Nicaragua: Reform to Law on Free Zones

The project aims to create a free trade zone which will offer offshore financial services and related economic activities.

Friday, May 15, 2015

The Nicaraguan government's proposal to create a free trade zone to provide tax incentives to attract financial sector companies and to exported services from there has raised doubts in some quarters, with accusations being made that the bill evokes the concept of a tax haven. However, ProNicaragua defends the bill, asserting that the goal is to attract investment of greater value, both in finance and other industries.

Javier Chamorro, executive director of ProNicaragua, told Confidencial.com.ni that "... 'We already have call centers that export professional services. There are some that are basic ... but others provide higher value professional services ... In financial free zones the concept is the same, because they will provide financial services to people abroad. Having a company that provides financial services and professional services abroad, is the same concept which we are using for any other exporter of professional services. Instead of having our civil engineers designing for companies in the US. They it will be our masters, financial experts, accountants, nd business managers, who will provide financial advisory services'. "

He added that "... 'A tax haven is by definition a place where you do not pay taxes (or pay less), not necessarily where crimes are committed. Call centers could be called tax havens, because they do not pay taxes. Do they become places that are at risk of money laundering, just because they do not pay taxes? No '. "



More on this topic

A Financial Free Zone for Nicaragua

May 2015

The private sector is questioning the proposal to amend the legislation to create an international financial trade zone to provide financial services "extraterritorially".

With this long-term project the aim is to modernize legislation "... to make it the same as it is in other countries in order to attract FDI in higher value-added processes," informed authorities at the Agency for Promotion of Investments and Exports of Nicaragua. However, several sectors in the country are opposed to it, arguing that it would create unfair competition for banks and would only create a "tax haven".

Finland Offers Business Matchmaking

September 2012

The initiative Finnpartnership's Matchmaking Service will be presented in Nicaragua, a development which facilitates links between companies from developing countries and the Nordic country.

With the help of intermediary services from Finnpartnership, companies and organizations in Finland and developing countries can seek business partners and business opportunities and cooperation.

Tax Reform Will Not Affect Free Zone Incentives

July 2012

Representatives of the Government of Nicaragua have made assurances that the tax reform will not affect the incentives announced in the FTZs.

The presidential delegate for the Promotion of Investment and Trade Facilitation, Alvaro Baltodano said, "What's in free zones, stays as it is, it will not change."

Free Zone Aiming for Footwear and Auto Industry

January 2012

ProNicaragua seeks to attract companies from the footwear and auto parts industry to operate in the country's free zones.

Javier Chamorro, Executive Director of the investment promotion agency, ProNicaragua, noted that they are seeking to "generate development poles" in these two sectors.

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