nvestment Incentives in Nicaragua

LAW 306

Nicaragua’s tourism incentive law was passed in order to attract tourism and real estate developers to Nicaragua by providing tax-free incentives to investors.

One of the major benefits to the law is that investors do not need to pay Nicaragua real estate taxes for up to 10 years. Some of the other benefits of Law 306 are as follows:

 

• 80-100% income tax exemption on rental property.
• Exemption on sales tax for products purchased for the tourist project.
• Exemption from the 1% transfer tax levied on all real estate transactions.

There are many projects in the San Juan del Sur area that have applied and qualified for Law 306 and enjoy the tax exemptions it provides. Since Law 306 was first implemented in June 1999, the Nicaraguan Tourism Institute has approved 443 tourism projects to receive benefits, for a total investment of $2.9 billion.

For a complete copy of Law 306 please click here

Retirement Incentives

Earlier this year the Nicaraguan government increased expat retiree benefits and tax exemptions that will save investors thousands of dollars.  Decree 694 from the Nicaraguan National Assembly was passed in order to better compete with programs in other Central American countries.  These new incentives are not unlike programs Costa Rica laid out in the 1980's that attracted many retired North Americans.  People who are 45 and over with a monthly income of at least $600 can take advantage of the following benefits plus more:

• import up to US $20,000 worth of household goods for your residence, duty-free
• One (1) vehicle valued at US $25,000 or less will be permitted to enter Nicaragua and be used by the retiree, duty-free
• A retiree may bring one (1) additional vehicle to Nicaragua with a value of US $25,000 or less, duty-free, every five (5) years
• Retirees constructing residential homes will be awarded a tax exemption of US $50,000 off the cost of building materials