Paraguay was promoted as a safe haven for a world gone wrong. This week, about three million of its bank customers could not reach their money.
Why people were interested in Paraguay
For a few years now, I have watched North Americans and Europeans look at Paraguay as somewhere to go if things went wrong at home. Low taxes, easy residency, and a quiet place for their money. AP called it a regional haven for investors, and that is how it was being sold.
But what happened on 2 November is a reminder that political stability and a mature financial system matter more than tax rates and quick residency when a family is choosing where to live.
The bank crumbled. Then the government shook.
On 2 November, the central bank voted to put Ueno Bank into resolution, and officially seized it early on 3 November, locking about three million customers out of their accounts in a country of six million.
Savers marched on Congress. The central bank president resigned. Within four days the president had announced his resignation and the Senate had opened an impeachment trial.
It is cool to be trendy, but it is better to be safe and stable
Investment migration sometimes follows trends. When a jurisdiction becomes fashionable, the pitch focuses on what is offered. It does not always look at how safe, sustainable or stable that offer is.
I say this as part of this industry, with real respect for the advisers, family offices and private banks who guide families every day. The question is where the weight should sit.
The bank is only the example. What a family is exposed to is the country around it: whether banks are supervised at arm’s length, whether courts enforce contracts and property rights, whether the regulator is independent of the people it oversees, and whether politics can absorb a shock without everything moving at once. In Paraguay, one failure put the regulator, the pension system and the presidency in question within a week.
Looking good on paper is not a track record.
Sometimes traditional is best
Traditional jurisdictions can look boring next to the latest trend. They are slower, more demanding and rarely the cheapest. What they offer is harder to find: stability.
Canada, the United States, New Zealand, Portugal and Greece have a stable rule of law, a track record of changing their rules predictably and sound banking systems. Above all, they offer stability for the whole family.
These programs also change over time, but the updates are mostly predictable, and they are always made under a long-standing rule of law and stable courts. When the United States raised the EB-5 investment amount in 2022, petitions already filed kept the old amount. When Greece decided to raise its Golden Visa property thresholds in 2024, it gave investors about five months, until 31 August 2024, to commit under the old rules, and later extended the deadline to complete those purchases to February 2025.
This is what track records look like. Before advising a family on any jurisdiction, I would ask three questions:
- Has the country kept its word to investors when its rules changed?
- Do its courts and institutions work the same way whoever is in power?
- Will it still be a stable, safe place for this family in twenty years?
Families are not buying a program or a tax rate. They are choosing a new place to live, a new home for them and their kids. They need to know they can rely on its institutions and its rule of law, now and for the next generation.
Eterna International is part of Eterna Group, which traces its roots back to 1928. We plan in generations, not transactions. That is why Paraguay’s crisis matters to us. It is a reminder that stability is often wiser than the latest trendy jurisdiction.
Looking good on paper isn’t sufficient. A track record is.