The most aggressive fiscal incentives in the region

The government of Nicaragua recognizes the importance of foreign direct investment as a key element of the country’s growing economy, which is why it strives to continue making the country a great investment destiny for investors, by providing the following benefits.

 

Incentives for the tourism industry law (306)

The Tourism Industry Law of Nicaragua offers various tax incentives for investment in this sector and it is considered the most generous and competitive in the region. This provides incentives and benefits for investment in accommodation, food and beverage, tour operators, tourist transportation, airlines, among others. Some of the incentives are: exemptions of the income tax (IR), value added tax (VAT), property tax (IBI) and import tax and duty.

Special law on exploration and exploitation of mines (387) and temporary admissions law (382)

Given the importance of the mining sector for economic development, the State guarantees fiscal stability for the domestic and foreign investment related to mining activities which benefits from the Temporary Admissions Law.

The Temporary Admission Regime for Active Improvement is a tax system that allows both the import of goods into the national customs territory and local purchase of goods without payment of any duties and taxes. Companies that export directly or indirectly, at least 25 percent of its total sales and an export value not less than US$ 50,000, are eligible for this scheme.

Pensioners and retirees law (694)

Nicaragua passed legislation to encourage retirees and pensioners to retire in the country. The Law of Resident Pensioners and Retirees provides benefits mostly in the form of tax incentives that help retirees save money by allowing the following: Importing household goods, building materials and new cars with tax exemptions.

Tax concertation law (822)

The Tax Concertation Law provides numerous tax benefits to certain productive sectors of the economy in order to promote their growth and development.

Tax benefits to exporters and agricultural producers

It provides a 0 percent Value Added Tax (IVA) rate to exports of domestically produced goods or services, and to some agricultural products.

Tax benefits to forestry sector

The Tax Concertation Law (822) extended the benefits granted by the Forestry Incentives Law (462) up to the year 2023. This includes exemption of Municipal Taxes, Property Tax (IBIN) and other payments duties and taxes.

Law on the promotion of renewable electricity generation from renewable sources (532)

This law seeks to promote electricity generation from renewable sources by providing projects that are generating power with renewable sources with benefits, such as exemption of import duties and value added tax, municipal taxes, stamp taxes and any other taxes that may exist for exploitation of natural resources.