Nicaragua

Employer of Record (EOR) in Nicaragua

Only 399 EUR per employee per month

Rivermate's Employer of Record (EOR) solution helps companies hire remote employees in Nicaragua . We take care of global payroll, taxes, benefits, compliance and HR activities. So you can focus on growing your business. Our Employer of Record (EOR) solution is beneficial to companies that want to hire remote employees in a breeze. On this page you will find employment information for Nicaragua.

Employer of Record people
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Currency
Nicaraguan CÓrdoba
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Capital
Managua
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Region
Americas
Megaphone
Language
Spanish
Hire remote employees
Population
6624554
A pile of gold
GDP
$13.81 billion
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GDP growth
0.0486
Business suitcase
Ease of doing business
54.4
Planet earth
World GDP share
0.0002

1. Grow your team in Nicaragua with Rivermate as your Employer of Record (EOR) / PEO

Payroll, benefits, taxes, and compliance can be difficult to manage in Nicaragua , particularly if you don't have established local relationships. You can hire employees in Nicaragua effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global Employer of Record (EOR) solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

2. Summary

Nicaragua, formally the Republic of Nicaragua (Spanish: República de Nicaragua, is the biggest nation in the Central American isthmus, bordered to the northwest by Honduras, to the east by the Caribbean, to the south by Costa Rica, and to the southwest by the Pacific Ocean. Managua is the capital and biggest city of Nicaragua, as well as the third-largest metropolis in Central America, behind Tegucigalpa and Guatemala City. Six million individuals of mestizo, indigenous, European, and African ancestry make up the multi-ethnic population. Spanish is the primary language. The Mosquito Coast's indigenous tribes speak their own languages as well as English.

The territory, which had been inhabited by many indigenous civilizations from ancient times, was captured by the Spanish Empire in the 16th century. In 1821, Nicaragua declared independence from Spain. The Mosquito Coast had a distinct historical trajectory, having been colonized by the English in the 17th century and then come under British authority. It became a Nicaraguan independent territory in 1860, and its northernmost section was given to Honduras in 1960. Nicaragua has had periods of political upheaval, authoritarianism, occupation, and budgetary catastrophe since its independence, notably the Nicaraguan Revolution of the 1960s and 1970s and the Contra War of the 1980s.

The blending of cultural traditions has resulted in significant variations in folklore, food, music, and literature, notably literature, thanks to the literary achievements of Nicaraguan poets and authors such as Rubén Daro. Nicaragua, popularly known as the "Land of Lakes and Volcanoes," is home to the Bosawás Biosphere Reserve, the Americas' second-largest rainforest. Nicaragua is becoming an increasingly attractive tourist destination due to its ecological richness, mild tropical climate, and active volcanoes. Nicaragua is a founding member of the United Nations, the Non-Aligned Movement, the Organization of American States, ALBA, and the Latin American and Caribbean States Community.

Hiring talented employees in a short span is not an easy task. Partnering with an Employer of Record (EOR) like Rivermate in Nicaragua is your best option, giving your organization enough time to focus on other aspects of international expansions like project management and inventory management. The EOR takes care of all the compliance and legal issues while helping you speed up hiring using their knowledge of domestic employment practices and virtual onboarding tools. Top EORs also have provisions for the e-signing of documents to enable faster onboarding.

3. Public holidays

4. Types of leave

There is no information about the types of leave for this country.

Paid time off

Employees who have worked for at least six months to a year are eligible to 15 days of paid vacation. The employee is entitled to 30 days of paid leave after one year of service.

Public holidays

Nicaragua recognizes nine public holidays.

Sick days

Sick leave is paid starting on the third day of illness and is covered by social security for up to six months. Sick pay is equal to 60 percent of regular pay.


The three-day waiting period is waived if the employee is hospitalized.

Maternity leave

Maternity leave lasts 12 weeks and is compensated at 100% of regular pay, with the employer covering 60% and social security covering 40%. Maternity leave can start four weeks before the due date.


Maternity leave is extended to 14 weeks for multiple newborns.

Paternity leave

Fathers are entitled to 5 days of paid leave each year.

Parental leave

In Nicaragua, there is no such thing as a parental leave law.

Other leave

5. Employment termination

There is no information about employment information for this country.

Termination process

Employers must submit a termination request to the labor inspection department. The employee is entitled to any remaining vacation money and their annual bonus at the time of termination. Termination notice is also required.

Notice period

Employees must provide 15 days notice.

Probation period

There is a 30-day probationary period during which time either party may terminate the employment agreement for any reason.

Severance pay

When an employee is terminated for cause, the employer is required to pay severance. Severance pay is calculated at one month's salary for the first three years of employment and at twenty additional days of pay for each subsequent year. Severance pay is limited to five months.

6. Working hours

There is no information about the working hours for this country.

General working schedule

The standard workweek is 48 hours and eight hours per day for work performed between 6 a.m. and 8 p.m. Nighttime work, defined as work performed between the hours of 8 p.m. and 6 a.m., cannot exceed 42 hours per week or seven hours per day. Working a combination of day and night shifts is limited to 45 hours per week and seven and a half hours per day. Nighttime work is defined as a mixed workday that includes more than three and a half hours of nighttime work. The Ministry of Labor prohibits work that is classified as dangerous or unhealthy from exceeding six hours per day.

After six days of continuous service, employees are entitled to one day of rest. Generally, this occurs on Sunday, but there are exceptions. Additionally, employees are entitled to a half-hour break during the workday, which is considered effective work time.

Overtime

Overtime work is permitted for a maximum of nine hours per week and three hours per day and is compensated at 100% of the standard rate. Employees who work on a rest day or on a public holiday are also compensated at 100% above the standard rate.


Female employees who are six months or more pregnant are not permitted to work at night.

7. Minimum wage

There is no information about the minimum wage for this country.

Nicaragua has no national minimum wage. Instead, the country's compensation rules provide a minimum salary that applies to all nine economic sectors. Workers in the agricultural industry, for example, must earn at least 4,414.91 Nicaraguan córdobas per month as of March 1st, 2021, while people in the financial sector must earn at least 9,880.17 Nicaraguan córdobas per month.

8. Employee benefits

There is no information about the employee benefits for this country.

Nicaragua features a hybrid public-private health-care system. The government pays for the majority of regular visits. While there is no private insurance as in the United States, the main hospitals provide a program that functions similarly to insurance.

Pensions, supplemental health insurance, life and disability insurance, discounts at corporate shops, transportation allowances, and food allowances are all common employee perks.

9. Taxes

There is no information about the taxes for this country.

Corporate tax

Nicaragua has a territorial income tax system, which means that only income produced in, or that has an impact on, Nicaragua is usually taxed. CIT is levied on a corporation's earnings, which include business/trading revenue as well as passive income. Capital gains and income are subject to WHT indefinitely. General business costs are deductible when calculating taxable income.

CIT is exclusively paid on domestic-sourced income at a fixed rate equal to the greater of:

(1) 30% of net taxable income (i.e. gross taxable income less allowed deductions), or

(2) a definitive minimum tax of 1% to 3% on gross income obtained during the fiscal year.

The income tax will be the larger of the amount obtained by comparing the 30% applied to net taxable income and the definite minimum tax described above.

Individual income tax

Nicaragua taxes its citizens, as well as other residents and non-residents, on income earned in Nicaragua. Non-residents' or non-domiciled individuals' taxable income earned in Nicaragua is calculated as a percentage of gross income, depending on the type of the income.

Workers who earn up to NIO 100,000 are tax-free.

Workers who earn a taxable income between NIO 100,000 to NIO 200,000 are imposed a personal income tax rate of 15 percent.

Workers who earn a taxable income between NIO 200,000 to NIO 350,000 are imposed a personal income tax rate of 20 percent.

Workers who earn a taxable income between NIO 350,000 to NIO 500,000 are imposed a personal income tax rate of 25 percent.

Workers who earn over NIO 500,000 are imposed a 30 percent personal income tax rate.

Non-residents, whether domiciled or not, who earn income from Nicaragua are subject to a 20% definitive WHT.

VAT, GST and sales tax

When conducted inside Nicaragua, the following transactions are subject to VAT: supply of goods, suppliers of services, imports of goods, and exports of goods and services.

VAT is levied at a rate of 15% on the sale of products, the rendering of services, the grant of use of assets, and the import of commodities. Exports of goods and services are taxed at zero percent.

Certain commodities are free from VAT, including as medication, real estate transfers, the sale of secondhand goods, basic food products, credit instruments, tuition, and textbooks and educational materials.

10. VISA and work permits

There is no information about VISA and work permits for this country.

Employers of foreign nationals in Nicaragua have various alternatives under the country's immigration system. The requirements, processing times, employment eligibility, and benefits for accompanying family members differ depending on the type of permit.

Visa-exempt nationalities (also known as Category A nationals) may enter Nicaragua without a visa and remain for up to 90 days, which can be extended at the discretion of immigration officials for an additional 90 days. Nationals with a Category B visa may get a visa at a Nicaraguan consular post or upon arrival at a Nicaraguan port of entry. Category C visa holders must seek a Consulted Visa from a Nicaraguan consular station with prior authorisation from the Nicaraguan Immigration Department. These visas typically have a lengthy processing time.

Foreign nationals who plan to work or engage in remunerated activities in Nicaragua for less than a year can apply for a Work Permit. The validity of the Work Permit usually corresponds to the length of time the foreign national will be performing work activities in Nicaragua. Foreign nationals who will work or participate in remunerated activities in Nicaragua for more than one year, whether employed by a Nicaraguan corporation or independent workers who intend to execute a paid activity in Nicaragua, must get Temporary Residence. Temporary residence permits can be issued for up to a year and are renewable for the duration of the original issuance. After three years in Nicaragua, the foreign national may petition for permanent residence status for up to five years. ​

11. Employer Of Record service terms

There is no information about the Employer of Record (EoR) service terms for this country.

Employment contracts

Employment agreements may be either written or verbal. The Ministry of Labor receives two copies of signed written employment contracts for permission and certification. At a later period, one copy is delivered to the employer.

With Rivermate being your Employer of Record (EoR) in Nicaragua, you do not have to worry about the employment contracts, as we take care of that.

Minimum assignment length

Employment contracts may be for a set period of time or for an unlimited period of time. Verbal employment contracts of up to 10 days are permissible for fieldwork, domestic service, and temporary or seasonal duties. Within three days of service, employers must furnish workers with a certificate specifying the start date, kind of work to be done, and remuneration. This is both essential and sufficient to establish the employment relationship.

Payment currency

Nicaraguan CÓrdoba

13.Opening a subsidiary in Nicaragua

There is no information about the working hours for this country.

How to set up a subsidiary

Setting up a Nicaragua subsidiary requires much preparation before you begin the procedure. First, you must choose the best site inside Nicaragua that is conducive to international investment. Different areas or towns may have their own Nicaragua subsidiary legislation, which will influence how you establish your Nicaragua subsidiary. If you are unsure about the optimal location for your subsidiary, we suggest consulting with a lawyer, consultant, or accountant.

Following that, you should concentrate on selecting the appropriate entity. When establishing your Nicaragua subsidiary, you may choose from a number of subsidiary forms, such as a company or a branch. It's critical to choose one that aligns with your company objectives, since your entity specifies what activities you may do in the nation. Many businesses opt to organize as a corporation because it allows them to operate practically like a local business.

The following stages are involved in establishing your Nicaragua subsidiary as an LLC:

1. Creating incorporation acts

2. Purchasing accounting and business books from a local bookshop

3. Submitting incorporation acts to the VUI

4. Creating an account as a trader

5. Keeping accounting records

6. Obtaining and submitting a single registration paperwork at the VUI

7. Obtaining, if necessary, a foreign investor certificate

Subsidiary laws

Nicaragua's subsidiary laws prescribe all you need to know to keep your company in compliance. For the Nicaragua subsidiary formation procedure, you'll need one director, two shareholders, and an auditor. All companies in the nation are regulated by the Ministry of Development, Industry, and Trade, and all transactions must be completed in person. Before you can start working, you'll also need a tax identification number.

All businesses, whether corporations or branches, need a commercial bank account, which takes four to six weeks to set up. Remember that you'll also need at least 10,000 Nicaraguan córdobas, which is around $300. To begin the procedure, your business will need to choose a legal representative with Nicaraguan residence to write an act of incorporation.

13. Why choose Rivermate as your Employer of Record / PEO in Nicaragua

Establishing an entity in Nicaragua to hire a team takes time, money, and effort. The labor law in Nicaragua has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into Nicaragua simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record (EOR) solutions in Nicaragua give you peace of mind so you can focus on running your business. Please contact us if you'd like to learn more about how Rivermate can help you hire employees in Nicaragua via our Employer of Record (EOR) / PEO solution.

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