Nicaragua is one of the largest states in Central America. This country has developed agricultural and manufacturing sectors. The local government makes special emphasis on education. And the state is interested in involving foreign capital as well. So, company registration in Managua or any other city in Nicaragua is potentially beneficial in view of these points.
Arguments in Favor of the Jurisdiction
Purchasing or establishing a company in Nicaragua is potentially profitable because of:
- substantial deposits of natural resources (gas, oil, metals, etc.);
- simplicity of business incorporation procedures, remote application is possible;
- qualified manpower involving which will be associated with reasonable costs;
- no automatic exchange of tax information is provided;
- free trade zone is available (exemptions from corporate tax and customs are present);
- absence of currency control limitations.
Major Legal and Organizational Forms
A foreign investor is allowed to incorporate a company in Nicaragua or establish one’s formal presence in this state in any alternative way by utilizing, among others, these widespread registration solutions:
- Limited liability company – the most popular choice of foreign investors as all kinds of their obligations are limited in this case to the funds invested. At least two promoters of any nationality are required. One director is needed as well. There are no obligatory requirements about the starting share capital foreseen for this entity type.
- Branch – a more simplified option of doing business in Nicaragua without forming a separate legal entity. A branch will be allowed to do the same types of business activities as its parent company abroad. The mother company will also bear 100% responsibility over all debts and losses of its branch.
How to Establish a Company in Nicaragua?
Forming a company in Nicaragua requires these steps to pass in any case:
- Defining target business activities.
- Elaborating on and checking a business name for a company.
- Collecting the particulars of promoters, beneficiaries, mother company (if any), and managers.
- Finding and formalizing an official address.
- Drafting and executing corporate documents, including lodging such before a notary public.
- Submitting registration documents for consideration. Entering the details about a new entity in the Commercial Register.
- Registering a new company for tax and social security purposes.
- Opening corporate bank accounts.
- Obtaining a license if among the chosen types of activities there is a regulated one.
Legal and Regulatory Landscape
Founding a new business in Nicaragua is easy – all administrative procedures have been simplified maximally. The scope of documents needed is minimal and the registration requirements are clear. Remote incorporation is possible. 100% foreign ownership is acceptable as well.
Handling some types of regulatory activities will still require getting licenses. Investors are allowed to repatriate profits and capital without problems.
Taxation in Nicaragua
If you wish to buy or create a company in Nicaragua, this option should be in any case assessed along with the next points of local taxation:
- Profit tax (for enterprises) – 30%
- Income tax (for natural persons) – (1) residents – 30% (2) non-residents – 20%
- Value-added tax – 15%
- Withholding tax (for non-residents) – (1) dividends – 15% (2) interests – 15% (3) royalties – 15%
- Capital gains tax – (1) for enterprises – 15% (2) for natural persons – 15%.
How Prifinance Attorneys Can Assist You
Any goal of buying a ready-made company in Nicaragua or creating a new one is possible to realize easily with the support of Prifinance attorneys. Experts possess versatile expertise in registration gained through more than 11 000 projects. Provide details to get 100% customized and professional support.