1. What is the free zone regime?
It is a special regime of tax incentives for companies that do not trade within the country but that operate from Nicaragua importing their raw materials, creating their products and exporting them after they are finished. The purpose of these incentives is to promote employment in Nicaragua.
2. What are the tax benefits of a free zone regime?
The benefits are as follows:
- 100% Income Tax Exemption for a period of 10 years from the start of operations and 60% from year 11 onwards, if the 100% benefit is not extended for another 10 years.
- 100% exemption of taxes on imports of raw materials and machinery for its production processes of its products.
- 100% exemption from export taxes on your products.
- 100% exemption from Real Estate Tax on the properties where they operate.
3. What activities can be developed under a free zone regime?
The company that makes use of the benefits can be any company that does not sell its products in Nicaragua. Mainly the users of the free zone are companies with exports to the United States, BPOs and KPOs.
4. Regarding its operation, what kinds of free zone companies exist?
Companies can be incorporated as a user of free zones or as operators of free zones. The operating companies are those that have facilities approved within the regime to rent to companies that will work as users to export their products or services abroad.
5. What are the requirements to be authorized as a free zone company?
The requirements to be authorized as a user of free zones are:
- Letter of presentation and application.
- Presentation of the project.
- Product (s): Description and technical specifications of the product (s) to be produced.
- Lease contract of the property where it will operate.
- Copy of the Constitution of the Company.
- Copy of the General Power of Administration.
- Copy of identification of the legal representative.
- Two bank reference letters and two business reference letters from the company’s partners.
- Fill out the application form.
- Present location plan and facility plans.
- Cash receipt for a non-refundable value of US $ 300.00.
- Environmental Permit or Administrative Authorization.
- Letter of support for the project issued by the Mayor’s Office of the municipality where the company will be installed.
- Certification and/or Proof of processing of the application for the Opening License in matters of Occupational Health and Safety.
- Health License issued by the Ministry of Health – MINSA.
- Favorable opinion of the General Directorate of Customs Services – DGSA.