Nicaragua Info
Joined: 16 Nov 2006
Posts: 16
Home Country: nicaragua
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 Posted: Thu Nov 23, 2006 4:32 am Post subject: DOING BUSINESS IN NICARAGUA / NICARAGUA BUSINESS GUIDE |
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DOING BUSINESS IN NICARAGUA
STARTING A BUSINESS
STANDARDIZED COMPANY
Legal Form: Private Limited Liability Company
Minimum Capital Requirement: 0
City: Managua
Registration Requirements:
Procedure 1. Sign the incorporation papers before a Notary Public
Time to complete: 3 days
Cost to complete: USD 875
Comment: The documents of incorporation as well as the corporation's bylaws must be drafted by a Notary Public. It is customary to include the corporation's bylaws in the document of incorporation. Most Notaries will also perform the remaining steps (explained in the following steps) in the incorporation process, for a fee of US$200.00 (average). Notary cost: US$750 - US$1000.
Procedure 2. File incorporation statutes for commercial registration and apply for tax and municipal registration at the one-stop shop in Managua
Time to complete: 30 days
Cost to complete: see comments
Comment: In January 2004, the Government created in the Ministry of Commerce (Ministerio de Fomento, Industria y Comercio) an office called Ventanilla Unica de Inversiones (Unique Office for the Investment), in which companies can file commercial and tax registration at windows in the one-stop shop. The one-stop shop (Ventanilla Unica) cannot process any registrations. It forwards the documentation to the relevant agencies on a daily basis. The VUI facilitates 4 procedures: company registration, tax registration at the Dirección General de Ingresos (DGI), municipal registration, and (for foreign companies) the foreign secretary (Secretario Exterior). Fees can be paid at a bank office at the VUI. Informational service is also provided. For start-up capital of up to C$50.000.00: US$50.00. For start-up capital of C$51.000.00 and up: 1% of start-up capital up to a maximum of US$ 1,300.00.
The cost for commercial registration is as follows: For start-up capital of up to C$50.000.00: US$50.00. For start-up capital of C$51.000.00 and up: 1% of start-up capital up to a maximum of US$ 1,300.00.
Registration with the tax authority Dirección General de Ingresos (DGI) and obtaining the tax identification number (Registro Unico del Contribuyente, RUC);
Regardless of whether or not the company has any income, it must declare before the DGI (Nicaraguan Tax Authority) each month. If the company has no sales, they will not pay any taxes. However they will have to pay the fees for the services performed by their representative in Nicaragua before the DGI. Fees are US$ 5.
Registration with the City Hall (Alcaldia) of Managua: Regardless of whether or not the company has any sales it must declare before the City Hall each month. If the company has no sales it will not pay any taxes, just the fees for the services performed by their representative in Nicaragua.
Municipal registration Fee: 1% of start-up capital + Proof of Registration: .01% of start-up capital. Total: 1.01% of start-up capital
Procedure 3. Buy company accounting books, corporate books and invoices from a bookstore
Time to complete: 1 day
Cost to complete: USD 25
Comment: All corporations must keep four corporate books described as follows: Two accounting books: Diary and Ledger; Two corporate books: Minutes book and Shares registration book.
Procedure 4. Pay the inscription fees and complete the commercial registration
Time to complete: 1 day
Cost to complete: book inscription USD 20.00, commercial registration USD 15.00
Procedure 5. Register for general sales tax (Impuesto al Valor Agregado, I.V.A.) at the local Administración de Renta; Register accounting books
Time to complete: 2 days
Cost to complete: no charge
Comment: Companies with an annual income higher than C$240,000 will be levied IVA. The accounting books must be registered at the local office of the Administración de Rentas (Tax Collector's Office).
Procedure 6. Register for social security and public health with Instituto Nicaragüense de Seguridad Social (INSS)
Time to complete: 2 days
Cost to complete: no charge
TAXATION
In 2002, the individual income tax ranged from 10% to 25%, and the corporate income tax rate was 25%, down from 30% in 1999. The main indirect tax is Nicaragua's value-added tax (VAT), introduced in January 1975 with a standard rate of 6%. In 2003, the standard rate had risen to 15%, and there were two reduced rates, 5% and 6%, applied to international flights, land leases, and hotel accommodations, among other things. Basic necessities were zero-rated; water, power, exports and imports. Exempted from VAT were finance, petroleum products, publications and medicines. Other taxes included a luxury tax generally lower than 15%; a 1% municipal tax levied on sales; a 1% tax on net worth; and a real estate tax at 1% of assessed value. |
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