Investing with Confidence A Strategic Guide for Foreign Capital in Nicaragua

By: Luis M. Canales

Law No. 1240, the “Foreign Investment Promotion Law,” together with its Regulations, establishes the mandatory registration of all foreign investors with the National Foreign Investment Commission (CNIE) of the Ministry of Development, Industry, and Trade (MIFIC) of the Republic of Nicaragua.

This registration is an essential requirement for any natural or legal person engaging in investments in Nicaragua through the incorporation, acquisition, or participation in commercial companies or enterprises—regardless of their nationality or place of residence.

Failure to comply with this obligation may result in severe administrative penalties, including the closure of operations, and will be enforced by other authorities such as the General Directorate of Revenue (DGI), Municipal Governments, the Nicaraguan Social Security Institute (INSS), and other institutions.

According to Article 6 of Law 1240, all foreign investment in Nicaragua must be registered with MIFIC through its Directorate of Investments. Article 19 sets a deadline of 120 calendar days, starting May 26, 2025, for already established investments to complete the registration, with the final date being September 23, 2025.

It is important to note that there are two distinct scenarios depending on the stage of the investment:

1. New Investments

Projects involving foreign capital that are still in the analysis or planning stage and have not yet been formalized.

Required Documents:

1. Application form provided by MIFIC.
2. Investment Plan or Project, following the official MIFIC format, accompanied by the detailed “Investment Plan Content” document, prepared clearly and accurately.
3. Draft articles of incorporation (if applicable).
4. Notarized certified copy of the identification documents of the investor(s) (passport or residence card).

2. Established Companies

Foreign investments already operating in Nicaragua, divided into two categories:

• With Project: Companies currently operating in Nicaragua that plan new investments within the next five years. They must complete the required forms and include the “Investment Plan Content” document.
• Without Project: Companies maintaining their investment without immediate plans for expansion.

Required Documents:

1. Application form provided by MIFIC.
2. Company profile.
3. Five-year investment projection and “Investment Plan Content” (if applicable).
4. Public deed of incorporation and bylaws, registered in the Public Registry.
5. Registered power of attorney for legal representation.
6. Certificate of registration as a merchant.
7. Valid Beneficial Owner Certificate.
8. Tax Identification Number (RUC) and tax compliance certificate from DGI.
9. Municipal registration and compliance certificate.
10. Social Security compliance certificate (INSS) and proof of affiliation.
11. Notarized certified copy of the valid identification documents for each shareholder.

Practical Recommendations for a Smooth Process

• Submit documentation both in notarized certified hard copy and in digital format (USB drive).
• Have all documents reviewed by an experienced attorney to ensure compliance with legal and registry requirements.
• Engage a corporate lawyer specializing in foreign investment to avoid errors that could delay the process.
• Work with an accountant to ensure the investment plan is prepared accurately.

Registration with the CNIE of MIFIC is not just a legal requirement—it is also a valuable tool to formalize and protect your foreign investment in Nicaragua. Compliance ensures transparency, strengthens relations with authorities, and opens the door to institutional benefits and support.

At CALA Attorneys & Counselors at Law, our specialized foreign investment advisory team is ready to guide you through the entire process, ensuring confidentiality, efficiency, and strict compliance with Law 1240.