Nicaragua Company Formation & Entity Choice

Entity types and incorporation

The most common vehicle for business in Nicaragua is the Sociedad Anónima (S.A.), governed by the Commercial Code; companies register with the Registro Público Mercantil (commercial registry) and the DGI. Foreigners may fully own a Nicaraguan company.

• Sociedad Anónima (S.A.) — Corporation with limited liability; the most common entity, requiring at least two shareholders (Código de Comercio de Nicaragua)
• Other entity types — Sociedad Colectiva (general partnership), Sociedad en Comandita (limited partnership), branch of a foreign company, and sole trader (Código de Comercio de Nicaragua)
• Minimum shareholders (S.A.) — 2 (Código de Comercio de Nicaragua)
• Minimum share capital (S.A.) — Approx. C$10,000 (about USD 400) is commonly used; there is no strict legally mandated minimum and capital need not be deposited at incorporation NIO ((approx — confirm)) (Código de Comercio de Nicaragua)
• Step 1 — Deed of incorporation — Draft and notarise the act/deed of incorporation and bylaws (escritura de constitución) before a Nicaraguan notary (Código de Comercio de Nicaragua)
• Step 2 — Corporate and accounting books — Acquire and present the mandatory corporate and accounting books for registration (Código de Comercio de Nicaragua)
• Step 3 — Commercial registry — Register the company and its books with the Registro Público Mercantil (commonly via the Ventanilla Única de Inversiones, VUI) (Código de Comercio de Nicaragua)
• Step 4 — Tax registration — Register with the DGI to obtain the RUC (Registro Único de Contribuyentes) and a municipal licence (Ley de Concertación Tributaria (Law 822))
• Commercial registry fee — 1% of registered capital, capped at approx. C$30,000 (about USD 1,200) NIO ((approx — confirm)) (Arancel del Registro Público)
• Incorporation timeline — Approximately 4–6 weeks ((approx — confirm)) (Código de Comercio de Nicaragua)
• Foreign ownership — 100% foreign ownership of a Nicaraguan S.A. is permitted; a local legal representative is required (Código de Comercio de Nicaragua)
• Core annual compliance — Annual IR return, monthly IVA and IR-withholding returns, monthly INSS/INATEC filings, municipal sales tax (1% monthly) and the annual municipal registration tax (2%) (Ley de Concertación Tributaria (Law 822) / Plan de Arbitrios Municipal)