Nicaragua - Country Commercial Guide
Selling Factors and Techniques
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Trade Promotion and Advertising

Much of the population receives information via radio.  Many businesses use billboards, banners, printed flyers, and loudspeaker announcements. Advertising for higher-income segments of the population can be found in newspapers, television, cinema, and cell phone text messaging.  Publicity through the internet continues to grow, especially through Facebook.  Many businesses use the Facebook platform as their sole web presence.  Some businesses have found success using targeted Facebook ads.  Businesses increasingly use WhatsApp to advertise to existing customers. 


Businesses should be aware of three main sources of taxes that affect sales and business operations: income tax, value-added tax, and selective consumption tax.  The Nicaraguan fiscal year runs from January 1 to December 31.  Businesses should also be aware that in the current political environment, the government appears focused on funding its cash-strapped operations rather than implementing economic policies that foment sustainable growth.  With no warning, the government has passed tax reforms and other policies within the past three years that adversely affect businesses. 

Amendments to the Harmonized Tax Law in 2019 raised the 1-percent minimum tax on gross sales to 2 percent for medium-sized businesses (annual income between $1.9 and $5 million) and 3 percent for most large businesses (annual income greater than $5 million). The government asserted it would monitor the tax reform and consider comments from businesses before offering revisions within 60 days.  To date it still has not announced revisions.

The government has failed to apply several legally established tax exonerations. The tax exoneration policy has existed since the 1950s and permits local purchases and importation of raw materials, intermediate goods, capital goods, spare parts, and parts and accessories for machinery and equipment.  If the exonerations were effectively applied, industry executives believe the policy would be a competitive advantage for the country and promote the export and consumption of locally produced goods.   

A value added tax (IVA) of 15 percent applies to the sale of both domestic and imported goods and services. However, the new tax reform also extended IVA to previously exempt products like agriculture products (fertilizers, tractors, etc.), meats, natural beverages, dairy products, coffee, rice, some national vegetables, imported onions and potatoes, refined sugar, and oil (except for soy and palm oil). 

The reforms also hiked the selective consumption tax (ISC) from 9 percent to 15 percent for many goods. The tax can be as high as 60 percent for tobacco products and alcoholic beverages.  The ISC is purportedly based on the product’s sale price and is therefore typically levied at the point of sale.  However, the Customs Authority began levying the tax on imported goods at the border.  Because it does not have the information or capacity to calculate the predicted sales price for goods on which to base the ISC, customs authorities simply levy the tax based on a purported sale price of triple the cost of goods, insurance, and freight (CIF) value.  Businesses report this value greatly exceeds the actual sales prices.

Commodity transactions on the Nicaraguan exchange market are subject to a 1.5 percent tax. 

Based on the Consumers’ Rights Protection Law, the Nicaraguan Ministry of Development, Industry, and Trade regulates maximum prices for retail and wholesale generic and branded pharmaceutical products. 

The Nicaraguan Energy Institute regulates liquefied natural gas prices.  Prices for public utilities such as water and electricity are also regulated.  See the Investment Climate Statement for more information.

Sales Service/Customer Support

Many local businesses place less emphasis on customer service than is considered standard in the United States.  Nicaraguan consumers are beginning to demand better service and are receptive to foreign-owned businesses that make customer service a priority.

Local Professional Services

The Embassy strongly recommends hiring a local attorney to seek counsel and to facilitate business transactions.  Many attorneys have cooperative agreements with law firms throughout Central America and the United States.

Several local accounting firms have established cooperative agreements with U.S. accounting firms.  A limited number of contact centers and business process vendors employ bilingual professionals who offer a variety of services to international firms, including telemarketing, consumer and commercial collections, back-office work, data entry, market intelligence, and financial analysis.

Principal Business Associations

The Ministry of Interior on March 6 closed COSEP, Nicaragua’s preeminent business chamber, and 18 other business chambers for purportedly “failing to complete the registration process” and alleging they had presented undefined “inconsistencies in the information provided.”  Although the closures sent shockwaves through Nicaragua’s private sector, the dissolution of these chambers had long been expected.  In its expanding efforts to close Nicaragua’s independent civil spaces, the Ortega-Murillo government in August 2022 transferred regulatory authority of business chambers from the Ministry of Commerce to the Ministry of Interior.  That change obligated chambers to re-register with Interior according to implicit – but never published – requirements.  The Ministry of Interior reportedly refused to provide written instructions and conveyed information only verbally.  Binational chambers, including the American Chamber of Commerce in Nicaragua (AmCham), remain open but have severely limited their activities.

Limitations on Selling U.S. Products and Services

There are no manufacturing sectors or services where only Nicaraguan citizens are allowed to own or sell, except in some very limited cases related to national security. Please see the Investment Climate Statement or contact the Embassy’s Political-Economic Section for more information.