Why Paraguay Is One of Taiwan's
Last Allies in the World

"Paraguay is the only country left in South America — and one of only a handful anywhere — that still maintains full diplomatic relations with Taiwan instead of Beijing."

Most people evaluating a second residency never think to ask about a country's diplomatic alliances. For Taiwanese nationals, though, it's a detail worth knowing: Paraguay is one of the last countries on earth that formally recognizes Taiwan — the Republic of China — as a sovereign state, rather than the People's Republic of China.

A Relationship Going Back to 1957

Paraguay established formal diplomatic relations with the Republic of China in 1957, and that relationship has survived nearly seven decades of changing governments on both sides. Taiwan maintains a full embassy in Asunción, and Paraguay maintains one in Taipei — a level of formal, functioning diplomatic infrastructure that most countries in the region simply no longer have with Taiwan.

Over the decades, the relationship has included ongoing technical and agricultural cooperation programs run through Taiwan's International Cooperation and Development Fund (ICDF), along with trade and investment ties between the two countries.

A Shrinking List — And Paraguay Keeps Its Place On It

Beijing has spent decades pressuring the small number of countries that still recognize Taiwan to switch allegiance, and it has largely succeeded: over the years, several of Paraguay's regional neighbors — including Nicaragua, Panama, the Dominican Republic, El Salvador, and Honduras — have all switched recognition to the People's Republic of China. Paraguay has consistently chosen not to, making it the only country in South America that still formally recognizes Taiwan, and one of only a small number of nations worldwide that do.

What This Actually Means If You're Taiwanese and Considering Residency

The diplomatic relationship isn't just symbolic — it changes the practical experience of dealing with Paraguayan institutions as a Taiwanese national:

• A functioning embassy relationship. Taiwanese citizens can access direct consular support and formal government-to-government channels in Paraguay — something not available in most other Latin American countries, where Taiwanese nationals often have to work through unofficial or third-country channels.
• Smoother document recognition. Because the two governments formally recognize each other, authentication and legalization of Taiwanese documents for use in Paraguay tends to involve less friction than in countries with no official relationship.
• The same core offer as every other nationality. Paraguay's territorial tax system — 0% on foreign-sourced income — and its accessible residency process apply equally regardless of nationality. The diplomatic relationship doesn't change the program; it removes friction that Taiwanese applicants might otherwise run into elsewhere.
• A foothold for Taiwanese business. The decades-long trade relationship gives Taiwanese entrepreneurs a more established starting point for setting up a company in Paraguay, including through the SUACE investor residency route.

Conclusion

For most nationalities, Paraguay's appeal comes down to tax treatment and how little bureaucracy stands between them and a Cédula. For Taiwanese nationals, there's an additional layer: a genuine, nearly 70-year diplomatic relationship that most other residency destinations simply can't offer.