Foreign Investment & Business in Nicaragua. Residency as Foreign Investor.-
Foreign Investment & Business in Nicaragua.
Nicaragua is attracting more and more foreign investment in several areas, some of which are big investment like energy, mining, tourism, garment-based free zone companies, farms, real estate, etc. and some others are small investments.
Either type of investment is positive for the country and for Nicaraguans; that is why is mandatory to follow the right track.
For a foreign person it is mandatory to know the steps he/she must follow:
The first step is to incorporate a Corporation in Nicaragua; the best to do it is through a Sociedad Anonima.
The second step is to invest the money in Nicaragua – purchasing a property, importing equipment, etc. If the investment in Nicaragua is over thirty thousand dollars in any kind of business e.g., tourism, industry, farms, etc. the government will consider you a Foreign Investor.
The third step will be the application for Residency as a Foreign Investor. To be considered a Foreign Investor, the Ministry of Economy of Nicaragua must confirm the investment, an Appraiser will visit to the property or investment. Then, a certification will be issued and a copy will be sent to Immigration.
Immigration will require the basic documents:
1. Police Record 2. Health Certificate 3. Birth Certificate 4. Copy of the Corporation documents and a copy of the Power of Attorney of the legal representative. 5. Copy of RUC number from DGI – the equivalent of the IRS in Nicaragua – the RUC is the id of the Corporation. To obtain a RUC for the Corporation or SA a Nicaraguan or a Nicaraguan Resident must be appointed as Legal Representative. The accountant of the Corporation can be appointed. This representation can be changed once one of the business partners obtains residency.
A business person or foreign investor will obtain condition 1 residency – that means permanent for five years and with the right to work in Nicaragua. People with Condition 2 – permanent without right to work – can´t be a legal representative – Retirees obtain Condition 2, that means a retiree can run a Corporation in Nicaragua but can´t be appointed as the legal representative at DGI.
Investment through a corporation is the best way to invest, because it is a legal entity separate and distinct from its owners and there are several advantages. One possible disadvantage would be to start it in some departments which are not used to dealing with foreign investors. Managua´s Registry is more foreign-investor friendly. It doesn't matter where the business will be—for example, in Rivas or Estelí—you can incorporate in Managua and make the company tax report anywhere in the whole country. The Corporation is necessary because as a Sole Proprietorship a foreign person can't get a RUC.
Requirements to incorporate a Corporation ( S.A.) in Nicaragua:
1. Sign the articles of Incorporation in a Public Deed with a Nicaraguan Notary, in Nicaragua 2. Registration of the Articles of Incorporation at the Public Registry for Commerce. 3. Registration of the Company Books (Minutes Record, Stock Record, Journal and Ledger) at the Public Registry for Commerce. 4. Registration as a Merchant at the Public Registry for Commerce. 5. Registration at DGI (equivalent to IRS in the USA) 6. Registration at the Municipality. 7. Issue of the Stock and the registration in the Stock Record Book. Minimum Information to the Articles of Incorporation: a. Full name of all the partners. (Minimum 2 business partners) b. Name of the Company. c. The Purpose of the Company – Kind of business it is going to do. d. The Initial Capital. e. The Director Board (members).
Tips: Immigration usually takes 45 days to grant residency as minimum. It could be even 60 days; the cost now is C$ 6,400 (Cordobas) = $ 270. The Corporation will meet the requirements for the business partners and their families to obtain residency. For Foreign Investor – the same as retiree – the law gives to the resident the an exception to pay a deposit equivalent of a one way airplane ticket – people who apply for residency as spouse, missioners, workers, NGO´s members, etc, must pay the deposit in Immigration.
Paul Tiffer R. Nicaraguan Attorney at Law firstname.lastname@example.org
P.S. In January 2014 I found another option for people who haven´t invest their money yet, but it is the process and already has incorporated a Corporation or a Nicaraguan Sociedad Anónima, it is a provisional residency per one year, please check this: http://www.nicaliving.com/node/21765