Nicaragua published Law No. 1210 (General Law on Tourism) and Law No. 1211 (Law on Incentives for Tourism Developments), in the Official Gazette on 2 August, 2024.

Law No. 1210 introduces new regulations for the tourism sector that will replace existing laws, and Law No. 1211 establishes new incentives to encourage investments in tourism development projects.

Law No. 1210 and Law No. 1211 took effect on the date they were published in the Official Gazette.

Eligible tourism development projects

Tourism development projects involve new investments in various sectors, including hotels, accommodation facilities, dining establishments, craft centres, recreational centres, amusement parks, and zoos. The incentives are also available for facilities that enhance the cultural experiences such as theatres, museums, and art galleries.

Tax incentives

The incentives available for individuals or organisations undertaking tourism development projects include:

  1. Exemption from Income Tax on economic activities for 10 years, starting from the commencement of commercial operations;
  2. Exemption from Value Added Tax (VAT) on local purchases of related goods and services, including professional services, as well as exemption from Value Added Tax (VAT), Import Duty (DAI), and Selective Consumption Tax (ISC) on the importation of construction materials, furniture and equipment, fixed building accessories, and other equipment during the investment stage, from the beginning to the completion of new infrastructure works, which applies to both local purchases and imports;
  3. Exemption from Property Tax (IBI) for up to 10 years.

How to qualify

  1. To qualify for tourism incentives, the minimum investment per tourism development project, including the value of all movable and immovable assets, both tangible and intangible, must be at least USD 300,000 or equivalent in national currency;
  2. For small and medium-sized enterprises (SMEs) engaged in tourism activities, the minimum investment must be at least USD 50,000 or equivalent in national currency.