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Setting Up and Starting a Corporation in Nicaragua

Six Steps to Setting Up Your Corporation in Nicaragua | Six Weeks

Steps Required to Start a Corporation in Nicaragua

Every entrepreneur is aware of the fact that establishing a corporation, everywhere in the world, not necessarily restricted to the Nicaraguan area, can prove a rather difficult task to achieve.

The phenomenon occurs due to a number of bureaucratic complications which, nonetheless, can be avoided as long as several basic steps are followed.

These steps, applied to Nicaragua, are six and will take up to six weeks so as to complete the registration of a corporation in Nicaragua.

A detail meant to encourage the potential foreign businessmen in Nicaragua can be found in the foreign corporations that already do business here.

For instance, we have the Intercontinental Hotels Corporation (with the main offices in New York) activating on Nicaraguan territory within an international hotel chain; Colgate-Palmolive (in its turn a US corporation) dealing with toilet items, soaps, health care commodities; Tenneco (another US corporation) specialized in fertilizers.

The list can go on, however we are interested in the above mentioned steps necessary for a successful registration. These stages form the interest of both the local and the foreigner investor.

Therefore, when an entrepreneur aims at establishing a corporation, the first thing he has in mind is that his corporation is going to be a legal entity. In fact, all the subsequent procedures are linked to the status of legal entity.

Without this status, a corporation will not be legally allowed to enter into a contract, nor will it gain the permission to sue (as it will not risk to be sued) in case certain obligations are ignored by the contractual parties.

So the very first step is to sign the papers concerning the constitution of the corporation (these are known as the incorporation papers). These papers, along with the rules relating to the election of the business directors, to the selection of auditors and other norms of internal governing, have to be prepared by a Notary Public and signed before him. In Nicaragua, this stage will take up to three days for completion.

After the signing of the incorporation papers, you have to register them for tax and commercial purposes to the Office for Investment (Ventanilla Unica de Inversiones), which enables the company registration, the civic (local) registration, the tax registration to the Nicaragua Tax Authority, and the registration for foreign businesses to the foreign secretary.

Therefore, the Office for Investment is just a means of transferring the required registration files to the corresponding agencies. Additionally, there are two obligations that a corporation must fulfill each month: 1) declaring (written declaration) the monthly income to the National Tax Authority; 2) declaring the monthly income to the city hall of Managua.

In either case, the declarations must be filed even if no income has been registered during the interval of a month. This stage is the longest, since it takes a month for completion.

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