ACZALAW Nicaragua

GENERAL INFORMATION ON NICARAGUA

hdmedia — Wed, 11 Oct 2023 17:19:31 +0000

GENERAL INFORMATION ON NICARAGUA

YEAR 2023
Territorial Extension	130,373.47 square kilometers
Population	6,733,763 habitants
Economically Active Population	53.8% of the total population
Urban population	57.6%
Occupancy rate	65.90%
GDP	US$ 15.671.6
GDP Per Cápita	US$ 2.327.3
Currency	Córdoba (C$ 36.4719 x US$ 1.00 as of July 31, 2023)
Annual inflation	11.6%
Annual devaluation	2.0%
Traditional exports	US$ 3.878.9 millon
Free zone exports	US$ 3.852.0 millon
Family remittances	US$ 3.224.9 millon
Political System	Republican Democracy
Form of Government	Presidential
Political-Administrative Division	15 departments and 2 autonomous regions
President	Daniel Ortega Saavedra

Minimum salary
Agricultural	US$ 142.56
Manufacturing Industry	US$ 191.69
Electricity, gas and water, commerce, restaurant and hotels, transportation, storage and communications	US$ 261.49‎ ‎ ‎
Construction, financial and insurance establishments	US$ 319.04
Free Zone	US$ 222.18
Average Cost of Energy ($ / kWH)	US$ 0.1915

PRINCIPAL MACROECONOMIC INDICATORS BEHAVIOR

Years	2017	2018	2019	2020	2021	2022
Economic Activity
GDP at constant prices (annual percentual variation)	4.6	(3.4)	(2.9)	(1.8)	10.3	3.8
GDP per capita (annual percentual variation)	2.7	(6.5)	(3.5)	(1.2)	10.4	9.6
Affiliation to Nicaraguan Social Security Institute (Average annual percentual variation)	6.6	(10.5)	(10.2)	(2.8)	6	4
Open Unemployment (Annual Average)	3.7	5.5	5.4	5.0	4.5	3.5

EXCHANGE RATE AGAINST THE DOLLAR

The exchange policy established by the Central Bank consists of a scheduled annual slide of 2% of the value of the Córdoba against the dollar. Pursuant to this policy, the official exchange rate on March 1, 2023 was C$ 36.3211 córdobas per dollar and it is scheduled to close on December 31, 2023 at C$36.6243 per $1 US.

However, the Central Bank has announced a change in this policy for 2024 and there will no more devaluation of the Córdoba, but a fixed exchange rate to the dollar.

The government affirms that there is sufficient monetary stability, which is reflected in a series of macroeconomic indicators and it is a reality that the black-market exchange rate has remained controlled, below the official exchange rate, so that from 2024 the exchange policy will remain with a fixed exchange rate.

FREE CURRENCY CONVERTIBILITY

In Nicaragua the system of free convertibility of the currency operates. There are no restrictions to buy or sell dollars, there is exchange freedom. Leases, remittances, loan payments, income, are allowed freely through private financial institutions.

FREE REPATRIATION OF CURRENCY

The Nicaraguan financial system is integrated into the international financial system. There is free repatriation of foreign currency, businessmen can repatriate dividends, pay international loans or make purchases abroad for goods and services, without any type of restriction, within the framework of compliance with the measures recommended by the Financial Action Task Force (FATF or GAFI) for the control and prevention of money laundering.

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GENERAL REGULATIONS THAT COMPANIES MUST COMPLY WITH

hdmedia — Wed, 11 Oct 2023 17:18:58 +0000

REGULACIONES GENERALES QUE DEBEN CUMPLIR LAS EMPRESAS EN NICARAGUA

CONSIDERADAS COMUNES Y RECURRENTES

This section does not pretend to be a complete manual of the obligations and compliance with laws, rules, bylaws, circulars, and in general a series of regulations that companies operating in Nicaragua must comply with for them to be in order with the country's legislation and regulations. It is a reference as a guide, which cannot replace the legal advice of the lawyer, to be reviewed on a case-by-case basis in attention to your line of business and commercial sector.

We have organized it by areas: corporate, tax, labor, social security obligations and some specific ones for regulated sectors: Free Trade Zones and Call Centers; health.

RECURRING CORPORATE COMPLIANCE OBLIGATIONS

Rule or Source	Purpose	Activity to present	Time of presentation (periodicity)
Law # 698 "General Law of Public Records "	Updating of the Registry of the Final Beneficiary and of the changes in the shareholding composition of the company.	EXTRAORDINARY: When any change occurs that modifies or reforms the constitutive agreement, that affects the basic information and the determination and identification of the F.B.	Within a period of no more than 30 days after the change occurred for national companies and 60 days for foreign companies
Law # 698 "General Law of Public Records "	Updating of the Registry of the Final Beneficiary and of the changes in the shareholding composition of the company.	ORDINARY: The company must submit an update report on the Final Beneficiary annually, whether or not there have been changes in the F.B. or in the basic information of the company	At the end of the year of registration. Its validity is a calendar year as regulated by the applicable regulations. Its renewal is annual.
Deed of Incorporation of a Public Limited Company and Bylaws / Code of Commerce.	Meetings of the General Shareholders' Meeting	Minutes of the Ordinary Meeting of the General Shareholders' Meeting for the approval of the annual report and Financial Statements	Ordinary: Within the first 3 months after the close of the fiscal year. Or on the date or period provided for in the articles of incorporation and bylaws.
Law # 698 "General Law of Public Records "	Registration of Administrative Bodies (General Meeting of Shareholders and Board of Directors). When there are changes or before the election of the board of directors expires.	Submit a request for registration of the Deed of Protocolization of the Minutes where the Administrative Body is elected (General Shareholders' Meeting or Board of Directors)	At the time of Protocolizing the Certificate of Minutes where a change in the shareholding percentage of the partners was made, change of partners and/or the Board of Directors of the company was elected.
Deed of Incorporation of a Public Limited Company and Bylaws / Code of Commerce.	Election of Board of Directors	Prepare Minutes of Election/Renewal of the Board of Directors	At the expiration of the Period or before if there are changes of partners that affect the current meeting.
Law # 698 "General Law of Public Records "	Registration of the Deed of Incorporation of a Public Limited Company and Bylaws	Submit the Deed of Incorporation of the Public Limited Company and its Bylaws in the corresponding Public Registry
Law # 698 "General Law of Public Records "	Registration as a Merchant and registration of merchant books	Submit application for registration as a merchant and merchant books for its due reason and seal in the Public Registry of Managua	It can be presented together with the deed of incorporation of the company or as an act followed by its registration.
Law # 698 "General Law of Public Records "	Registration of Amendments and/or Modifications to the Articles of Incorporation and/or Bylaws	Submit application for registration of Amendments and/or Modifications to the Articles of Incorporation and/or Bylaws	At the time of obtaining the certification of the sentence authorizing the modification and/or amendment. All amendments must be registered. Only three acts require judicial approval, the rest are agreements between shareholders that are notarized and submitted to the registry.

PERMANENT COMPLIANCE TAX OBLIGATIONS

(Used abbreviations: Ctr: TC Tax Code (Código Tributario; LCT: TCL Tax Coordination Law (Ley de Concertación Tributaria); ALMA: Municipality of Managua (Alcaldía de Managua)

Rule or Source	Purpose	Activity to present	Time of presentation (periodicity)
Law # 562 "Tax Code"	Registration in the Single Taxpayer Registry	Request registration in the Single Taxpayer Registry (Registro Único del Contribuyente) of the city where commercial operations will be carried out.	Within 30 days after the registration of the Deed of Incorporation of the Public Limited Company and its Bylaws
Arto. 50 Excise Regime ALMA –Administrative Procedure	Payment and renewal of registration by Accounting Registry. Annual	Declare and pay 2% of the Income for sales or services calculated based on the average of the last quarter of the year. This payment is made directly at the collection offices of the corresponding Municipal Mayor's Office.	Deadline to present this statement is January 31st of the following year. The first registration is made based on 1% of the social capital established in the deed of incorporation.
Arto. 50 Excise Regime ALMA –Administrative Procedure	Statement and Payment of the Municipal Income Tax (IMI).-Monthly	Prepare sales report (Cash or Credit), payment of 1% is made on income plus payment for waste tax	Must be paid during the first 15 business days of each following month
Arto 134 Commission and late submission of statements	Statement and Payment of Withholding at Source. -Monthly	Incorporation of the detail of the withholdings made during the previous month ended in the Electronic Tax Window (VET). Payment is made immediately through electronic banking or directly at bank branches.	Monthly: First 5 business days of the following month
Arto 134 TC Commission and late submission of statements	Statement and Monthly Payment of Taxes (VAT and IR Advance). - Monthly	Incorporation of the following reports in the Electronic Tax Window (VET): 1.- A Sales Report must be prepared either (Cash and Credit) for the previous month. Report invoices for purchases or services provided by creditors/suppliers. 2.- 1% of Income for sales or services (Cash or Credit) is declared and paid. Payment is made immediately through electronic banking or directly at bank branches.	Monthly: First 5 business days of the following month
Arto 56 TCL Forms of payment, advances and IR withholdings.	Statement and payment of Income Tax IR.- Annual	Incorporation of the following reports in the Electronic Tax Window (VET): 1.- Detail of Balance Sheet accounts at the end of the year. 2.- Detail of year-end Result accounts. Payment is made immediately through electronic banking or directly at bank branches	Annual Statement deadline is February 28th of each year. Closing of the annual fiscal year.
Arto 126 Types of administrative infringement	Updating of Accounting Books. -Monthly	The financial information of the company is recorded, operations that are carried out during a determined period -each month closing- When the accounting is kept in an electronic system, this must be authorized by the DGI	This activity should be done monthly.
Arto 43 CT- Terms	Safeguarding documentation and accounting information	The safeguarding of the physical or electronic information supporting the company's accounting and fiscal activity is mandatory for auditing purposes. Pursuant to art. 43 TC The DGI in its audit may require accounting documentation from 6 years ago	Accounting information must be kept up-to-date continuously -daily-
Tax Coordination Law	Income statement from work	Presentation of work income withholding form	The first 5 calendar days of each month
Tax Coordination Law	Payment of Road Tax for Vehicles	An annual payment must be made for each motor vehicle, under the concept of "Road Tax ".	On January, every year.
Municipality Excise Regime	The environmental guarantee granted by the Managua Mayor's Office must be renewed annually, the only requirement is the payment of the basic rate.	The renewal of the environmental guarantee is a prerequisite for the renewal of the municipal registration	Accounting

LABOR OBLIGATIONS OF PERMANENT COMPLIANCE

Rule or Source	Purpose	Activity to present	Time of presentation (periodicity)
Arts. 19, 20 and 23 of Labor Code	Individual Written Work Contract with each collaborator	Work Contract	At the start of the employment relationship
Arts. 50 and 51 of Labor Code	Work day of collaborators	Verify that the daytime work shifts are 8 hours a day and 48 hours a week, the mixed shift is 7½ hours a day and 45 hours a week, and the night shift is 7 hours a day and 42 hours a week.	During the employment relationship
Arts. 57 and 62 of Labor Code	Work during national holidays is considered overtime	Verify that collaborators who work during national holidays are being paid for the day as overtime	During the employment relationship
Art. 86 of Labor Code; Work Contract	Salary payments	Verify that the salary is paid in the manner and time agreed in the employment contract	During the employment relationship
Art. 76 of Labor Code	Vacation. Collaborators are entitled to 15 days of vacation for every 6 months of work	Prepare and comply with Vacation Calendar	During the employment relationship
Arts. 93, 94 and 95 of Labor Code	Thirteenth Month. It must be paid within the first ten days of the month of December of the current year	Verify that it is paid within the legal period	During the employment relationship
Art. 95 of the Labor Code (by analogy) and labor jurisprudence	Settlement Payment. Once the employment relationship has ended, the collaborating person must be paid their settlement within a period of 10 days.	Verify that the settlement is paid within the legal period	At the end of the employment relationship
Art. 98 of Labor Code; Art. 36 of the Law 763 Law on Rights of Persons with Disabilities	Hiring people with disabilities. Companies with 50 or more workers, include at least 2% of people with disabilities on their respective payrolls.	Verify that personnel with disabilities have been hired according to the corresponding percentage	During the employment relationship
Art. 2 of Decree 975 Regulation of the Social Security Law	Registration of the employer to the Social Security Institute (INSS)	Enrollment sheet	One time when setting up the company
Art. 2 of Decree 975 Regulation of the Social Security Law	Registration of the employer to the Social Security Institute (INSS)	Enrollment sheet	Three days from the date of beginning of the employment relationship
Arts. 17 and 18 of Decree 975 Regulation of the Social Security Law	Report of general income of the collaborators	Payroll Format provided by the INSS	First 3 business days of each month
Subsection 4 of Art 6 of Decree 25-2005 Amendments and Additions to Decree No. 975 Regulation of the Social Security Law	Employer and Labor INSS payment	Payment of Invoice	Between the 15th to 17th of each month
Decree 975 Regulation of the Social Security Law	Report to the INSS on the additions and withdrawals of personnel	Filling in the online format designed by the INSS	3 days after hiring or leaving of the personnel
Arts. 24 and 25 of Decree 40-94 Organic Law of the National Technological Institute (INATEC)	Contribution payment - INATEC (1% payroll)	Payment of Invoice	Between the 15th to 17th of each month
Art. 18 of the Law 618 General Law on Hygiene and Safety at Work; Art. 16 of Decree No. 96-2007 Regulation of the Law 618 General Law on Hygiene and Safety at Work	Request and obtain from the Ministry of Labor the Occupational Safety and Hygiene License	The Occupational Health and Safety License	At the beginning of operations
Art. 18 subsection 7, 40, 44 and 50 of the Law on Hygiene and Safety at Work; Reformed Ministerial Resolution on the Mixed Commissions for Occupational Health and Safety (C.M.H.S.T.) in Companies, Published in La Gaceta No. 29 of February 9, 2007	Establish a Mixed Commission for Occupational Health and Safety (CMHST)	CMHST Constitution Act, Minutes Book, Approval Resolution, Annual Work Plan and Internal Operating Regulations	Within a period not exceeding 30 days from the beginning of operations. Once constituted, the employer will have a maximum of ten days to proceed to register before the MITRAB (Labor Ministry)
Art. 18 subsection 8, 61, 71 and 72 of the Law 618 Law on Hygiene and Safety at Work; Ministerial Resolution Regarding the Organizational Technical Regulations for Workplace Hygiene and Safety of Companies, Published in La Gaceta No. 175 of September 17, 2001	Prepare the Organizational Technical Regulation (RTO) on hygiene and occupational safety.	The Organizational Technical Regulation (RTO) approved by MITRAB (Labor Ministry)	Within a period not exceeding 3 months from the start of operations.
Art. 18 subsection 4, 25 and 26 of Law 618 General Law of Occupational Hygiene and Safety	Pre-employment and periodic medical examinations	Exam results	Pre-employment exam: prior to hiring; Periodic examination: once a year
Arts. 28 and 29 of Law 618 General Law of Occupational Hygiene and Safety Art.S ----- Social Security Law	Work Accidents. The employer must report accidents to the Ministry of Labor. In case of not registering accidents, the employer must communicate it by written to the Labor Ministry. Occupational accidents and risks to Social Security must also be reported on the sheet established for this purpose, NAT sheet.	Official format for reporting accidents at work Social security must be reported in the established official format – NAT sheet – within a term of no more than 24 hours after the accident at work.	Minor accidents within a maximum period of five business days; Fatal, serious and very serious accidents within a maximum period of twenty-four business hours plus the term of the distance, to the Ministry of Labor. In case of no accidents, monthly during the first five days of the month following.

OBLIGATIONS REGARDING IMMIGRATION REGULATIONS

Rule or Source	Purpose	Activity to present	Time of presentation (periodicity)
GENERAL LAW OF MIGRATION AND FOREIGNERS LAW 761, Chapter II	Report to Migration	Keep records of payrolls and lists of foreign workers hired.	Permanent
GENERAL LAW OF MIGRATION AND FOREIGNERS LAW 761, Chapter II	Report to Migration	Show the forms and lists of workers, when required by the General Directorate of Migration and Immigration;	At the request of Migration
GENERAL LAW OF MIGRATION AND FOREIGNERS LAW 761, Chapter II	Report to Migration	Submit every six months to the General Directorate of Migration and Foreigners, a report stating the name and surname, nationality, position, income, term of validity of the contract and address of the foreigners who are working for them.	Every 6 months

SPECIFIC OBLIGATIONS FOR FREE ZONE COMPANIES / CALL CENTERS / BPO

Rule or Source	Purpose	Activity to present	Time of presentation (periodicity)
CT/002/2017 GENERAL RULES APPLICABLE TO THE FREE ZONE REGIME	Report to the General Directorate of Customs DGA the local purchases of fixed assets	Declarations to DGA are made through a customs agency	Monthly
Art 24, subsection 3 Free Zone Law Regulations	Obligation to report statistical operations	Free zone user companies must complete a monthly statistical report using a form on the main indicators of the operation: value of exports, employment, production, imports	Monthly
Decree 12-2016	Guarantor of the National Free Zone Commission CNZF	The companies that use the free zone must renew the CNZF guarantee the first days of January of each year, as proof that they are up to date with their obligations and that their rights are in force.	Annual
Art 24, subsection 9 Free Zone Law Regulations	Payment of amounts for regime use	In the case of service companies, the amounts are by positions: From 250 to 1000 stations = US$ 5.00 per station; More than 1,000 stations = US$2.50 per station	Monthly
Regulation of the Law 917 Law of the Free Zones, Article 23, subsection: 2.1.6 Law 2000, General Telecommunications Law	Registration as a Call Center before the Institute of Telecommunications (TELCOR)	The companies that use the free zone are exempt from any obligation to register or pay before TELCOR
Law 2000 General Telecommunications Law, Articles 13 and 19	Registration as a Call Center before the Institute of Telecommunications (TELCOR)	Only once

SPECIFIC OBLIGATIONS FOR COMPANIES REGULATED BY THE HEALTH SECTOR

Rule or Source	Purpose	Activity to present	Time of presentation (periodicity)
Art. 55 and 65 of the Law 423 General Law of health ; Ministerial Agreement 583-2011 "Regulation 080 - Manual for the Authorization of Health Service Provider Establishments”	Operating License for Institutions Providers of Health Services	Manage MINSA authorization prior to the beginning of operations	Prior to the beginning of operations
Art 65 of the Law 292 Medicines and Pharmacy Law; Manual of Health License Requirements for Medical Devices - National Health Regulation Authority (ANRS)	anitary establishment license	Any establishment that imports, markets or distributes pharmaceutical products must have a health license issued by MINSA, which will be valid for two years.	Renewal every two years
Art 7 and 12 of Law 292 Law on Medicines and Pharmacies; Ministerial Agreement No. 144-2011 Regulation 064 Standard for the Registration of Medical Devices	Sanitary Registry for Medical devices	Any pharmaceutical product or medical device cannot be commercialized without having its health registration before the MINSA. The health registry will last for 5 years.	Renewal every five years
Art 59 of Law 292 Medicines and Pharmacy Law; Ministerial Agreement 583-2011 "Regulation 080 - Manual for the Authorization of Health Service Provider Establishments”	The pharmacy, optician or any establishment must be under the responsibility of a regent pharmacist, optometrist or ophthalmologist duly registered with the Ministry of Health	It is the responsibility of the optician to hire the regents and ensure that it must be duly registered with the Ministry of Health	Permanent

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IMMIGRATION

hdmedia — Wed, 11 Oct 2023 17:18:29 +0000

IMMIGRATION

GENERALITIES

All foreigners, upon entering Nicaraguan territory, enjoy the same rights and individual and social guarantees recognized in the Political Constitution of Nicaragua, the international instruments on human rights and on migration matters duly ratified by Nicaragua, except for the limitations established by the Political Constitution and the Laws of the Republic.

Law No. 761, the General Law on Migration and Foreigners and its Regulations, regulate the entry of foreigners into Nicaraguan territory, and their permanence.

IMMIGRATION CATEGORIES

Work Permit

Foreign citizens who enter the country with the aim of carrying out seasonally paid work. The General Directorate of Migration and Foreigners, will authorize foreigners a special permission to stay and work for a period of up to one year, for which they must provide, mainly and prior to starting the residence application procedures, a work contract which must be previously certified by the Labor Ministry.

Resident Independent Worker

Foreign citizens qualified as independent workers or in a dependency relationship who intend to obtain temporary residence in Nicaragua, in addition to the established common requirements, must provide a declaration of merchant registered in the Mercantile Registry, a copy of the commercial registration of the Mayor's Office, a copy of registration in the General Directorate of Income, a notarized statement of sources of income.

Resident with Work Contract

Foreign citizens qualified as scientists, professionals, technicians or specialists who intend to be hired by public or private organizations, national or foreign companies, to carry out their specialty work in the country, in addition to the established common requirements, must provide mainly and prior to starting the residence application procedures, a work contract which must be previously certified by the Labor Ministry.

Immigrant Resident with Capital or Investor

Foreign citizens who intend to settle in Nicaragua to develop any economic activity with their own capital may acquire the status of resident investor, for which they must provide an investment registration certificate issued by the Ministry of Development, Industry and Commerce, a certified copy of the company’s deed of incorporation or declaration as a merchant registered in the commercial registry and a copy of the commercial registration of the Mayor's Office and the General Directorate of Income.

Resident Businessman

Foreign citizens qualified as directors, managers, entrepreneurs or administrators who are transferred from abroad to Nicaragua by companies, national or foreign, to assume specific positions in them, in addition to the established common requirements, must provide a copy of the Deed of Incorporation and Bylaws of the Company duly registered in the Mercantile Registry, a copy of the commercial registration of the corresponding mayor's office and of the General Directorate of Income (DGI) in force.

Retired Resident or Rentier Pensioner Resident

Foreign citizens who enjoy a pension or retirement from governments, public or private institutions and who wish to reside permanently in Nicaragua, must provide a Certification of origin, annual or monthly amount of the pension, retirement or income they receive, issued by the competent authority of the country where the pension originates, by the international organization, public or private company in which he/she provided his/her services or that pays him/her the pension, resolution of the Nicaraguan Tourism Institute (Instituto Nicaragüense de Turismo INTUR) where the condition of retiree or pensioner is ratified.

COMMON REQUIREMENTS FOR ALL MIGRATORY CATEGORIES

All foreign citizens to reside in Nicaragua must comply common requirements, applicable regardless of category, the following:

Submit an application form
Accompanied by a residence application letter, original and copy of passport
Passport-size photographs
Criminal record certificate issued by the country of origin
Birth certificate
Health certificate

Once the application is approved, they must make a deposit of money in guarantee, which will be equivalent to the value of a return ticket to their country of origin.

All documents must be submitted translated into Spanish and duly apostilled. They must be recently issued and current documents to be accepted. Not more than SIX MONTHS from its issue date.

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TAX

hdmedia — Wed, 11 Oct 2023 17:17:39 +0000

TAX

APPLICABLE TAXES, REGISTERED TAXPAYERS

In this section we mention the most commonly used taxes and rates for business activity.

INCOME TAX AND CAPITAL GAINS AND LOSSES
Economic activities	30% Annual
Capital gains and losses, residents and non-residents	15%
Capital Income, residents and non-residents	15% (*)
Work Income (RESIDENTS):	Up to 30%
a. Salary- based on progressive rate with exemption of 100,000 córdobas. the applicable aliquots range from 15%, 20%, 25% and 30%	Applicable aliquots: 15%, 20%, 25% and 30%
b. Allowances received at meetings of the board of directors or partners	25%

(*) Applicable exceptions: Capital Income: income generated by financing granted by international banks with investment grade and in accordance with the regulations of the superintendency of banks 10%. And for Capital Gains and Losses the variants in aliquots are: disposal of any type of asset or investment fund 7.5%; income derived from certificates of participation issued by an investment fund 7.5%; income generated by stock market transactions 0.25% and the transfer of real estate according to a progressive rate.

ADVANCE ON ACCOUNT OF INCOME TAX (IR) ON GROSS INCOME:
They must be declared and informed monthly, it has the nature of a final minimum payment. It is credited at the end of the fiscal period on account of the payment that corresponds to 30% of annual income tax. The advance is declared, in full and paid according to the category of the taxpayer, with the following aliquots:
a. LARGE TAXPAYERS: Applicable to taxpayers whose billing income exceeds C $ 160 million córdobas per year.	3% monthly
b. MAIN TAXPAYERS: Includes those who generate a monthly billing of C$ 60 million per year	2% monthly
c. THE OTHER TAXPAYERS:	1% monthly

Withholding at Source: Whoever makes the payment to a supplier of goods or services is obliged to withhold 2% of the invoiced amount generated and report it to the General Directorate of Revenues (Dirección General de Ingresos DGI), who acquires the good or service. This retention goes to account of the annual IR of 30%	2% over the invoice amount generated

Operations with Tax Havens	30%

Sales Tax (IVA)	15%

MUNICIPAL TAX
Municipal Income Tax (IMI), is paid monthly to the mayor's office where the company develops its economic activity, where it has its establishment	1% on gross income
Municipal Registration - annual: single payment once a year, equal to 2% of the average gross income of the last three months of the fiscal period of the immediately preceding year.	2% of the average gross income of the last 3 months

INDIRECT AND IMPORT TAXES
Value Added Tax	15%
DAI (Import Tariff Duty)	From 2% to 5%
ISC (Selective Consumption Tax)- some products – aliquot varies	variable aliquot
IEECC (Specific consumption tax) - some products – aliquot varies	variable aliquot

MANDATORY DECLARATIONS TO THE TAX ADMINISTRATION

Before Tax Administration (DGI)	Date of Tax Return
Monthly
Monthly Tax Return (IVA and Advance IR Tax)	The first 5 calendar days are declared and the deadline for payment is the 15th of the month
Withholding at Source IR (Monthly)	The first 5 calendar days of the following month are declared and paid
Annual
Declaration and payment of Income Tax IR. (30% IR anual)	It is declared and paid on February 28th of each year. Date of the annual closing of the fiscal year.

Before the Municipality (Municipality of Managua)	Date of Tax Return
Monthly
Municipal Income Tax (IMI)	It is declared and paid the first 10 business days of the following month
Annual
Registration by Accounting Record (ANUAL)	January 30th of each year. Registration can be done during any date in January until the last day, January 30.

Before the INSS and INATEC	Date of Tax Return
Monthly
Before the Social Security (INSS): Income report for the month of workers	First 3 business days of the next month
Payment of INSS Invoice	This invoice is paid no later than 15 business days of each month. After the 17th of the month incurs surcharges
Payment of INATEC Invoice	This invoice is paid no later than 15 business days of each month together with the payment of the INSS invoice

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LABOR

hdmedia — Wed, 11 Oct 2023 17:17:21 +0000

LABOR

The legal framework of labor regulations is defined by

The Labor Code of the Republic of Nicaragua, Law 185.
The Labor Procedural Code, Law 815
The Occupational Health and Safety Law, Law 618.
The Social Security Law, Decree 974.
The General Labor Inspection Law, Law 664.
The Minimum Wage Law, Law 625.

Minimum salary

The minimum wage in Nicaragua is established every year, there is no single minimum wage, but rather by sector of economic activity. It is established by keeping a relationship with the behavior of the inflation of the basic basket of goods and with the behavior of each sector of the economy during the preceding year.

MINIMUM WAGE YEAR 2023 PER ECONOMIC ACTIVITY
Sector	Minimum wage In force for the year 2023
Agricultural	US$ 142.56
Fishing	US$ 216.77
Mining and quarry	US$ 256.03
Manufacturing Industry	US$ 191.69
Micro and small craft industry and national tourism	US$ 150.20
Electricity, gas and water, commerce, restaurant and hotels, transportation, storage and communications	US$ 261.49‎ ‎ ‎
Construction, financial and insurance establishments	US$ 319.04
Community, social and personal services	US$ 199.85
Central and municipal government	US$ 177.79
Free Zone	US$ 222.18

STRUCTURE OF THE LABOR LOAD IN % OVER THE SALARY

The cost of labor is not based solely on the minimum wage but on the calculation of the workload, it means, social benefits and other legal obligations for the employer that are structured based on the basic salary.

Salary	100%
Vacations	8.33%
Thirteenth month	8.33%‎
Compensation	8.33%
INSS Employer(21.50 % - 23 %)	21.50%
INATEC	2%
TOTAL OF WORK LOAD	148.50%

The workload is broken down as follows

Broken down as follows:

Year	Salary
1	1 month salary
2	1 month salary
3	1 month salary
4	20 days of salary
5	20 days of salary
6	20 days of salary
Maximum	5 months of salary

Employer Social Security: 21.5% to 22.50% of the salary earned, depending on whether you have less or more than 50 workers.

National Technological Institute (INATEC): 2% on the earned salary/on the total payroll, monthly.

In the end, the additional workload of a worker represents 48.50% of his basic salary.

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HOW TO ACQUIRE A PROPERTY IN NICARAGUA

hdmedia — Wed, 11 Oct 2023 17:16:06 +0000

HOW TO ACQUIRE A PROPERTY IN NICARAGUA

Investigate that the property is legally in order

The agrarian reform and urban reform laws that were implemented in the eighties gave rise to a rather disorderly traffic of property, without the existence of strong institutions in the Public Registries or in the Physical Cadastre, a large part of the national territory was not even registered Additionally, there are property regimes of indigenous communities, as well as ejido properties, coastal law and border land law, which have their own regulations. For this reason, investors must be careful with the investigation of the legal status of the properties, to avoid being scammed or acquiring a conflict. With the appropriate advice, a legitimate and problem-free purchase is guaranteed. A legal investigation or due diligence must be carried out on the legal status of the property, guaranteeing that everything is in order.

Verifying that the seller's title is duly registered in the Public Registry of Real Property of the Department where the property is located.

Verify your registration history and that the property is free of encumbrances.

It must also be verified that the property plans are duly registered with the Physical Cadastre Directorate of the Nicaraguan Institute of Territorial Studies (Dirección de Catastro Físico del Instituto Nicaragüense de Estudios Territoriales INETER) and that the Cadastral Number, physical location and surface extension data that the seller is providing coincide with the official data registered in the Cadastre.

Formalize the Acquisition

The acquisition of a property by a national or foreign person must be formalized through a public deed prepared by a notary incorporated and authorized by the Supreme Court of Justice. Foreigners have no problem acquiring property, except for the limitations established by the land law in border areas.

Once the public deed of sale is signed, the first stage of the registration and record process is before the Physical Cadastre Directorate. The property plans must be authorized and validated by this institution, which issues the Cadastral Data Certificate, an official document that validates that what is being legally purchased in the ownership title corresponds to the area and actual physical location of said property.

Then, the next step is the Cadastral Appraisal, to determine the value of the taxes to be paid for the transmission, as Income Tax for Capital Gains. The payment of this tax corresponds to the seller.

The tax is paid based on the appraisal, with the payment slip and the Municipal Solvency Certificate that verifies that the property does not owe taxes to the Mayor's Office, we finally proceed to present all the documentation before the Public Registry of Real Estate Property of the department that corresponds.

La entrada HOW TO ACQUIRE A PROPERTY IN NICARAGUA se publicó primero en ACZALAW Nicaragua.

SETTING UP YOUR BUSINESS IN NICARAGUA

hdmedia — Wed, 11 Oct 2023 17:15:34 +0000

SETTING UP YOUR BUSINESS IN NICARAGUA

INCORPORATING A COMPANY IN NICARAGUA

The Commercial Code in Nicaragua defines the existence of 4 types of commercial companies under which business can be done:

Company in collective name (Limited Liability Company)
Corporations
Limited partnership
Limited partnership by shares

The last two have fallen out of use over time. Corporations are the most common business entities in operation. Limited Companies, which are more oriented to family businesses, are used less frequently.

THE BRANCHES of foreign companies that are incorporated and domiciled in Nicaragua are the other mercantile figures frequently used by foreign companies to do business in Nicaragua.

There are no one-person companies in Nicaragua. A minimum of two partners are required to form and incorporate a company.

ADVANTAGES AND DISADVANTAGES BETWEEN CORPORATIONS AND LIMITED COMPANIES

From a tax point of view, both have the same treatment.

For its constitution and incorporation, both must follow the same procedure.

The same administrative regulations apply to both.

The operation and administration of a corporation is more flexible for the commercial operation than that of a Limited Liability Company, for this reason it is the most used commercial figure. Limited Liability Companies are more used by family or small and medium-scale businesses.

IN LIMITED COMPANIES

The share capital is divided and represented by registered shares. Bearer shares are prohibited.

The name or company name can be anything linked to its commercial activity or in the manner that commercially and image is convenient for the partners. The use of fantasy names is allowed.

The shares that represent the social capital are registered securities that allow their easy mobility through simple endorsement, for the purposes of sale, assignment, transfer, circulation, negotiation, etc.

Given the ease of circulation, they can serve as a PLEDGE GUARANTEE before a credit institution with a simple dynamism and without greater complexity, formalisms, and legal restrictions except what has been agreed in the statutes.

They are capital companies, regardless of the person. When a partner sells its shares and withdraws, it is no longer responsible for the acts, obligations and responsibilities that arise after he endorses and withdraws.

The other partners will be liable.

Most of the decisions are made through a session of the Assembly of partners or of the Board of Directors, which for their validity are recorded in the Book of Minutes duly signed by the directors or partners, which simplifies the dynamism of business with respect to the decisions that need to be made. It does not require that the minutes be registered in the public registry except those referring to the election of the board of directors and changes of partners for the purposes of updating information and for the registration of final beneficiary. This is so because the public limited company is responsible for its obligations and the capital stock is responsible for these obligations. The partners do not respond with their personal assets, they respond up to the percentage of their participation in the social capital.

The assignment and sale of shares is done through a simple endorsement in the certificate and delivery of the document to the buyer, and its entry in the share registry book.

WHILE LIMITED LIABILITY COMPANIES

The social capital is represented in personal quotas of participation and interest. Share certificates are not issued therefore endorsements in transfers do not operate. When an assignment of participation is made, it must be done in a public deed and registered in the public registry.

The name or company name must necessarily bear the surname or name of one or more partners; or the managing partners. The trade name must always be followed by the name "y Co. Ltda"

As there are no shares, but "interest or participation quotas" they cannot be freely sold or assigned to third parties other than the founding partners. Their free movement is restricted. Even if a partner assigns his share of interest, he continues to be jointly and severally liable on behalf of the assignor and against third parties.

Given the nature of limitation in circulation, its use to offer participation quotas as collateral is restricted, since limited companies are Intuite Personae "partnerships"; the assignee is not released from liability towards the assignors. or creditors.

They are interest companies and in attention to the person more than the capital. When a partner withdraws, the partner who sells or assigns his share retains its status as a partner and will always respond to third parties for any responsibility or obligation incurred by the Company, even if it is no longer part of it due to having withdrawn.

The decisions of the partners must be made through agreements that are signed in a public deed and must be registered in most cases in the Public Registry because Limited companies are companies that respond to the managing partners in addition to the legal person. For this reason, the public faith of the registry is of transcendental importance. Those who contract with a Limited company (users, consumers, creditors, clients, etc.) must know through the Public Registry the life, organization, and form of regulation of the limited company through the Public Registry. Partners are liable with their personal property / personal assets up to the amount of their contributions to the partnership.

The Assignment and sale of contributions is made in a public deed that must be unanimously approved. In any case, the outgoing partner remains responsible for the acts carried out by the Company and its partners, even if outside of it.

BASIC ASPECTS: APPLICABLE TO CONSTITUTION AND INCORPORATION OF A CORPORATION IN NICARAGUA.

This process described here also applies to Limited Companies.

The Company is incorporated with the granting and signing of a public deed authorized by a Public Notary. A minimum of two shareholders are required.

Shareholders

The minimum number of partners to establish a public limited company is 2 people, who can be both natural persons and legal entities.

The partners, natural or legal persons, may be foreigners who do not reside in the country. It is not a mandatory requirement to incorporate one or more Nicaraguan partner(s).

For the preparation of the Public Deed of Constitution and Statutes, the partners must present the documentation and information on the relevant aspects of the company: corporate name, address, share capital, shareholding composition, corporate purpose, administrative bodies, their powers and operation, appointment and integration of the board of directors, among others.

Board of Directors

In Nicaragua, to be a director it is mandatory to be a shareholder.

A minimum of two directors with the positions of president and secretary are required. There may be others that the general meeting approves.

The directors can be natural persons or legal persons.

The directors may be non-resident aliens.

The company must designate a Legal Representative, who can be Nicaraguan or foreign. If a foreigner, it is mandatory that he is a legal resident in the country since he is the one who is legally responsible for the company.

The exact address of the place where you will carry out your business operations must be indicated, which must necessarily be described in the deed of incorporation or in the merchant application registration.

Documentation from abroad must be sent duly apostilled and with its translation into Spanish - in case it was originally issued in a different language - from the foreign company in the case of branches; and in the case of legal entity partners, to simultaneously complete the final beneficiary registration as a requirement to register the new company and/or the branch.

Procedure for incorporation:

Once the company is constituted by Public Deed, it must be registered in the Public Mercantile Registry of the department of its registered office. In Nicaragua there are 17 Public Registries of Real Estate and Commercial Property, with offices by department of the country.

Once the deed of incorporation and bylaws have been registered, the company is registered as a MERCHANT and the company books (Minutes, Share Registration Book and accounting books) are registered. The appointment of the Legal Representative must also be registered before the Mercantile Registry through a general power of administration that is granted immediately after registering the company.

Estimated time

In Nicaragua there is no centralized business registry. Each department has its own commercial registry and the procedure must be carried out in the one that corresponds to the domicile of the company, according to the city/Municipality and Department to which it corresponds.

There is also no possibility of carrying out this Registration through an online platform, it must be in person.

For this reason, there is no standard time to complete the registration and incorporation process, it varies according to the agility and efficiency of each Mercantile Registry: While in the city of Managua, companies are registered within a period of no more than one week, in Departments such as León can take up to a month to complete the process. It is a term that really varies according to the registry that is used.

CONSTITUTION OF BRANCHES

According to Nicaraguan Legislation, to register a Branch of a Foreign Company, Resolution of the General Meeting of Shareholders of the main company (Parent Company) is legally required, through which its shareholders make the decision and agree to establish a branch in Nicaragua.

In addition to the Minutes with the Resolution, the parent company must provide the information of its shareholders; the corporate name of the branch, the capital stock with which it will operate, the commercial activity and line of business that it will carry out in Nicaragua; the tax domicile, the Legal Representative who will assume responsibility in Nicaragua, who must be a Nicaraguan citizen or a foreigner residing in the country.

Provide the documents from abroad of the parent company that shows its partners, directors, legal representative, incorporation data, address abroad. These documents must come in Spanish or their translation into Spanish and duly apostilled. It is required to be a document whose date of authentication does not exceed more than SIXTY days..

The branch is constituted by means of a public deed prepared by a Nicaraguan notary, in which the Minutes of the resolution of the parent company are inserted and presented before the Public Mercantile Registry of the Department of the selected registered office, for its due registration and registration.

From then on, the process and requirements to be met are the same as those described for the incorporation of other forms of commercial companies.

BASIC COMMON RECORDS AND PERMITS FOR THE COMPANY TO START OPERATIONS

Once the company is constituted, the next stage is obtaining operating permits. These records, registrations, permits, or licenses are the following:

Registration and obtaining tax ID, Single Taxpayer Registration Card (RUC) before the General Directorate of Revenue (DGI).

The municipal registration, in the municipality or municipalities in which the company will develop operations.

Registration with the Nicaraguan Social Security Institute (INSS).

For these procedures it is a requirement to have a tax domicile and a Legal Representative. Supports and documents must be attached to show this information.

Without obtaining these records, the company cannot start commercial operations.

Estimated time

The estimated time to complete this process ranges from two to five weeks.

RECORDS, REGISTRATION, PERMITS OR LICENSES FOR ACTIVITIES IN REGULATED SECTORS

In addition to the common registries for all commercial companies, if the company's line of business corresponds to an activity in a regulated sector, the company must also obtain the permits from the Regulatory Body of the sector, prior to starting its commercial operations.

The most common regulated sectors and their regulatory institutions are:

Ministry of Health: Everything related to the import, export or commercialization of pharmaceutical products, food, care products and household hygiene. It is required to obtain Sanitary Records, establishment license.

Institute of Telecommunications and Postal Services (TELCOR): for licenses, permits and registrations, for the operation, provision, and commercialization of telecommunications services.

Ministry of Energy and Mines:permits and licenses for power generation.

Ministry of Energy and Mines: concessions and permits for the exploitation, commercialization and export of mines and quarries. And for other activities that are regulated by this ministry.

Ministry of Transport and Infrastructure (MTI): logistics operating companies, transport companies of any kind (naval, air, land); construction companies.

Superintendency of Banks (SIBOIF): All activities related to financial operations.

THE REGISTRY OF THE FINAL BENEFICIARY

In compliance with international agreements, for the prevention and against money laundering and financing of terrorism, Nicaragua has adopted legislation by means of which commercial companies, existing or to be established, must report to the "Registry of the Final Beneficiary" all the chain of shareholders, legal persons, upwards, until the last natural person shareholder is identified in the chain, who in the end has control of the local company.

Foreign companies that are part of the chain of ownership must present information on: Constitutive Act and Bylaws, Certificate of Registration in the Companies Registry of their country of origin; Certificate of shareholders of the partners in their country of origin.

Public companies listed on the stock exchange must declare: the issuer code of the commercial company; the domicile of the company, the country of incorporation or origin; name, jurisdiction, and identification code of the stock exchange where the company is registered.

La entrada SETTING UP YOUR BUSINESS IN NICARAGUA se publicó primero en ACZALAW Nicaragua.

BUSINESS OPPORTUNITIES

hdmedia — Wed, 11 Oct 2023 17:12:56 +0000

BUSINESS OPPORTUNITIES

In this section we inform on international conventions and treaties, as well as on national laws, whose benefits and competitive advantages can be taken advantage of by foreign or national investors.

FREE TRADE AGREEMENT WITH THE UNITED STATES (CAFTA-DR) AND INVESTMENT OPPORTUNITIES

The Free Trade Agreement between the United States, Central America and the Dominican Republic (CAFTA-DR) has opened up new opportunities for Nicaragua, both in terms of trade advantages and investment. This agreement has fostered the country's economic growth and has provided several significant benefits.

One of the main advantages of CAFTA-DR for Nicaragua is preferential access to the United States market. The agreement removes most tariff barriers for Nicaraguan products, allowing exporters to compete on a level playing field in the US market. This has led to a significant increase in Nicaraguan exports to the United States, benefiting various economic sectors, such as agriculture, manufacturing, and services.

In addition to preferential access to the US market, CAFTA-DR has also facilitated foreign direct investment (FDI) in Nicaragua. The guarantee of protection and fair treatment for investors has generated confidence in the country's investment climate. This has led to an increase in investment in key sectors such as agriculture, renewable energy, manufacturing, free zone and tourism.

In the manufacturing sector, CAFTA-DR has boosted the growth of the garment and textile industries in Nicaragua. US companies have established factories in the country to take advantage of the agreement regarding the exemption of tariffs and the hiring of skilled labor. This has generated employment and has helped diversify the Nicaraguan economy.

The provision contained in CAFTA that allows manufacturing companies to use raw material from any origin/country, to be manufactured in Nicaragua, has been very important. This has given rise to the relocation and/or expansion of many companies to the country, taking advantage of the tariff advantages, the geographical ones due to the short distance with the North American market, the quality and low cost of labor with the advantage of affinity. culture between the two countries.

In the agricultural sector, CAFTA-DR has created significant opportunities for unique producers. The elimination of tariffs has allowed greater competitiveness in products such as coffee, beef, fruits and vegetables. As a result, Nicaraguan farmers have increased their exports to the United States and have diversified their export markets.

In summary, CAFTA-DR has provided investors in Nicaragua with a series of advantages and opportunities such as those already mentioned. Preferential access to the US market has increased exports and fostered the diversification of the economy. In addition, the agreement has stimulated foreign direct investment in strategic sectors such as agriculture, renewable energy, manufacturing, and tourism. In addition, CAFTA-DR provides stability and a solid legal framework that protects the rights of investors.

Ultimately, CAFTA-DR has been a catalyst for economic growth in Nicaragua and has provided significant opportunities for investors interested in doing business in the country.

FREE TRADE AGREEMENT (ADA) BETWEEN EUROPE AND NICARAGUA

This agreement has provided multiple benefits for both foreign investors and businessmen operating in Nicaragua, generating new opportunities, and strengthening trade relations with Europe.

One of the main benefits of the ADA Treaty for investors is preferential access to the European market. This agreement has eliminated a large part of the tariff barriers to Nicaraguan exports to Europe, which has allowed investors to access a market of 500 million consumers. This opening has boosted the growth of Nicaraguan exports to Europe, opening new business opportunities to diversify the country's economy. It has also encouraged foreign direct investment in Nicaragua.

European companies are interested in taking advantage of the trade opportunities and benefits of the agreement, such as exemption from tariffs.

Preferential access to the European market is particularly beneficial for Nicaraguan investors in sectors such as agriculture, manufacturing, and services. Nicaraguan agricultural products, such as coffee, vegetables, and tropical fruits, have found a strong market in Europe, which has stimulated investment and the expansion of agricultural production in the country. Similarly, the manufacturing sector has experienced significant growth with the entry of investors interested in taking advantage of the advantages of preferential access to the European market.

In addition, of access to the European market, the ADA Treaty offers Nicaraguan investors and businessmen guarantees of protection and fair treatment. This generates confidence and legal certainty to make long-term investments. The agreement also promotes cooperation in areas such as intellectual property, facilitating the transfer of knowledge and technology between Europe and Nicaragua.

LAW 917, EXPORT FREE ZONES LAW

The growth of companies in the free zone sector has been remarkable in the last 20 years, generating export volumes in US$ that already equal the value of Nicaragua's traditional exports.

The tax benefits of the free zone and the opportunities of the Free Trade Agreement with the United States (DR-CAFTA) have attracted investors from all continents. There are 183 free zone companies that generate 140,000 direct jobs and reached exports worth US$ 3.852 billion in 2022.

The most developed activities are clothing textiles, car harnesses and a growing sector of Back Office service companies, Business Process Outsourcing (BPO) and Call Centers.

THE TAX BENEFITS OF FREE ZONE COMPANIES

We indicate here the most relevant, not all those established in the law:

100% exemption during the first ten years of operation and 60% from the eleventh year onwards, from the payment of Income Tax generated by its activities in the Zone.

Exemption from all taxes, customs and consumption duties related to imports, applicable to the introduction into the country of raw materials, materials, equipment, machinery, dies, parts or spare parts intended to qualify the Company for its operations in the Zone.

Total exemption from indirect, sales or selective consumption taxes, such as VAT, ISC, etc.

Total exemption from municipal taxes.

Total exemption from export taxes on products fabricated within the Free Zone premises.

WHAT ARE THE REQUIREMENTS TO CONSTITUTE A FREE ZONE COMPANY

To enter the free zone regime, the main requirement is that the company allocate all its production to the export of goods or services abroad. Local marketing is not allowed.

The company must be incorporated in its public deed with a single corporate purpose. Existing companies under the general tax regime cannot transfer or convert their operation to be admitted operating under the free zone regime. Only apply an operation that, due to its characteristics, meets the requirements and is a new operation in the market.

WHAT IS THE PROCEDURE TO APPLY TO BE A FREE ZONE COMPANY

The National Commission of Free Zones (CNZF) is the authority with the powers to authorize applications from companies to be part of the free zone regime.

The applicant company must present all the legal, technical, and economic information and documentation related to its project: investment plan and schedule, estimated value of exports, labor to be generated, source of funds, investor information. In addition, information about the physical facilities must be presented: Plans, distribution of the physical plant, Project area, location.

The management and processing of admission to the free zone regime can only be carried out by consultants accredited and authorized by the National Commission of Free Zones. The request must be submitted under the methodology, guidelines and forms established for this purpose by the Commission.

Once the application has been submitted, the approval and authorization must be obtained, and if so, the rights and fees that apply according to the type of operation and classification, including the guaranteed deposit, will be paid.

TOURISM

Nicaragua offers a favorable environment for tourism investment, supported by the Tourism Incentives Law 306. This legislation provides a wide range of benefits that are highly attractive to investors. One of the key benefits is the exemption from import taxes, which means that tourism companies can purchase equipment and supplies without incurring additional costs. In addition, purchases intended for investment are exempt from VAT, which represents significant savings for investors.

Another important advantage is that the taxes for the purchase of vehicles for business also enjoy these exemptions, which facilitates the acquisition of the means of transport necessary for tourism development. Additionally, it enjoys a tax reduction of Income Tax, which in Nicaragua is the 30% that the investor would have to pay, to only 3% per year during the first ten years, which provides significant financial stability to investors. and fosters a favorable environment for growth.

The Tourism Incentives Law 306 also offers the possibility of extending benefits to 5 additional years through a new investment that exceeds fifteen thousand dollars. This provides flexibility and ongoing opportunities for those who wish to expand and expand their tourism business in Nicaragua.

It is important to note that the Nicaraguan Tourism Institute (INTUR) is the institution in charge of granting these benefits. To obtain these benefits, certain requirements are required, such as the presentation of a solid business plan, an investment plan that includes financing mechanisms, an operational management plan and a calculation of working capital for a period of six months. These requirements ensure that investments are viable and sustainable in the long term.

In addition to tax benefits and facilities for investors, Nicaragua has an undeniable tourist attraction. Its beautiful beaches and adventure tourism stand out as promising investment opportunities. With miles of unexplored coastline and impressive natural landscapes, Nicaragua offers an ideal setting for resort development, water activities, and extreme sports. The combination of tax benefits and exceptional tourism make Nicaragua an unbeatable destination for those looking to invest in the tourism industry.

OTHER INCENTIVE LAWS FOR ECONOMIC SECTORS

Law 344 Foreign Investment Promotion Law

Grants the foreign investor free access to the purchase and sale of foreign currency and free convertibility; transfers abroad of invested capital, as well as profits and dividends, payments for debts contracted abroad, income and technical assistance.

Provides the investor with legal certainty related to his investment and the enjoyment of the same rights as Nicaraguan investors.

Law 382 Temporary Admission Regime for Active Improvement

The spirit of this law is the promotion of exports. For this, the tax system is created to allow both the entry of goods for raw materials into the national customs territory and their local purchase without the payment of all kinds of duties and taxes, if these goods are re-exported as components of finished products, after being subjected to a process of transformation, elaboration, repair, etc.

In this way, the costs for export products that benefit from this tax regime are lower and their sales prices are more competitive abroad since they are not subject to the payment of taxes for the importation of raw materials or components.

Companies that export, directly or indirectly, at least 25% of their total sales and with an exported value of not less than US$ 50,000.00 per year can benefit from this regime.

Law 532 Law for the Promotion of Electricity Generation with Renewable Sources

This Law is aimed at promoting investment in renewable energy by granting the investor a series of tax incentives:

Exemption from the payment of Import Tariff Duties (DAI), of machinery, equipment, materials and supplies intended exclusively for pre-investment work and construction work; also, of solar panels and batteries for generation of solar energy.

Exemption from the payment of Value Added Tax (VAT) on machinery, equipment, materials, and inputs intended exclusively for pre-investment work and construction of the works.

Exemption from the payment of Income Tax (IR) and from the defined minimum payment of IR established in Law No. 822, Tax Agreement Law, for a maximum period of 7 years from the start of commercial or commercial operation of the Project.

Exemption from all current Municipal Taxes on real estate, sales, and registration during the construction of the Project, for a period of 10 years from the commercial operation of the Project, which will be applied as follows: exemption of 75 % in the first three years; 50% in the following five years and 25% in the last two years.

Law 694 Law for the Promotion of Income of Pensioned Residents and Rentier Residents

It grants benefits, mostly in the form of tax incentives, to those people who request to reside indefinitely in Nicaragua within the immigration category of Pensioned Resident or Rentier Resident. To obtain the status of Pensioned Resident, you must demonstrate that you receive a stable and permanent monthly pension abroad equivalent to US$ 600.00. And to obtain the status of Resident Renter, you must demonstrate that you receive abroad, in a stable and permanent way, income that generates a monthly amount equivalent to US$ 750.00.

La entrada BUSINESS OPPORTUNITIES se publicó primero en ACZALAW Nicaragua.

Telecomunicaciones

hdmedia — Wed, 13 Sep 2023 17:03:16 +0000

Telecommunications! Import and homologation of equipment

DID YOU KNOW WHAT?

For import The importation of equipment, technological devices or telecommunications equipment into Nicaragua requires authorization and registration with the telecommunications regulator, the Nicaraguan Telecommunications Institute (TELCOR), and obtaining an import permit for such equipment. This is done on an annual basis subject to renewal. Without this permit, the owner of the equipment will be subject to import withholding by the General Directorate of Customs Services (DGA) and the goods will not be delivered until the corresponding permit is obtained. There are exceptions for operators established on the basis of their license or authorization.

For Homologation of telecommunications equipment: It is the Act by which the regulatory body officially recognizes that the specifications of an equipment intended for telecommunications, meets the standards previously issued or approved. It is an applicable procedure so that they can be marketed, used and operated in Nicaragua. It is approved by the regulator., a fin de que éste compruebe que las características técnicas del dispositivo no dañarán a las redes que se conecten ni interferirán con otros servicios de telecomunicaciones, y para garantizar la seguridad del usuario.

Example of equipment that must be approved: cell phone, tablet, GPS or router, etc.

Who can approve?

1.- Equipment manufacturers

2.- Suppliers of equipment authorized by the manufacturer

3.- Telecommunication operators authorized by the manufacturer

Legal basis: Administrative Agreement corresponding to the case, issued by the regulatory agency and the Regulations for Customs Inspections and Control of the Introduction of Telecommunications Equipment.

Requirements

To import and to obtain a Homologation Certificate, what requirements you must fulfill, legal basis and other applicable requirements. Contact us, we will manage it for you.

We advise you preventively and execute the registration and homologation process.

La entrada Telecomunicaciones se publicó primero en ACZALAW Nicaragua.

Sociedades Beneficiario Final

hdmedia — Wed, 13 Sep 2023 16:54:46 +0000

DID YOU KNOW WHAT?

It is important to know the regulations on the FINAL BENEFICIARY applicable to any company doing business in Nicaragua. This information concerns you.

Who is considered the beneficial owner of a company in Nicaragua?

Company Requirements

The regulations of the Registry of Beneficial Ownership of Commercial Companies, in its article 2 defines: "The beneficial owner of a commercial company is considered to be:

La persona o personas naturales en cuyo nombre se realiza una operación
La persona o personas naturales que en último término tienen la propiedad o controlan a un cliente, incluyendo a la persona o personas naturales que ejercen la propiedad o control, a través de una cadena de titularidad o de otros medios de control distintos del control directo”.

About the END BENEFICIARY (BF)

BF Registration: In order to formalize the registration and declaration of BF of any company, basic information must be previously updated in the commercial registry regarding: shareholder transfers, board of directors update, capital reforms, change of legal representative. If this information is not up to date it will not be possible to complete the BF registration.

What would be the first step that a corporation must do to declare the beneficial owner?

Every company must have up to date, in order and completely updated information such as share transfer (current partners), current board of directors, capital reform. In cases where there is a change of legal representative. Every time there is a change of partner, directors, legal representative, it is necessary to make the update in the Public Mercantile Registry in the companies' registry; and subsequently declare and/or update the beneficial owner in the beneficial owner's registry.

It is mandatory to present the Certificate of Registration of the Final Beneficiary:

No company may act or execute activities, execute contracts, deeds, actions before banks, private parties, governmental institutions, or others if it does not have its respective certificate of beneficial ownership registration duly updated and up to date. It must be presented before the notary public every time they attempt or require to execute public deeds of any kind. The notary must add it or attest that he/she has it in sight. Likewise, the registry traffic is paralyzed if it is not found with its registry obligations in order and duly updated. Exposing himself to fines established for non-compliance with the applicable regulations.

Our priority is to advise you in a timely and preventive manner. We offer you to save costs, risks and unnecessary setbacks. Beyond the economic aspect, your reputation and compliance with regulations of this nature are your seal of guarantee and solidity in the market, in front of your customers, suppliers and competitors. Because we know what it represents in intangible terms, we focus on taking care of your image, worrying about executing the step by step, within the current legal framework and that from time to time are updated, for the fulfillment of the details, no matter how small they may seem.

We are your strategic ally, contact us.

La entrada Sociedades Beneficiario Final se publicó primero en ACZALAW Nicaragua.

ACZALAW Nicaragua

GENERAL INFORMATION ON NICARAGUA

GENERAL INFORMATION ON NICARAGUA

Index

PRINCIPAL MACROECONOMIC INDICATORS BEHAVIOR

EXCHANGE RATE AGAINST THE DOLLAR

FREE CURRENCY CONVERTIBILITY

FREE REPATRIATION OF CURRENCY

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GENERAL REGULATIONS THAT COMPANIES MUST COMPLY WITH

REGULACIONES GENERALES QUE DEBEN CUMPLIR LAS EMPRESAS EN NICARAGUA CONSIDERADAS COMUNES Y RECURRENTES

Index

RECURRING CORPORATE COMPLIANCE OBLIGATIONS

PERMANENT COMPLIANCE TAX OBLIGATIONS

LABOR OBLIGATIONS OF PERMANENT COMPLIANCE

OBLIGATIONS REGARDING IMMIGRATION REGULATIONS

SPECIFIC OBLIGATIONS FOR FREE ZONE COMPANIES / CALL CENTERS / BPO

SPECIFIC OBLIGATIONS FOR COMPANIES REGULATED BY THE HEALTH SECTOR

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IMMIGRATION

IMMIGRATION

Index

GENERALITIES

IMMIGRATION CATEGORIES

Work Permit

Resident Independent Worker

Resident with Work Contract

Immigrant Resident with Capital or Investor

Resident Businessman

Retired Resident or Rentier Pensioner Resident

COMMON REQUIREMENTS FOR ALL MIGRATORY CATEGORIES

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TAX

TAX

Index

APPLICABLE TAXES, REGISTERED TAXPAYERS

MANDATORY DECLARATIONS TO THE TAX ADMINISTRATION

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LABOR

LABOR

Index

The legal framework of labor regulations is defined by

Minimum salary

STRUCTURE OF THE LABOR LOAD IN % OVER THE SALARY

The workload is broken down as follows

Broken down as follows:

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HOW TO ACQUIRE A PROPERTY IN NICARAGUA

HOW TO ACQUIRE A PROPERTY IN NICARAGUA

Index

Investigate that the property is legally in order

Formalize the Acquisition

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SETTING UP YOUR BUSINESS IN NICARAGUA

SETTING UP YOUR BUSINESS IN NICARAGUA

Index

INCORPORATING A COMPANY IN NICARAGUA

ADVANTAGES AND DISADVANTAGES BETWEEN CORPORATIONS AND LIMITED COMPANIES

IN LIMITED COMPANIES

WHILE LIMITED LIABILITY COMPANIES

BASIC ASPECTS: APPLICABLE TO CONSTITUTION AND INCORPORATION OF A CORPORATION IN NICARAGUA.

Shareholders

Board of Directors

Procedure for incorporation:

Estimated time

CONSTITUTION OF BRANCHES

BASIC COMMON RECORDS AND PERMITS FOR THE COMPANY TO START OPERATIONS

Estimated time

RECORDS, REGISTRATION, PERMITS OR LICENSES FOR ACTIVITIES IN REGULATED SECTORS

THE REGISTRY OF THE FINAL BENEFICIARY

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BUSINESS OPPORTUNITIES

BUSINESS OPPORTUNITIES

REGULACIONES GENERALES QUE DEBEN CUMPLIR LAS EMPRESAS EN NICARAGUA

CONSIDERADAS COMUNES Y RECURRENTES

Requirements

To import and to obtain a Homologation Certificate, what requirements you must fulfill, legal basis and other applicable requirements. Contact us, we will manage it for you.