If you want to do business in Nicaragua, this article explains the tax laws for a Sociedad Anónima (S.A.), which is the most common company type in Nicaragua.
Nicaragua taxes corporate income on a territorial basis. This means that income earned outside the country, from our research, but seek professional advice, is not subject to taxation. Income accrued within the country is taxed at a corporate income tax rate of 30%. Nicaragua ranks 136th overall with regards to corp. taxation rate internationally.
The valued added tax rate in Nicaragua is 15.00%, that ranks the country as 79th when compared to value added tax rate worldwide. In terms of other taxation, an employer will contribute 19% to the equivalent of a social security fund and an employee will contribute 6.25%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 76hours. Contributing to this is the number of yearly labor tax payments, which is 2 in NI.
Thin cap standards aren't in effect. Thin capitalisation refers to any type of restrictions on a business and the debt-to-asset ratios.
Dividends received are generally tax-exempt. However, stock dividends may be considered capital income and subject to a withholding tax of 10%. A dividend is a distribution of a portion of earnings of the business, established by the board, to shareholders. Dividends can be either cash payments, shares of stock, or other property.
Capital Gains are generally subject to a final withholding tax of 10%. Reduced rates may apply for gains from the transfer of Nicaraguan shares that took place outside the country (5%), gains from the lease of fixed assets and non-fixed assets (7% and 5%, respectively) and gains from the transfer of certain assets such as real estate or vehicles (progressive rate from 1% to 4%). A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.
The interest withholding tax rate is estimated at 15%. Which means that the taxman expects legal entities to pay tax on15% of interests remitted abroad. The dividends withholding tax rate is 15%. This should be interpreted that usually the tax authorities expects legal entities to automatically withhold 15% of dividends remitted abroad. The royalties withholding tax rate is 15%. This means that the taxman expects legal entities to withhold 15% of royalties paid to non-residents. Payments on dividends, interests or royalties to residents of jurisdictions considered tax havens are subject to a withholding tax of 17%.
There is no known tax on wealth in Nicaragua. There are real property and inheritance taxes. There are no widely used research and development tax incentives in this country.
The above is not tax or legal advice for your particular circumstances. We are able to refer you to an expert in Nicaragua who will advise you. Click the free consultation button above or press Incorporate now if you are in a hurry.
It takes approximately 67 hours to file and prepare documents for a Nicaragua Civil Law.
The corporate tax is approximately 30% which is 136 in the world.
Owners of a company in Nicaragua are not allowed to carry back a loss and may be allowed to carry forward a loss for 3 years.
The vat rate in Nicaragua is 15% which ranks 78 in the world.
When examining a jurisdiction in which to incorporate, the first thing to look at is the legal code. The underlying law in Nicaragua is civil law law. You will want to get some local advice as to how to best structure a company in Nicaragua. Electronic signatures are permitted.
The abbreviation NI is for Nicaragua and the most common legal entity type in Nicaragua is a Sociedad Anónima (S.A.).
The average time to incorporate is 30 days to setup a Sociedad Anónima (S.A.) in NI. The minimal capitalization, or amount you're expected to put into a bank, is 0, This means you don't have any minimum share capital. The types of consideration you can use to fund your business is most commonly USD, EUR, and any legal currency.
Yes, one is allowed to re-domicile a Sociedad Anónima (S.A.) from NI. You are usually allowed to change the jurisdiction of the company, pending certain procedures.
There must be at least This means it is not possible for you to own a Sociedad Anónima (S.A.) in Nicaragua as a sole shareholder. You must have other shareholders, they can be nominees or de facto shareholders. Corporate Shareholders are permitted, which means you can have a legal entity as a shareholder. Foreign ownership is tolerated, up to 100% of the total shareholding.
A company is only required to have 1 director on the board. Additionally, corporate directors are permitted. Directorship information is ususally not shared with the general public. There is a requirement to have annual meetings of shareholders.
A registered office is a requirement, whom the company will pay yearly, for an office which can receive any lawsuit papers on behalf of the business. A related requirement, a company secretary is also mandated by the government.
There is a legal obligation to file accounts on a yearly basis. On that note, there is oftentimes a requirement to have these accounts audited.
Thin capitalization rules are not in effect.
A corporate director is permitted, meaning this country is a good option if you are setting up a structure where you want to protect director liability.
The directors are not disclosed in the public registry of Nicaragua, MIFIC. Shareholders are not disclosed in the MIFIC.
Typically companies take 30 days to setup and there are 1 director(s) required and 2 shareholder(s) required at the time of incorporation.
Overall we think Nicaragua is a ok option and have given it a score of 34 as an IO score, using the Incorporations.IO proprietary formula.
We can help you form a company in Nicaragua. Click the button above for a no-obligation quote. We will provide you with all the necessary documents to open a bank account as well as a registered office in Nicaragua, which is required by law.
We can help you with your incorporations needs for an initial payment of just $1000.
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The standard process typically takes between two (2) to three (3) weeks depending on when we receive all the required information from you. Once we receive your information, we will email you a complete set of documents for your review within 3 working days upon confirmation of payment. After executing the documents, you will need to mail them to us and we will formally submit your application for filing with the Registry. The Registry will then take about 3-8 working days to process the incorporation and produce certificates necessary for opening your bank account.
Applying for Your Bank Accounts:
Incorporations.IO maintains close working relationship within our extensive network of partner banks to help you apply for and receive banking services that are most appropriate to your specific situation. From the time of verification of incorporation it can take (1) one week to (2) two weeks to apply for and receive a bank account. We work primarily with banks that allow for remotely opened accounts to ensure you are ready to do business as soon as possible.
Applying for Payment Processing:
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