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Doing business in Nicaragua

How quickly can I set up a business?

A regular business can be set up entirely in 3 weeks or 15 business days.

What is the minimum investment needed?

The minimum investment to make is an approximately U$ 1,410.00 US dollars (Registration fees included).

How can I raise finance?

Financing projects are directed to family businesses through cooperatives, microfinance institutions and/or state projects.

If a formal company, you may apply for bank financing. If from Italy, France, Spain, Germany, you may find support for your business in locally constituted ‘Chambers’ to create contacts, find investors and also for advertising and promotion.

What are the legal requirements for setting up my business?

Regulations don´t allow unipersonal companies. You need at least 2 shareholders.

You can choose from: Establishment (a branch of your overseas business structure but constituted as one of the below structures: Anonymous Partnership, Joint Partnership with Limited Liability, Limited Partnerships with a share capital and Limited Liability Partnership)

You can also constitute a subsidiary of your foreign pre-established business.

What structure should I consider?

The structure you should choose depends on your type of business and also on how you want to conduct your operations. The usual choice of investors is the Stock Corporation.

What advice can you give me in regards to payroll and taxation requirements?

Current Personal Income Tax rates in Nicaragua are:

Band of Annual Net Income


Base tax


Applicable percentage Over the excess of


0.01     –    100,000.00 0 0.00% 0
100,000.01 – 200,000.00 0 15.00% 100,000.00
200,000.01 – 350,000.00 15,000.00 20.00% 200,000.00
350,000.01 – 500,000.00 45,000.00 25.00% 350,000.00
500.000.01 – a más 82,500.00 30.00% 500,000.00

Employers and employees also have to pay Nicaragua social security, which is called “Social Security”.

Current Social Security rates are:

  Disablement, Old age and Death and

Professional risks

Illness and maternity War victims Total
Employer 15.00% 6.00% 1.5% 22.5%
Employee 4.75% 2.25%   7 %
State   1.75%   1.75%
Total   21.5%

It is the employers’ legal responsibility to pay over employee’s tax and social security deductions to the Nicaraguan tax authorities. The retention is made by the employer directly from the employee’s salary and reports it to the Social Security Institute.

Also, there is a retention rate of 20% for non-residents working locally.

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