Employer of Record Nicaragua
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Agility EOR delivers services for business’s looking for an Employer of Record in Nicaragua. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
Employer of Record in Nicaragua
A Brief Guide to Nicaragua
Nicaragua, a land blessed with lakes, volcanoes, and the grand Pacific and Caribbean coastlines, is also rich in historical and cultural significance. It’s a Central American nation that has been cultivating a business-friendly environment and providing opportunities for overseas enterprises.
130,375 sq km
Approx. 6.5 million
Nicaraguan Córdoba (NIO)
Managua, León, Granada, Masaya
Agriculture, Textiles and Clothing, Food Processing, Chemicals, Petroleum refining and distribution, Beverages, Telecommunications, and Tourism
Business Culture in Nicaragua
Nicaragua, with its diverse culture and warm people, is a place where interpersonal relationships and respect hold significant weight in business environments. Punctuality is appreciated, but don’t be surprised if meetings start a little late, it’s part of the culture’s laid-back style. Business is conducted both in formal and informal settings, often initiated with small talk about family or personal interests. Spanish is the preferred language, although English is often understood in business circles.
Hierarchy is observed in Nicaraguan business culture, with decisions typically made at the top. Face-to-face meetings are favored over electronic communication, signifying the importance of personal connection in fostering business relationships. It’s not uncommon for business lunches or dinners to be part of the negotiation process, embodying the culture’s warm hospitality.
Payroll and Taxes
Payroll and Taxes in Nicaragua
In Nicaragua it is mandatory to pay a 13th month salary. This is paid in December and is equivalent to a months salary.
In Nicaragua, income tax rates are progressive, with higher income levels subject to higher tax rates.
Gross Annual Income (NIO)
Tax Rate (%)
Up to 100,000
100,001 – 200,000
200,001 – 350,000
350,001 – 500,000
Employers in Nicaragua are also responsible for various employer costs, which may include:
12.5% (employers with 50 or fewer employees)
13.5% (employers with more than 50 employees)
Pension and Healthcare
Nicaragua’s social security system, administered by the Nicaraguan Social Security Institute (INSS), is in charge of pension provisions. This system is funded by contributions from both employees and employers, with the state also contributing in some cases. The mandatory scheme provides retirement, disability, and survivor benefits. To qualify for the standard old-age pension, you must have reached 60 years of age and made at least 750 weeks of contributions.
Healthcare in Nicaragua
Nicaragua’s healthcare system is a mix of public and private services. The public healthcare system, overseen by the Ministry of Health (MINSA), provides free medical care at the point of service, funded by taxation and contributions to the Nicaraguan Social Security Institute (INSS). Services include primary care, hospital care, and public health programs.
Private healthcare also exists and is often utilized by those who can afford it, providing a higher level of care with shorter wait times. Private facilities and clinics are typically concentrated in larger cities like Managua. The quality of care in private hospitals is generally high, with well-trained doctors and state-of-the-art equipment.
Accessibility of healthcare varies. While efforts have been made to extend services to rural areas, the majority of healthcare facilities are located in urban areas. Quality also varies, with public healthcare often under-resourced compared to private counterparts. Overall, the country is making strides to improve its healthcare system and access to services.
Employment Law in Nicaragua
Relevant Legislation: The Nicaraguan Labor Code, enacted in 1996, governs all matters relating to employment. The Ministry of Labor is the main body overseeing labor issues in the country, ensuring compliance with the Labor Code.
Employment Contracts: While verbal contracts are valid in Nicaragua, written contracts are recommended for clarity and legal safety. These can be for a fixed-term, specific project, or indefinite period and must include information like job description, salary, and working hours.
Working Hours: The standard workweek in Nicaragua is 48 hours, typically spread across six days. Each workday should not exceed 8 hours.
Leave: Nicaraguan employees are entitled to one month’s paid vacation leave after a year of continuous service. Additionally, they’re granted 12 days of sick leave per year.
Overtime: Work exceeding the standard 48-hour week is considered overtime and is paid at a 100% premium on the regular wage rate. There’s a legal limit of three hours of overtime per day.
Termination: Employment contracts can be terminated for various reasons, such as completion of a project or contract, misconduct, or mutual agreement. The employer must provide a written notice specifying the reason for termination.
Notice: The notice period depends on the employee’s length of service. For those employed for less than six months, a notice of one week is required. For six months to a year, it’s two weeks, and for those employed for more than a year, it’s one month.
Severance Pay: Employees terminated without cause are entitled to severance pay based on their length of service. For each year of service, employees are awarded the equivalent of one month’s salary, up to five years.
Work Permits in Nicaragua
In Nicaragua, the immigration system is governed and administered by the General Directorate of Migration and Immigration, which falls under the jurisdiction of the Ministry of the Interior. The process of immigration can be a complex and layered affair, depending largely on the purpose and duration of your intended stay in the country.
For those planning on working or residing long-term in Nicaragua, several types of residency permits are available. These include the following categories:
- Investor Residency: This permit is for individuals who plan on starting a business in Nicaragua. They must demonstrate a minimum investment in a local business or property. The specifics regarding the amount and type of investment can vary, so it’s recommended to consult with an immigration attorney or expert.
- Work Permit: Work permits are generally applied for by the company or entity that wishes to employ the foreign worker. It’s important to note that these permits are typically granted for sectors where there is a lack of local skilled labor. The employer is also usually required to demonstrate that they have made reasonable efforts to fill the position with a local employee.
- Retirement or Pensioner Residency: This category is for individuals who have a steady monthly income from retirement or a pension. They must demonstrate that they receive a monthly amount of at least $600 USD for themselves, plus an additional $100 USD for each dependent.
Nicaragua Public Holidays
New Year’s Day
Sandinista Revolution Day
Battle of San Jacinto
Indigenous Resistance Day
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Nicaragua Employer of Record Benefits
When you choose Agility EOR to expand in Nicaragua, we guarantee an Employer of Record Service tailored to the needs of your business