Law 306 and Offshore investment in Nicaragua
Feb 24th, 2008 by Kevin
Law 306 has been around for some time (1999), however for those who may be new to investing in this country, Nicaragua’s Law 306 is one of the most attractive, and extensive, tourism-incentive laws in central America. This law is very broad and offers hard-to-beat benefits for investors who take advantage of this program. If your business qualifies, you pay no income taxes for up to 10 years, pay no real estate taxes for up to 10 years, and bring in (or buy locally) all the supplies you need, tax-free. If you’ve ever thought about starting a business, opening a bar, a B&B or guided tours …Nicaragua is the place to do it.
History
During the administration of Arnoldo Aleman, incentive programs such as the Law 306 Tourism Investment program were implemented to further encourage investors. In 2001, the third democratic free election was held and Enrique Bolaños, a former free enterpriser, was elected. Mr. Bolaños immediately went to work to enhance the incentive programs and in a short period of time attracted millions of dollars in investments. As recently as 2004, enhancements were made to the Law, and even now with Daniel Ortega in office, this law continue provide great incentives for foreign tourism related investment.
What does it cover? - Well almost anything you could think of… (there are some minimum restrictions on investment $ amount)
- hotels
- tour operators for Historical Preservation Sites, or other protected areas
- domestic air-transportation companies
- water transportation
- tour operators and travel agencies
- new companies that provide food, beverage or recreational services
- nightclubs, restaurants, discos and casinos
- companies in national territory engaged in producing feature-length films of an international character
- companies dedicated to renting land or water vehicles to tourists
- Investments in Tourism Infrastructure and connected Tourism Equipment
- individuals or corporations dedicated to activities to develop national handicrafts, artistry or dance
What does it get you?
- 80-100% exemption on income tax (depending on project and location) after the start of operation
- total exemption on property taxes for a period of 10 years
- exoneration from import duties on vehicles (in some cases); and exemption from sales tax on the purchase of equipment and construction materials
The great thing about this law is that it only limited by ones creativity. For example, even if you are just looking to build a second home, and spend part of your time in Nicaragua, there are ways in which you can benefit from this law. Contact Coastal Dreams Worldwide for more information, and to learn about opportunities we can offer, that will allow you to take advantage of Law 306.
