Procedural Guide to Start a Business
Establishing a Company in Nicaragua
1. Obtain a cedula (legal ID). This requirement is necessary in order to be owner/incorporator of a new business.
2. In order to incorporate, go to a notary. They have to draw up the papers. In some locations, both the incorporation and a "commercial constitution" may be needed.
3. File the papers in the Registro Publico for the department where you are incorporating. Tax information must be filed in the same department as the business is registered. Buy a set of "books" for the business. The Public Registry will stamp them to make them official.
4. Go to DGI (Direccion General de Ingresos) for income tax purposes (La Renta) and get a tax number (RUC).
5. As a city resident, it may also be necessary to file with the city.
6. Process complete.
The Administrative Steps for Setting Up a Business:
New business owners must be preapred to file a tax return with La Renta (tax department) twice a month—even if the operation is not yet underway. However, as a convenience, both returns can be filed before the 4th of the following month.
In order to open a bank account for business, the same paperwork (two references, cedula, etc.) is required as for a personal account plus an Acta (certificate) naming the bank and possibly some additional paperwork.
Foreigners can do business anywhere in Nicaragua, but they need to have a clause that says Nacional y Internacional in their constitucion/razon commercial.
With a sociedad Anonima (corporation) it is possible to be a major shareholder without residency but at least 1% ownership by a Nicaraguan is required.
For the RUC (tax number) there are two options for the business set up:
An RUC with a fixed tax rate or an RUC with a variable tax rate. The fixed tax rate is preferable for a small home based business. It is enough to have an RUC number with a fixed tax rate to be in a small business like a local store or café.
A matricula (registration certificate) must also be obtained from the Alcaldia (City Hall). Accompanying documents should include the RUC, books (business-specific, accounting, etc.), and possibly a letter of request. The next step is to pay the fee, and the certificate should be available in a few days.
For a sociedad Anonima (corporation) a variable tax rate could be the better option. Larger scale business structures will usually require many additional documents and forms, shareholder resolutions, annual meetings, and a full-time accountant.
Moving Beyond Misconception to Enter the Nicaraguan Market
Foreign investment in Nicaragua is encouraged and promoted officially by the government. Earlier fears from foreign investors and businesses as a result of President Ortega's return to power have proven unfounded. Foreign investment in Nicaragua is not only promoted, but also protected by way of the "Foreign Investment Protection Law." For more in-depth details about the rules and regulations for setting up a business in Nicaragua, we went straight to a reliable local source to get the facts. Read our informative article Mistaken Identity to learn all you need to know to get started.
How We Can Help
The opportunities in Nicaragua are limitless. Whether you'd like to run your own B&B, offer tourist services, open a café or beachfront cantina, or develop an import/export business, Nicaragua is a great choice. Besides the lucrative tax saving advantages, there is great demand for foreign business entry to serve the local and flourishing international markets. Between our knowledgable local team and network of professionals, we can assist you with all of your Nicaragua business needs. Contact us today to see how we can help you get started. Nicaragua Service Request >>
