Tax Incentives

Export Processing Zone Tenants  shall be entitled to the following tax benefits:

  • Each Export Processing Zone Tenant shall be tax-exempt during the first ten years of operation and thereafter shall pay 60%. This exemption shall not include income tax on salaries, wages or fees paid by EPZ.
  • Tenant, to domestic or foreign workers. EPZ Tenants shall not be required to withhold taxes on payments to non-resident aliens in Nicaragua or abroad on account of loan interest, commissions, fees and remittances for legal, promotional, marketing, advisory and like services.
  • All real property within an EPZ shall be exempt from any property or land tax, including capital gains tax, if any, provided that the Company is closing operations in the EPZ and the real property is still subject to the Export Processing Zone regime.
  • Tax exemption on corporate formation, transformation, merger and amendments, including documentary tax stamps.
  • Full exemption of import duties and excise taxes on raw materials, supplies, equipment, machinery, matrices, spare parts, samples, dies and accessories earmarked for Company operations within an EPZ, as well as all applicable taxes on equipment required to install and operate mess halls, health posts, medical services, childcare centers, recreational facilities and any other goods intended to satisfy the needs of EPZ staff.
  • Import duty and tax exemption on transportation equipment, including freight, passenger and service vehicles earmarked for normal use in EPZ. In the event said vehicles are sold to buyers outside the EPZ, customs duties shall be assessed, including all applicable customs rebates for usage, such as those applied for sales by diplomatic missions or international organizations.
  • Full exemption of indirect, sales and excise taxes.  
  • Municipal tax exemption.
  • Export tax exemption on products manufactured within EPZs.

In order to qualify for the tax benefits stipulated, or any other benefit granted herein, EPZ Tenants shall hire a reasonable number of workers and shall pay salaries and fringe benefits as stipulated in their application. In any case, EPZ Tenants shall be subject to the laws of the Republic of Nicaragua.