In the Nicaraguan legal system, sole proprietorships are not specifically regulated, and until recently, this concept has been a subject of government discussions and analyses, but without conclusions. Despite this, the Nicaraguan legal system indirectly recognizes this type of legal entity. For example, when a public limited company has been incorporated with at least two shareholders, but then, for any reason or circumstance, all the shares are acquired by a single shareholder, that company becomes a sole proprietorship.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Registration of a public limited company (Sociedad Anónima)
Act of incorporation for non-residents
If you aren’t a Nicaraguan resident, you’ll need to obtain an act of incorporation and register it at the Commercial Section of the state Public Registry (Registro Público de la Propiedad Inmueble y Mercantil). You must appoint a legal representative with a Nicaraguan residency for this process; the document must be approved and certified by the Nicaraguan public notary. The company has to be formed with at least two shareholders, but, as mentioned above, you can become the only shareholder for any reason or circumstance.
After you obtain this draft of the act of incorporation, you’ll need to take it to the VUI office (Ventanilla Unica de Inversiones), where the final procedure will take place. You will also need to pay 1% of the company’s capital (up to USD 1,200). Also, the minimum company start capital is USD 400. Note that a foreigner can fully own the Sociedad Anónima.
Once a year, you’ll need to give a financial report and accounting books to be checked by the statutory controllers (vigilantes). For this, you’ll also need to have them registered at the VUI office together with the act of incorporation.
Property registration in Nicaragua
In Nicaragua, the basic rule is that non-resident individuals have the same property rights as citizens of Nicaragua. This is important because your company needs to be registered at the Nicaraguan address. You can buy or rent real estate for business purposes in Nicaragua, in which case you need to have a certified document for registering your company to someone else’s address.