DOING BUSINESS IN NICARAGUA
Since 2003, Healy Consultants has assisted our Clients with business registration in Nicaragua. Our services include i) Nicaragua company incorporation ii) government license registration iii) business bank account opening iv) employee recruitment v) visa strategies and vi) office rental solutions.
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Advantages and Disadvantages
Advantages of Nicaragua company registration
- A Corporation in Nicaragua can be incorporated with a minimum of two shareholders and one director of any nationality. The minimum registered capital required for incorporation is US$1 and our Client will not need to travel to complete the engagement;
- Nicaragua law allows 100% foreign ownership in every economic sector and there are no restrictive visa or work permit requirements to inhibit investment;
- 100% repatriation of profits and transfer of funds abroad by foreign investors is allowed by the Nicaragua foreign investment laws. No restrictions are imposed on foreign-trade operations or foreign-currency transactions in Nicaragua;
- Nicaragua free zones in Nicaragua allow foreign investors to establish manufacturing companies for purposes of exportation exempt of income tax and VAT;
- Nicaragua is a member of CAFTA-DR which is a free trade agreement between Central American countries, the United States and Dominican Republic which facilitates international tax-free trade among member countries. CAFTA boosts export-oriented FDI in Nicaragua. Nicaragua is also a member of CACM (Central American Common Market);
- Nicaragua is strategically placed at the center of the Americas with easy access some of the major markets of the world such as North, South, and Central American countries as well as the Caribbean market, thus offering vast opportunities to investors.
Disadvantages of Nicaragua company registration
- Nicaragua’s labour code states that 75% of employees (excluding management posts) in foreign companies must be Nicaraguan nationals;
- The corporate tax rate in Nicaragua is quite punitive at 30% plus an additional 15% for VAT;
- Although the company incorporation process takes approximately 2 weeks, the licensing process takes about 200 days to complete;
- Corruption continues to be an endemic problem in Nicaragua and the country was ranked 133 in the 2014 Transparency International Corruption Perceptions index. Property rights are not strongly respected and rule of law is not applied efficiently;
- The national language in Nicaragua is Spanish. All legal documents in Nicaragua must be translated into Spanish before submitting which is a time-consuming exercise during company incorporation and has cost implications on the investor. Communicating with the employees and government officials will also be a problem for the foreign investors who do not speak Spanish;
- Nicaragua is one of the poorest countries in Central America with underdeveloped infrastructure with only about one-third of all roads in good condition and no major railway network, therefore transport of goods and services is inefficient and electricity supply is limited.