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Nicaragua: A Hub for Global Businesses - But Don’t Forget Compliance

In recent years, Nicaragua has emerged as an attractive destination for international companies looking to expand their reach into Central America. The country’s business-friendly environment and favorable tax regime make it an ideal location for ventures in tourism, energy, and innovation.

It’s essential to understand the legal system in Nicaragua before doing business there. The Judicial Branch oversees all national trials and executes judicial sentences, with a two-tier system governed by the Organic Law of the Judicial Branch enacted in 1998.

Incorporating a Company in Nicaragua

To incorporate a company in Nicaragua, organizations must follow a specific set of steps:

  • Drafting an Act of Incorporation
  • Purchasing accounting and corporate books
  • Submitting documents to the Investment Service
  • Registering as a trader and accounting books with the Commercial Registry
  • Securing a single registration document
  • Appointing a Nicaraguan resident legal representative
  • And more

Liabilities Associated with Directorship in Nicaragua

In addition to these formalities, it’s crucial to understand the liabilities associated with directorship in Nicaragua. Directors are generally not personally liable for the company’s obligations, but they can be held accountable if they fail to fulfill their duties or breach the law.

Parent Company Liability

Regarding parent company liability, specific regulations are lacking. However, claimants can attempt legal action against parent companies in case of disputes. Consumers can also pursue claims against parent companies responsible for producing, distributing, or commercializing goods in Nicaragua through a local distributor.

Frequently Asked Questions about Corporate Compliance in Nicaragua

  • What is the corporate income tax rate in Nicaragua?
  • How do permanent establishment laws apply to foreign companies operating in Nicaragua?
  • Are there free trade zones available for international businesses?
  • What are the taxable periods for corporations in Nicaragua?

Biz Latin Hub’s Services for Business Compliance in Nicaragua

At Biz Latin Hub, we offer a range of services to help businesses navigate the complexities of corporate compliance in Nicaragua. Our team of experts can provide:

  • Legal services
  • Accounting and taxation support
  • Hiring and visa processing assistance
  • And more

Don’t Let Nicaraguan Law Hold You Back

Don’t let the intricacies of Nicaraguan law hold you back from launching or expanding your business in this vibrant country. Contact us today to learn more about our comprehensive range of market entry and back-office solutions in Latin America and the Caribbean.