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Nicaragua Business: An Overview

Nicaragua Business
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Why Nicaragua?

As a result of years of economic liberalization, and the implementation of policies intended to stimulate national and foreign investment, Nicaragua is now one of the most dynamic economies in Central America, due in large part to a substantial increase in private investment and exports.

According to Doing Business 2015 report by the World Bank Group, Nicaragua was ranked as the fastest country in which to start a business in Central America. The indicators analyzed in the report measure business regulation and the protection of property rights, and their effect on businesses. The study placed Nicaragua in the number one position within the Central American region, followed by El Salvador and Costa Rica. The study also positioned Nicaragua as the country that best protects investors.

Foreign investment in Nicaragua is promoted by the government as well as private institutions. It is also protected by a law known as the "Foreign Investment Protection Law." It guarantees complete convertibility of Cordobas (Nicaraguan currency) into dollars with no special taxes or levies and with no requirements or permissions. The government offers numerous incentives. Different industries can take advantage of the low cost of labor and tax-free promotional law, plus they can establish their business within the available industrial parks to produce anything from apparel to fuel tanks.

Tourism continues to grow and has fueled a booming real estate business in Nicaragua, which is forecasted to continue anywhere from seven to ten years. Anything that is considered part of the tourism business, or designed to promote tourism to the country, can benefit from incentives provided by Law 306. This law provides potential businesses an exemption from 15% sales tax, which covers such items as the purchase of construction materials and equipment to develop your business plus any related property taxes, for ten years.

A Wave of Business Development Boosts Prospects in Nicaragua

Inter-Continental Hotels, Holiday Inn, Best Western, the Seminole Hotel, and Hilton have opened hotels in Nicaragua. Major corporations have set up shop, too, including McDonald's, Liz Claiborne, Bell South, TGI Fridays, Osh Kosh B'gosh, Payless Shoes, Kodak, United Colors of Benetton, Burger King, Radio Shack, Pizza Hut, Domino's, Hertz, Budget, Alamo, and more. Walmart owns two of the local supermarket chains.

Government incentives are stimulating growth. The Tourism Tax Incentives Law is not only attracting foreign investment, but Nicaraguans are using this incentive to invest in certified tourism development projects to offset their ordinary income tax.

Procedural Guide to Business in Nicaragua

Law 306 incentives extend into a variety of business types that are eligible for tax exemptions. For example, investing in environmentally protected areas, arts and crafts, transportation (land, water or air), or investment in infrastructure such as marinas, energy production, waste disposal treatment, and other such options, particularly hotels, bed and breakfasts, lodges, condos, etc. are also covered under this tax code. Many Nicaraguans are unemployed or earn low wages and thus the establishment of new businesses, especially those that can make use of personnel, is encouraged. Many have seen opportunities for eco-travel in Nicaragua and have chosen to set up related businesses.

While the Nicaragua economy continues to grow and several foreign businesses have taken advantage of the lucrative benefits offered by the government, starting a business there seems simple enough on paper, but rules can change laws may vary in different locations. You need a local lawyer and consultant to work through often complex procedural matters, the least of which may involve waves of paperwork and translation assistance. Depending on whether your business proposal is small or large scale, permissible or otherwise, there are numerous resources you must align yourself with in order to succeed.

Our Nicaragua Business Services

  • Formulation and project evaluation in the industrial, commercial and tourism sectors
  • Consultantships in discharges and fiscal matters
  • Market research
  • Process of inscription and formation of societies in accordance with Nicaraguan law
  • Accounting and financial consulting
  • Investigation of economic indicators
  • Facilitating contact with the private sector and government

How We Can Help

The opportunities in Nicaragua are limitless. Run your own B&B, offer tourist services, open a café, develop an import/export business ,.. Nicaragua is a great choice! Besides the lucrative tax saving advantages, there is great demand for foreign businesses to serve the local and flourishing international markets. Our knowledgable local team and network of professionals can assist you with all of your business needs. Contact us today to see how we can help you get started.

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