Page 189 - Caribbean-Central America Profile 2018

NICARAGUA

CARIBBEAN-CENTRAL AMERICA PROFILE 2018

TOURISM INVESTMENT INCENTIVE National Interconnected Grid (SIN). 5. Exemption of taxes on the exploitation of
LAW 2. Exemption of the Value Added Tax (IVA) natural resources for a maximum period of
The Tourism Incentives Law, which grants levied on machinery, equipment, material five years after the beginning of operations.
special incentives to the tourist oriented industry and raw material utilized during pre- 6. Exemption of Fiscal Seals Tax incurred by
allows: investment stage, construction of structures, the construction or operation of the project
• 80% to 90% income tax (IR) exemption. including the construction of the sub or expansion of a project for a period of ten
• Property tax exemption for 10 years. transmission lines necessary to transport years.
• Import tax and value-added tax exemption energy to the Sistema Interconectado
on the purchase of accessories, furniture, or Nacional or National Interconnected Grid FREE ZONES / EXPORT
equipment. (SIN). PROCESSING ZONES
• Tax exemptions related to project implementation Within the free zone regime, the main export
on value-added tax on design/engineering and For “isolated systems” with their own products include apparel, auto wire harnesses
construction services and exoneration of import generation facilities, this exoneration and agricultural products. The service sector
duties and taxes and of the General Value Tax covers pre investment, construction and all within the free zone regime has become
(I.G.V.) for the local purchase of construction the investment made in distribution grids an emerging force in Nicaragua, offering
materials and fixed building accessories. associated with the project (i.e. panels and diversified and higher value added services
• Tax incentives can be extended if project solar batteries for solar energy generation). such as Business Process Outsourcing (BPO),
undergoes extensive expansions. Knowledge Process Outsourcing (KPO), and
3. Exemption of the income tax (IR) for a Information Technology Outsourcing (ITO).
RENEWABLE ENERGY INCENTIVE maximum period of seven years. During
LAW this same period, the income derived from The Export Processing Zone Law (Ley de Zonas
The Law for the Promotion of Energy the sale of carbon dioxide bonds will also Francas) allows for:
Generation from Renewable Sources promotes be exempted. • 100% exemption of income taxes.
the development of new projects, expansion • Full exemption from Property and Municipal
of existing ones, and biomass and biogas 4. Exemption of all the Municipal Taxes on taxes.
energy sources. Fiscal, economic and financial real estate, sales and registrations during the
incentives are granted to this effect: construction of a project, for a period of ten • Exemption of all import duties, levies and
years to be applied in the following manner: sales taxes on the import of raw materials,
1. Exemption of customs duties on the exoneration of 75 percent during the first supplies, machinery, equipment, and parts.
importation of machinery, equipment, three years; 50 percent the five following • Allows for stand-alone free zones to operate
material and raw material necessary for years and 25 percent for the last two years. anywhere in the national territory.
all construction of stations, including sub Fixed investment in machinery, equipment,
transmission lines necessary for energy and hydroelectric dams will be exempted In addition, other advantages of this sector include:
transportation from the generation facility from all taxes and duties, for a period of ten • Competitive labour cost.
to the Sistema Interconectado Nacional, or years. • Exemption from foreign exchange regulations.

Starting a Business - Registration Requirements
No. Procedure Time to complete Costs
1 Sign the incorporation papers before a notary public 3 days USD 875

Buy company accounting books and corporate books
2 1 day NIO 800
File incorporation statutes (acta constitutiva), register
NIO 350 (registration of accounting books) + NIO
3 accounting books (sellado de libros) and register as a trader 1 week
300 (application as a trader)
(inscripcion como comerciante)
1 day (simultaneous 1% of capital (Commercial Registration) within a
4 Pay the inscription fees with previous minimum of NIO 1,000 and a maximum of NIO
procedure) 30,000 + NIO 100 (inscription of internal books)
Obtain the DUR (Documento Unico de Registro), a single
document that allows registering at the same time for sales 1% of capital (municipal license fee) + 1% of
5 of taxes (RUC), social security (INSS), and the pre-municipal 1 day municipal license fee (municipal license document)+
license (pre-matrícula) at the one-stop shop or at the DGI NIO 5 (form for municipal license)
(Dirección General de Ingresos).

6 Obtain a municipal license (matrícula) 1 day no charge
Source: The World Bank Group

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