Nicaragua's New Retirement Law
Hello NL Readers,
The 12th of August 2009 the Nicaraguan government pass the Law 694 named: “LEY DE PROMOCION DE INGRESO DE RESIDENTES PENSIONADOS Y RESIDENTES RENTISTAS” which was approved by the National Assembly (Nicaraguan Congress), on June 18th 2009.
This comment is to explain the most important parts, the gist of the law, and not to describe the structure or explain one by one the 27 articles of the Law.
The objective of this Law is the promotion of the Special Tourism, and gives many people the opportunity to come to Nicaragua to live for a long period of time as a Resident (five years), is oriented or aimed for people who can legally prove a minimum income, it gives a special fiscal treatment with tax exemptions.
To take advantage of this law and get its benefits, people who are going to apply must prove a monthly income of Six hundred US dollars ($600.00) for Retiree (on pension) and Seven hundred fifty US dollars ($ 750.00) for people with privates incomes – Rentier - i.e. benefits or incomes from Investments, Certificate of Deposits for five years, Bonus, Revenues, Stocks, Rents, Retirement Plans, etc. Dependents could be parents of the applicant, spouse (husband or wife), children under 21 years old; or any other relative in the four grades who are dependents of the applicant. The applicant must have an income of One hundred fifty US dollars ($150.00) for each dependent.
Nicaraguans who have been living more than ten years abroad and have an income coming from abroad, according to the Law, also can get the benefits of this Law.
The Benefits are:
a) Right to Residency for five years. b) Exemption from payment of the one way ticket out of the country for the applicant/resident. A tax exemption for a vehicle C.I.F. (Cost, Insurance and Freight), up to twenty five thousand dollars ($25,000.00); if the price of the vehicle is over twenty five thousand dollars ($ 25,000.00) the Resident will pay taxes on the difference. This vehicle can be changed with tax exemption every four years. Vehicles can be imported from the country where the applicant comes from or buy it in Nicaragua in both cases there will be a tax exemption. c) A tax exemption of twenty thousand dollars ($ 20,000.00) for household goods. There is a comprehensive list of articles that can be considered household goods. i.e.: “household goods are the new or used goods that help or allow living comfortably in a house”. d) A tax exemption of fifty thousand dollars ($ 50,000.00) of the VAT (value added tax) on construction materials to build a house to live in. e) Tax exemption of the VAT on rental cars of the Resident, for his personal use in Nicaragua.
Requirements: People who want to apply and get these benefits must submit these documents:
Application form. Income certification or pension letter Birth Certificate Two pictures passport size Health Certificate Photocopy of the passport Marriage License (where it´s relevant) Police Record Certificate List of the household goods and vehicle’s documentation Naturalization Certificate for people who have a different nationality than where they were born.
The whole documentation must be Apostilled (given Consular Legalization) and authenticated by the authorities of the country where the documents will be issued and – Imperative - by the Nicaraguan Consulate.
Live in Nicaragua at least six months per year; it could be continuous or discontinuous. However, with INTUR’s authorization there could be exemptions, e.g. heath reasons or having investments in real estate over Seventy five thousand dollars ($ 75,000.00) in Nicaragua. Submit every year to INTUR, documentation to prove that his/her income (in the amounts specified above) comes into Nicaragua. The renewal every five years of the Residency according to the Residency Law of the Immigration Department.
The Resident can’t work in Nicaragua with government money; but could do private investments in a business and make investments in Real Estates over Seventy five thousand dollars ($ 75,000.00) in Nicaragua in accordance with the Ministry of Economy and Development’s approval. People such as scientists or professors in Universities or Research Institutes will be able to work in Nicaragua. People who build a house for personal or private use, with tax exemptions in construction materials, can’t transfer/sell the house for ten years or they must pay the taxes on those materials.
The age to apply:
The legal age to apply for both Retiree and Private Income - Rentier - applicants is forty five years old, however the same Law in article # 23 exempts people who are previously retired for disability (medical reasons).- This is a modern Law which offers several advantages, and I am pretty sure it will be a wonderful tool for “ex pats” and NL readers who want to live in Nicaragua.
Paul Tiffer R. Attorney at law email@example.com