Incorporating in Nicaragua is a quick and simple process. It takes 10 to 15 working days to establish a company ready to do business in Nicaragua once the parties have signed the incorporating deed and bylaws. The preferred corporation in Nicaragua is a “Sociedad Anónima”, which is a stock corporation.
Nicaraguan corporate requirements
There must be a minimum of two investors, who may be Nicaraguans or foreigners. Natural people or other companies may possess shares of stock (Nicaraguan or foreign corporations). The stockholders of a new business do not need to be physically present in Nicaragua to form it; instead, they may give Powers of Attorney to be represented there. It is necessary to establish a Board of Directors, which is made up solely of shareholders. The president and secretary-treasurer are chosen when there are just two shareholders. A Treasurer and extra board members are chosen when there are more than two shareholders.
Nicaraguan company registration
It is necessary to take the following actions to register a company in Nicaragua:
Select a company name, then check to see whether it is available
To be sure that the name you have selected is not already being used by another firm, you may verify with the National Business Registry (Registro Nacional de las Personas Jurdicas, RNPJ).
Drafting of the corporate charter
A Nicaraguan attorney and notary public prepare the incorporation document and bylaws. Certain information, including shareholder identity, the primary business to be conducted by the company, share capital amount, and the number of shares to be owned by each shareholder, are needed to draft the incorporation document and bylaws.
Send the RNPJ the articles of incorporation
The name of the business, its purpose, its capital structure, and the names, and addresses of its shareholders and directors. Any other pertinent information needed by law, must all be included in the articles of incorporation, which must be signed by the company’s shareholders and directors.
Pay the fees that are due
The RNPJ will collect a registration fee for the business as well as any extra payments for the registration of the business’s patents or trademarks.
Obtain any licenses or permissions required
Your ability to lawfully do business in Nicaragua may depend on the kind of licenses or licenses you need to get. Depending on the activity of your corporation, find out the licenses that are required for you to start a business in Nicaragua.
Additional registrations
The Nicaraguan Tax Authority (Dirección General de Ingresos, DGI) and City Hall registrations are necessary once the company has been registered with the Public Companies Register. It can also be necessary to register the company as an importer and to hire employees via the Nicaraguan Institute of Social Security (INSS).
Taxation of corporations in Nicaragua
The municipality and the tax authorities both require the SA to pay a corporation tax each year. The SA’s annual sales will determine this. If SAs engage in any economic activity, they must also pay additional taxes like income tax and sales tax. Additionally, a SA is required to contribute proportionately to the workers’ social security benefits and make a monthly contribution to the institute of technology. With a rate cap of 30%, income taxes (IR) will be based on the company’s annual revenue. Municipality taxes are due yearly in the amount of 1% of monthly sales, annual income taxes are due in the amount of 3% of total sales. Trash municipality taxes are due and are dependent on the income of the annual sales, and a withholding tax is due in the amount of 2% over any activity. Sales taxes paid in advance are 15% of the SA’s monthly bills. The Social Security percentage of the employer is 21.5% over the salary of the employee monthly. A percentage of the employee’s monthly wages equal to 2% is contributed to the Institute of Technology.
