The impact of the coronavirus crisis on the financial sector in Central America is expected to be felt mainly in services related to stock brokerage and investment advice, where a drop is expected.
The "Information System for the Impact Analysis of Covid-19 on Business", prepared by the Trade Intelligence Unit of CentralAmericaData, measures the degree of impact that the crisis will have on companies according to their sector or economic activity, during the coming months.
Local authorities decided to raise by 10% the minimum capital required for the opening of a bank or the operation of existing ones.
The Superintendence of Banks and Other Financial Institutions (Siboif) announced that the minimum capital required for banks that already operate or wish to enter was raised by $1.03 million, from $10.67 million to $11.70 million.
In Nicaragua, the license of CrediFactor S.A. to offer securities to the public was revoked due to the difficulties the company is facing in paying for the securities.
The executive president of CrediFactor, Mauricio Pierson Stadthagen explained to Elnuevodiario.com.ni that "... The country's situation decelerated the rate of recovery of the portfolio they had been recording, which was funded with the issuance of bonds in which individuals invested. The factoring company did not take deposits from the public."
From January 2013 financial institutions outside the U.S. will have to report on the accounts of citizens from that country, for tax purposes.
An analysis of the issue in an article in Capital.com focuses on Panama and risk management, but can be extrapolated to the entire Central American region.
“January 1 2013 will see the start of registration of agreements for compliance with FATCA for all entities in the financial sector, including insurance companies, brokerage houses, banks, credit unions and mutual funds that have U.S. customers, who must act accordingly. '
Legally registered companies must also report to the tax authorities of the U.S.
This new measure will be taken to comply with the Foreign Account Tax Compliance Law (FATCA, for short), which requires information disclosure by companies where a U.S. citizen is involved.
In addition, banks who hold deposits belonging to North American clients must also report to the Internal Revenue Service (IRS), and entities that do not will be subject to a retention of 30% on the interest and dividends generated.
Financial companies must provide reports about their clients who are United States citizens under penalty of withholding 30% of the transfers that they make from that country.
The measure, which will apply from July 2013, is a consequence of the Law on Foreign Account Tax Compliance (FATCA), which requires foreign banks to sign an agreement with the Internal Revenue Service (IRS), and report this to their customers, U.S.
The supply of investment alternatives will be broadened with the authorization granted to Invercasa.
Nicaraguan investors will now have more options for their investment portfolios, now that the Invercasa stock exchange has received authorization from the Superintendency to sell Costa Rican sovereign debt bonds.
With this option, Nicaraguan investors will be able to diversify their investment portfolio risks and access international options directly from their country.
For the first time in the history of the country the stock exchange trade with the international exchanges.
Inversiones de Nicaragua S.A. expects that in two months time the Superintendence of Banks will approved their status to operate as international broker.
This will mean that local businesses or people will be able to carry out international operations with the world's most important exchanges via the local stock exchange.