The German minority in Paraguay came into existence with immigration during the industrial age. The "Nueva Germania" colony was founded in Paraguay in 1888; though regarded as a failure, still exists despite being abandoned by many of its founders in the 1890s. Paraguay and South America in general was a popular place for German leaders accused of war crimes to retreat after the second World War.
Also, there is a large minority of German descendants living in the department of Itapúa, mainly in the Departmental Capital, Encarnación and the German town of Hohenau. Most of the Germans who settle in this region came from the larger German colonies from neighboring Brazil and Argentina.
Another large group of Germans who immigrated to Paraguay are Russian Mennonites, Germans who immigrated to Russia under the rule of the ethnic German Czarina Catherine the Great. Russian Mennonites are different from another German-Russian group, the Volga Germans, through religion and reasons of immigrating to Russia. Russian Mennonites are religious Mennonites while the Volga Germans are religious Lutherans and Roman Catholics. Russian Mennonites went to Russia for purposes of freedom of worship, while the Volga Germans went for economic reasons and land.
When the Communists came to power in Russia, the German-speaking population were persecuted by the new Soviet Government. Some Russian Mennonites saw Paraguay as a perfect place to settle because it looked isolated. The government of Paraguay wanted settlement in the Chaco region, which was under dispute with its southern neighbor, Argentina, and its western neighbor, Bolivia. The move to Paraguay was difficult for the Russian Mennonites, because they were new to the climate. Some Russian Mennonites left Paraguay for neighboring Argentina, where they met many Volga Germans, who decided to settle in Argentina to escape the persecution in Russia. The situation changed and the Russian Mennonites began to prosper in Paraguay.