Business entities in Nicaragua in 2022
Nicaragua is one of the poorest countries in Central America. It however consists of a free-market economy with an abundance of natural resources including coffee, beachfront real estate, lakes and minerals. Bejarano ADF Consultants will assist our Clients with incorporating the optimal corporate structure. There are several ways of doing business in Nicaragua, the most common being the setting up of a corporation. Foreign entrepreneurs may also opt to set up a joint stock company, a branch office or a representative office.
The Nicaragua Corporation (Sociedad Anónima – SA)
- The Nicaragua Corporation is the most commonly used type of business entity by entrepreneurs. A corporation must appoint at least 1 director and 2 shareholder who can be of any nationality. The minimum paid-up share capital required to complete the incorporation process is US$1;
- The corporation must appoint an auditor and must submit audited financial reports annually.
The Nicaragua branch (Sucrusal)
A Nicaragua branch office can be established by a foreign company. The parent company will be responsible for this entity and all its operations. A legal representative who is a resident of Nicaragua must be appointed by this entity.
Table of comparison between Nicaragua entities
| Corporation | Branch | |
|---|---|---|
| Also known as: | SA | Sucursal |
| How long to set the company up? | 2 weeks | 4 weeks |
| How long to open company bank account? | 4 weeks | 6 weeks |
| Legal liability? | Limited | Limited |
| Wholly foreign owned? | Yes | Yes |
| Minimum paid - up share capital? | US$1 | US$1 |
| File annual tax return? | Yes | Yes |
| Tax registration certificate required? | Yes | Yes |
| Recommended corporate bank account? | Citibank | Banpro |
| Does our Client need to travel? | No | No |
| Resident director required? | No | No |
| Resident shareholder required? | No | No |
| Minimum directors allowed? | 1 | 1 |
| Minimum shareholders? | 2 | 1 |
| Tax identification code needed? | Yes | Yes |
| Nicaragua resident representative required? | Yes | Yes |
| Corporate shareholders allowed? | Yes | Yes |
| Corporate director(s) allowed? | Yes | Yes |
| Statutory audit required? | Yes | Yes |
| Nicaragua corporate tax rate? | 30% | 30% |
| Annual financial statements required? | Yes | Yes |
| Regulated by? | Ministry of Development, Industry and Trade | Ministry of Development, Industry and Trade |
| Allowed to issue sales invoices? | Yes | Yes |
| Allowed to sign contracts? | Yes | Yes |
| Allowed to import and export goods? | Yes | Yes |
| Can rent an office space in Nicaragua? | Yes | Yes |
| Can buy Nicaragua property? | Yes | Yes |
| Total Nicaragua business setup costs in yr. 1? | US$15,750 | US$16,850 |
| Subsequent annual costs (incl. accounting and tax fee)? | US$6,300 | US$5,500 |
| Sample engagement invoice? | View invoice PDF | View invoice PDF |
