however, researched further, for example what does this country offers, regarding the services or professional areas, but, again, I do believe if your intentions are to live in Paraguay, you have, for sure, do your homework, and a very thorough research will bring all the necessary findings to support your decision.   

Hope you find your way in Paraguay.