Although known as a tropical land of mountains, rivers, lush rainforests, and vast sandy beaches, Nicaragua is not just about beauty.
Nicaragua is strategically located in the heart of the Americas, which has made it historically attractive to investors and it has now created a secure environment for investments.
Nicaragua enjoys high levels of commerce and trade thanks to its favorable geographical location and its strategic free trade agreements with the USA, Central America, and the Caribbean.
Due to the following advantages, entrepreneurs find Nicaragua a favorable country to start a business:
- With a low barrier to entry, the process of establishing a company in Nicaragua is quick and easy from start to finish.
- Nicaragua’s strategic location in the heart of the Americas has enabled the country to position itself as a very competitive export platform to markets all over the world.
- The Government of Nicaragua has solidified the creation of a favorable business climate as a top priority for the country, to promote the development of new and existing investment projects.
- The country’s labor force is known to be flexible, with good working habits; both of which have enabled this workforce to become quickly recognized as one of the most competitive and efficient in the region.
- The Government of Nicaragua offers decent fiscal incentives to investment projects in major sectors of the economy, which, fused with the competitive cost structure, allows companies to enjoy high levels of profitability.
Additionally, Nicaragua has become one of the safest countries in the western hemisphere, an advantage recognized internationally by investors who have relocated to the country.
Main types of business structures in Nicaragua
- Joint-stock company – Sociedad Anónima
- Partnership – Sociedad Colectiva
- Limited liability partnership – Sociedad Colectiva de Responsabilidad Limitada
- Limited partership – Sociedad en Comandita Simple
- Joint-stock partnership – Sociedad en Comandita por Acciones
Entrepreneurs can also choose to establish a branch of a foreign company.
When starting a business in Nicaragua, the company structure you should choose will depend on your type of business and on how you want to conduct your business operations. But the most common and usual form of corporation in Nicaragua is a Sociedad Anonima, in which ownership is divided by shares of stock.
General company formation process in Nicaragua
The process for incorporating a company in Nicaragua is straightforward and the requirements are minimal, and it generally involves the following process:
- Submitting a company registration application
- Defining the name of the company and obtaining approval from the Companies Registration Office
- Preparation of the company’s articles of association containing complete information such as the company name, legal address, company goals, names of shareholders and managers, amount of shares, company capital, etc.
- Registration as a trader in the company registration office
Whether a corporation, LLC, or a branch is being used in Nicaragua, they must all be incorporated by a public deed before a Nicaraguan public notary and should be documented with the Mercantile Registry, Nicaraguan Tax Authority, and municipal authority where the company is conducting business.
Regarding name requirements, LLCs in Nicaragua must include at least one of the names of their partners in their legal name, followed by the words “y compañía Limitada” to restrict the responsibility of the partners. Corporations in Nicaragua must include the words “Sociedad anónima”; and branches in Nicaragua must include the words “sucursal Nicaragua”.
A company in Nicaragua can be incorporated and registered in just a few weeks. Some extra permits and registrations may apply, depending on the business sector, and the timescales for procuring permits and registrations can differ, depending on the permit to be acquired and the governmental agency involved.
Once established, even if not yet operating, a Nicaraguan company must file monthly tax returns.
Also, every company in Nicaragua must appoint a legal representative, which must be a Nicaraguan citizen or a Nicaraguan legal resident.
When establishing a company in Nicaragua, the entrepreneur or investor must do due diligence in respect of legal processes, international regulations, and sufficient investment for success.
But to save yourself the stress, you can entrust this process to a firm with the right knowledge and expertise. In other words, let’s go ahead and contact your Damalion expert now for your company formation in Nicaragua.
