Nicaragua is well-known for its natural splendor, which includes mountains, rivers, lush rainforests, and expansive sandy beaches.
Because of its central location in the Americas, Nicaragua has always been appealing to investors, and the country has recently taken steps to make its business climate more stable. Free trade agreements with the United States, Central America, and the Caribbean have helped Nicaragua capitalize on its strategic location and boost its commercial activity.
Why set up a company in Nicaragua
The following are some of Nicaragua’s perks that attract business owners:
Low entry barriers
Starting a business in Nicaragua is simple and fast because of the country’s low entry barriers.
Its strategic position
Located as it is in the middle of the American continent, Nicaragua has positioned itself as a highly competitive export platform serving global markets.
Favorable business climate
To encourage the growth of new and existing investment projects, the Nicaraguan government has made the construction of a conducive business climate a primary priority.
Flexible workforce
The workforce is notable for its adaptability and solid work habits, which have helped the country fast gain a reputation as having one of the most competitive and efficient labor forces in the region.
High-profit level
Businesses enjoy high profitability levels thanks to the competitive cost structure and the government’s generous financial incentives for investment projects in the country’s key economic sectors.
Investors from all over the world have begun flocking to Nicaragua because it has become one of the safest countries in the western hemisphere.
Common Nicaraguan business organizations
- Sociedad Anónima: Corporation with shareholders.
- Society collaborative partnership.
- Sociedad Colectiva de Responsabilidad Limitada (LLC) is the Spanish term for a limited liability partnership.
- A society with limited liability or “Simple Partnership”.
- A corporation with shareholder management (Sociedad en Comandita por Acciones).
- Foreign subsidiaries are another option for entrepreneurs.
Company formation in Nicaragua necessitates careful consideration of both the nature of your firm and your intended methods of operation. Nonetheless, a Sociedad Anonima, in which ownership is delegated to stockholders rather than individuals, is the most prevalent and customary kind of business in Nicaragua.
Procedures for establishing a company in Nicaragua
The steps below outline the general procedure for forming a corporation in this country, which is relatively simple and has few prerequisites:
Filing an application to form a company
Choosing a company name and getting it registered with the Companies Registration Office
Articles of organization are prepared with all pertinent information. Including the company’s name, legal address, aims, shareholders’ names, managers’ names, number of shares, capital, etc.
Trade license application filing with the appropriate government agency
In order to legally conduct business here, a corporation, limited liability company, or branch must first register with the Mercantile Registry, the Nicaraguan Tax Authority, and the local municipality.
To limit personal liability, a Nicaraguan limited liability company (LLC) must have at least one partner’s name in its legal name and the phrase “Compania Limitada” (and limited company). The phrase “Sociedad anónima” must be included in the name of any Nicaraguan corporation, and “succursal Nicaragua” must be included in the name of every Nicaraguan branch office.
It takes only a few weeks to form a legal business entity here. Timeframes for procuring permissions and registrations can vary according to the permit to be acquired and the governing agency involved. Additional permits and registrations may be required depending on the business sector.
Fill tax returns
A Nicaraguan company must begin filing monthly tax returns as soon as it is incorporated, even if it is not yet in operation. In addition, every corporation operating in Nicaragua must have a local representative who is either a citizen or legal resident of Nicaragua.
An entrepreneur or investor setting up a shop in Nicaragua would do well to research the local legal framework, relevant international legislation, and necessary capital requirements.
