Tempo de leitura: 4 minutos
Carlos Taboada | With the recent publication in La Gaceta No. 203 of Law No. 1264, Law on Special Economic Zones of the Belt and Road, Nicaragua incorporates a new legal instrument aimed at strengthening its strategy to attract investment and diversify production. This regime, promoted as a platform to boost national economic development, offers domestic and foreign companies a set of tax, customs, and administrative incentives, complemented by a long-term vision focused on international cooperation and the country’s competitiveness.
I- Tax and customs scope of the SEZs
The law establishes a broad framework of exemptions for companies that set up in the Special Economic Zones (SEZs). These include exemption from income tax, VAT, municipal taxes, and property transfer taxes, as well as exemption from customs duties on the importation of machinery, equipment, and supplies necessary for operations. These benefits are complemented by additional facilities: simplified procedures, a one-stop shop for services, availability of preferential infrastructure, training programs, and access to special energy rates.
The Special Commission created by the law—made up of representatives from ministries and strategic entities such as MIFIC, MHCP, BCN, MTI, the Attorney General’s Office, and the National Free Trade Zone Commission—will coordinate the implementation of the regime, to ensure legal certainty and operational efficiency.
II- Interaction with the Free Trade Zone regime (Law No. 917)
This new framework naturally raises the question of its relationship with Law No. 917, the Free Trade Zone Law, which for years has been the main instrument for attracting export-oriented investment. This law—which is in force and consolidated—defines free trade zones as areas under special customs control, considered outside the national territory for tax purposes during their exemption periods.
Both operating companies and users enjoy significant benefits: total exemption from income tax for the first ten or fifteen years, exemption from indirect and municipal taxes, and free importation of machinery, raw materials, and spare parts. However, the free trade zone regime is limited to predominantly export-oriented activities and is subject to strict regulation in terms of location, corporate purpose, and customs control.
III- What do SEZs offer that is different?
SEZs expand the logic of promotion. Although they retain the objective of encouraging productive investment, they are not limited exclusively to the export sector. Their design allows for the incorporation of industrial, agro-industrial, logistical, technological, and value-added service activities, with a more flexible approach and more robust inter-institutional governance. They also introduce administrative mechanisms aimed at facilitating, streamlining, and coordinating public policies related to foreign direct investment.
IV- Criteria for choosing between SEZs and Free Trade Zones
In practice, both regimes will coexist. The choice will depend on the nature of the project, its location, its productive orientation, and the type of benefit sought. Investors and business groups must carry out a comparative assessment considering, among other things, the following factors:
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- Economic activity and target market (export vs. domestic or mixed market).
- Applicable tax incentives and exemption periods.
- Customs and logistical impact (control, costs, and times).
- Corporate structure and local economic substance.
- Transfer pricing and compatibility with other special regimes.
- Infrastructure requirements and energy availability.
V- Implementation and pending regulations
The creation of SEZs reflects the government’s intention to modernize its investment attraction policy through a comprehensive approach, coordinated with the international strategy of the Belt and Road. The pending regulations will be decisive in determining the scope of the regime: geographical delimitation of the zones, exemption periods, access criteria, and supervision mechanisms. In the meantime, interested companies can already begin their eligibility analysis and a comparison of scenarios between SEZs and Free Trade Zones, with special attention to fiscal, customs, and regulatory issues.
VI- Conclusion
The Special Economic Zones regime represents an opportunity to reposition Nicaragua as an investment destination in the region. While its impact will depend on the quality of the regulations and the institutional capacity to ensure a predictable environment, the coexistence of Free Trade Zones and SEZs opens up a wider range of possibilities for structuring productive, logistical, or service projects with a focus on competitiveness and sustainability. From a fiscal and corporate perspective, this is an opportune moment to review structures, plan investments, and design an access strategy that maximizes the advantages of the new framework.
Fonte: Consurtium Legal | Foto: Reprodução
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