Nicaragua Economy Profile - Doing Business 2020
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Doing Business 2020 Nicaragua
Economy Profile
Nicaragua
Page 1
Doing Business 2020 Nicaragua
Economy Profile of Nicaragua
Doing Business 2020 Indicators
(in order of appearance in the document)
Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company
Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety
mechanisms in the construction permitting system
Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and the
transparency of tariffs
Registering property Procedures, time and cost to transfer a property and the quality of the land administration system
Getting credit Movable collateral laws and credit information systems
Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance
Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as postfiling
processes
Trading across borders Time and cost to export the product of comparative advantage and import auto parts
Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes
Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for
insolvency
Employing workers Flexibility in employment regulation and redundancy cost
Page 2Doing Business 2020 Nicaragua
About Doing Business
The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and
regional level.
The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life
cycle.
Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for
starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across
borders, enforcing contracts and resolving insolvency. Doing Business also measures features of employing workers. Although Doing Business does not present rankings
of economies on the employing workers indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does
present the data for these indicators.
By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages
economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector
researchers and others interested in the business climate of each economy.
In addition, Doing Business offers detailed subnational studies, which exhaustively cover business regulation and reform in different cities and regions within a nation.
These studies provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected
cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked.
The first Doing Business study, published in 2003, covered 5 indicator sets and 133 economies. This year’s study covers 11 indicator sets and 190 economies. Most
indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013
(Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business also collected data
for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from
feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the
regulatory environment for business around the world.
To learn more about Doing Business please visit doingbusiness.org
Page 3Doing Business 2020 Nicaragua
Ease of Doing Business in DB RANK DB SCORE
Region Latin America & Caribbean
Nicaragua
Income Category Lower middle income
Population 6,465,513 142
54.4
City Covered Managua
Rankings on Doing Business topics - Nicaragua
84 87
104 107
115
145
160 162
170
176
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Topic Scores
79.6 46.3 68.3 46.4 50.0 24.0 52.7 77.0 58.6 41.1
Starting a Business (rank) 145 Getting Credit (rank) 104 Trading across Borders (rank) 84
Score of starting a business (0-100) 79.6 Score of getting credit (0-100) 50.0 Score of trading across borders (0-100) 77.0
Procedures (number) 7 Strength of legal rights index (0-12) 2 Time to export
Time (days) 14 Depth of credit information index (0-8) 8 Documentary compliance (hours) 48
Cost (number) 65.7 Credit registry coverage (% of adults) 12.9 Border compliance (hours) 72
Paid-in min. capital (% of income per capita) 0.0 Credit bureau coverage (% of adults) 56.6 Cost to export
Documentary compliance (USD) 47
Dealing with Construction Permits (rank) 176 Protecting Minority Investors (rank) 170 Border compliance (USD) 240
Score of dealing with construction permits (0-100) 46.3 Score of protecting minority investors (0-100) 24.0 Time to export
Procedures (number) 18 Extent of disclosure index (0-10) 1.0 Documentary compliance (hours) 16
Time (days) 225 Extent of director liability index (0-10) 5.0 Border compliance (hours) 72
Cost (% of warehouse value) 5.7 Ease of shareholder suits index (0-10) 6.0 Cost to export
Building quality control index (0-15) 3.5 Extent of shareholder rights index (0-6) 0.0 Documentary compliance (USD) 86
Extent of ownership and control index (0-7) 0.0 Border compliance (USD) 400
Getting Electricity (rank) 115 Extent of corporate transparency index (0-7) 0.0
Score of getting electricity (0-100) 68.3 Enforcing Contracts (rank) 87
Procedures (number) 6 Paying Taxes (rank) 162 Score of enforcing contracts (0-100) 58.6
Time (days) 55 Score of paying taxes (0-100) 52.7 Time (days) 490
Cost (% of income per capita) 879.7 Payments (number per year) 43 Cost (% of claim value) 26.8
Reliability of supply and transparency of tariff index (0-8) 4 Time (hours per year) 201 Quality of judicial processes index (0-18) 6.5
Total tax and contribution rate (% of profit) 60.6
Registering Property (rank) 160 Postfiling index (0-100) 52.5 Resolving Insolvency (rank) 107
Score of registering property (0-100) 46.4 Score of resolving insolvency (0-100) 41.1
Procedures (number) 9 Recovery rate (cents on the dollar) 35.7
Time (days) 56 Time (years) 2.2
Cost (% of property value) 6.0 Cost (% of estate) 14.5
Quality of the land administration index (0-30) 5.5 Outcome (0 as piecemeal sale and 1 as going 0
concern)
Strength of insolvency framework index (0-16) 7.0
Page 4Doing Business 2020 Nicaragua
Starting a Business
This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and
formally operate in each economy’s largest business city.
To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to
10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of
operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one
company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their
scores for starting a business. These scores are the simple average of the scores for each of the component indicators.
The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally start and formally operate a company To make the data comparable across economies, several assumptions about the business and the
(number) procedures are used. It is assumed that any required information is readily available and that the
entrepreneur will pay no bribes.
• Preregistration (for example, name verification or reservation,
notarization)
The business:
• Registration in the economy’s largest business city -Is a limited liability company (or its legal equivalent). If there is more than one type of limited
• Postregistration (for example, social security registration, liability company in the economy, the limited liability form most common among domestic firms is
company seal) chosen. Information on the most common form is obtained from incorporation lawyers or the
statistical office.
• Obtaining approval from spouse to start a business or to leave
-Operates in the economy’s largest business city. For 11 economies the data are also collected for
the home to register the company
the second largest business city.
• Obtaining any gender specific document for company -Performs general industrial or commercial activities such as the production or sale to the public of
registration and operation or national identification card goods or services. The business does not perform foreign trade activities and does not handle
products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily
Time required to complete each procedure (calendar days)
polluting production processes.
• Does not include time spent gathering information -Does not qualify for investment incentives or any special benefits.
-Is 100% domestically owned.
• Each procedure starts on a separate day (2 procedures cannot -Has five business owners, none of whom is a legal entity. One business owner holds 30% of the
start on the same day)
company shares, two owners have 20% of shares each, and two owners have 15% of shares
• Procedures fully completed online are recorded as ½ day each.
-Is managed by one local director.
• Procedure is considered completed once final document is
received -Has between 10 and 50 employees one month after the commencement of operations, all of them
domestic nationals.
• No prior contact with officials -Has start-up capital of 10 times income per capita.
-Has an estimated turnover of at least 100 times income per capita.
Cost required to complete each procedure (% of income per
-Leases the commercial plant or offices and is not a proprietor of real estate.
capita)
-Has an annual lease for the office space equivalent to one income per capita.
• Official costs only, no bribes -Is in an office space of approximately 929 square meters (10,000 square feet).
-Has a company deed that is 10 pages long.
• No professional fees unless services required by law or
commonly used in practice
The owners:
Paid-in minimum capital (% of income per capita)
-Have reached the legal age of majority and are capable of making decisions as an adult. If there
• Funds deposited in a bank or with third party before registration is no legal age of majority, they are assumed to be 30 years old.
or up to 3 months after incorporation -Are in good health and have no criminal record.
-Are married, the marriage is monogamous and registered with the authorities.
-Where the answer differs according to the legal system applicable to the woman or man in
question (as may be the case in economies where there is legal plurality), the answer used will be
the one that applies to the majority of the population.
Page 5Doing Business 2020 Nicaragua
Starting a Business - Nicaragua
Standardized Company
Legal form Sociedad Anónima (S.A.) - Corporation
Paid-in minimum capital requirement No minimum
City Covered Managua
Indicator Nicaragua Latin America & OECD high Best Regulatory
Caribbean income Performance
Procedure – Men (number) 7 8.1 4.9 1 (2 Economies)
Time – Men (days) 14 28.8 9.2 0.5 (New Zealand)
Cost – Men (% of income per capita) 65.7 31.4 3.0 0.0 (2 Economies)
Procedure – Women (number) 7 8.1 4.9 1 (2 Economies)
Time – Women (days) 14 28.8 9.2 0.5 (New Zealand)
Cost – Women (% of income per capita) 65.7 31.4 3.0 0.0 (2 Economies)
Paid-in min. capital (% of income per capita) 0.0 0.4 7.6 0.0 (120 Economies)
Figure – Starting a Business in Nicaragua – Score
64.7 86.4 67.2 100.0
Procedures Time Cost Paid-in min. capital
Figure – Starting a Business in Nicaragua and comparator economies – Ranking and Score
DB 2020 Starting a Business Score
0 100
92.0: Panama (Rank: 51)
86.8: Guatemala (Rank: 99)
79.9: Costa Rica (Rank: 144)
79.6: Regional Average (Latin America & Caribbean)
79.6: Nicaragua (Rank: 145)
78.6: El Salvador (Rank: 148)
Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of
the scores for each of the component indicators.
Page 6Doing Business 2020 Nicaragua
Figure – Starting a Business in Nicaragua – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
14 45
40
12
Cost (% of income per capita)
35
10
30
Time (days)
8 25
6 20
15
4
10
2
5
0 0
1 2 3 *4 5 6 *7
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the
time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures
reflected here, see the summary below.
Page 7Doing Business 2020 Nicaragua
Details – Starting a Business in Nicaragua – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Sign the incorporation papers before a notary public 3 days USD 875
Agency : Public Notary
The documents of incorporation and the company bylaws must be drafted by a notary public. It is
customary to include the company bylaws in the document of incorporation. Most notaries will also
perform the remaining steps (explained in the following steps) in the incorporation process, for a
fee of USD 200 (on average). The notary cost is in between USD 750–1,000.
2 Buy the company's accounting and corporate books 1 day NIO 800
Agency : Bookstore
According to Article 28 of the Commercial Code, all companies must keep four corporate books:
two accounting books (diary and ledger) and two corporate books (minute book and share book).
The cost of the books may vary from one bookstore to another.
3 File the company's deeds (acta constitutiva), register the accounting books (sellado de 1 week NIO 350 (registration of
libros) and register as a trader (inscripción como comerciante) accounting books) + NIO
Agency : Representation of the Commercial Registry at the one-stop shop (Ventanilla Única de 300 (application as a
Inversiones - VUI) trader)
In February of 2014, the Public Registry of Nicaragua approved a resolution in allowing
entrepreneurs to file the incorporation statutes, to register the accounting books and the
inscription as a trader at the same time at the one-stop shop.
The cost for commercial registration is 1% of capital (with a minimum of NIO 1,000, maximum of
NIO 30,000) and the following fees apply:
- Inscription of constitution of internal books: NIO 100.
- Registration fee for books (diario, mayor, actas y acciones) NIO 350.00.
- Registration as a trader (inscripcion como comerciante): NIO 300.
- Form for municipal license (matricula): NIO 5.
- Municipal license: for social capital lower than NIO 50,000 is NIO 500; higher than NIO 50,000 is
1% of capital.
- Municipal license document (constancia de matricula): 1% of license fee.
The payment must be made in Banpro or Banco de Finanzas, and the payment receipt must be
presented at the one-stop shop. Regardless whether the company has income, it must declare
before the Nicaraguan Tax Authority (Dirección General de Impuestos) each month. If the
company has no sales, it will not pay any taxes. However, it will have to pay the fees for the
services performed by their representative in Nicaragua before the DGI.
4 Pay the inscription fees 1 day (simultaneous with 1% of capital (Commercial
Agency : Commercial Bank previous procedure) Registration) within a
Fees must be paid into any bank and the receipt presented to the one-stop shop (see Procedure minimum of NIO 1,000 and
5). There is a commercial bank within the Commercial Registry where the payment can be made. a maximum of NIO 30,000
+ NIO 100 (inscription of
internal books)
5 File the Single Document (DUR - Documento Único de Registro) to obtain registration with 1 day 1% of capital (municipal
Tax Authorities (RUC), social security (INSS), and the pre-municipal license (pre-matrícula) license fee) + 1% of
Agency : Representation of DUR (Documento Único de Registro) at the one-stop shop (VUI) or municipal license fee
the Tax Authorities (Dirección General de Ingresos - DGI) (municipal license
Companies must obtain the Single Registration Document or DUR (Documento Único de
document)+ NIO 5 (form
Registro), a document that allows to register at the same time for sales tax (Registro Unico de
for municipal license)
Contribuyentes - RUC), pre-registration at social security (INSS), and the pre-municipal license
(pre-matrícula) at the one-stop shop or at the DGI (Dirección General de Ingresos). In addition,
the payment of the pre-municipal license is now made at the one-stop shop with the same
document.
6 Obtain a municipal license (matrícula) 1 day no charge
Agency : Representation of the Municipality (Alcaldia de Managua) at the one-stop shop
(Ventanilla Única de Inversiones - VUI)
After obtaining the pre-municipal license with the application of DUR, entrepreneurs must go to
the delegation of the Municipality (Alcaldía) at the one-stop shop to obtain the official license
(matrícula).
7 Obtain a Social Security certificate and register the company's employees 1 day (simultaneous with no charge
Agency : Social Security Institute (INSS – Instituto Nicaraguense de Seguridad Social) previous procedure)
Business founders previously obtain an Employer’s number (número patronal) through the Single
Document or DUR (Documento Unico de Registro). Then, an Employer’s Certificate (certificado
patronal) must be requested at the Social Security Institute (INSS – Instituto Nicaraguense de
Seguridad Social). This visit is to obtain an activation procedure of the pre-obtained registration at
INSS, and to activate the registration the company must have at least one employee. The
employee needs to fill a form and with a copy of the employee’s ID the employer can request
employee’s registration. At the same time, the company can request access to the online
declaration service. INSS usually gives a training to use the system, which is set up a couple of
days after the registration of the employee is requested.
Takes place simultaneously with previous procedure. Page 8Doing Business 2020 Nicaragua
Dealing with Construction Permits
This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications,
requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building
quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional
certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information
What the indicators measure Case study assumptions
Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction
company, the warehouse project and the utility connections are used.
• Submitting all relevant documents and obtaining all necessary
clearances, licenses, permits and certificates
The construction company (BuildCo):
• Submitting all required notifications and receiving all necessary - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest
inspections
business city. For 11 economies the data are also collected for the second largest business city.
• Obtaining utility connections for water and sewerage - Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a
licensed architect and a licensed engineer, both registered with the local association of architects
• Registering and selling the warehouse after its completion
or engineers. BuildCo is not assumed to have any other employees who are technical or licensed
Time required to complete each procedure (calendar days) experts, such as geological or topographical experts.
- Owns the land on which the warehouse will be built and will sell the warehouse upon its
• Does not include time spent gathering information completion.
• Each procedure starts on a separate day—though procedures
that can be fully completed online are an exception to this rule The warehouse:
• Procedure is considered completed once final document is - Will be used for general storage activities, such as storage of books or stationery.
received - Will have two stories, both above ground, with a total constructed area of approximately 1,300.6
square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be
• No prior contact with officials located on a land plot of approximately 929 square meters (10,000 square feet) that is 100%
owned by BuildCo, and the warehouse is valued at 50 times income per capita.
Cost required to complete each procedure (% of income per
- Will have complete architectural and technical plans prepared by a licensed architect. If
capita)
preparation of the plans requires such steps as obtaining further documentation or getting prior
• Official costs only, no bribes approvals from external agencies, these are counted as procedures.
- Will take 30 weeks to construct (excluding all delays due to administrative and regulatory
Building quality control index (0-15) requirements).
• Quality of building regulations (0-2)
The water and sewerage connections:
• Quality control before construction (0-1)
- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water
• Quality control during construction (0-3) delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage
• Quality control after construction (0-3) infrastructure, a septic tank in the smallest size available will be installed or built.
- Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow
• Liability and insurance regimes (0-2) of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and
• Professional certifications (0-4) a peak wastewater flow of 1,136 liters (300 gallons) a day.
- Will have a constant level of water demand and wastewater flow throughout the year; will be 1
inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.
Page 9Doing Business 2020 Nicaragua
Dealing with Construction Permits - Nicaragua
Standardized Warehouse
Estimated value of warehouse NIO 3,126,452.40
City Covered Managua
Indicator Nicaragua Latin America & OECD high Best Regulatory
Caribbean income Performance
Procedures (number) 18 15.5 12.7 None in 2018/19
Time (days) 225 191.2 152.3 None in 2018/19
Cost (% of warehouse value) 5.7 3.6 1.5 None in 2018/19
Building quality control index (0-15) 3.5 9.0 11.6 15.0 (6 Economies)
Figure – Dealing with Construction Permits in Nicaragua – Score
48.0 42.7 71.3 23.3
Procedures Time Cost Building quality control index
Figure – Dealing with Construction Permits in Nicaragua and comparator economies – Ranking and Score
DB 2020 Dealing with Construction Permits Score
0 100
70.8: Costa Rica (Rank: 78)
68.2: Panama (Rank: 100)
65.3: Guatemala (Rank: 118)
63.2: Regional Average (Latin America & Caribbean)
52.3: El Salvador (Rank: 168)
46.3: Nicaragua (Rank: 176)
Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores
are the simple average of the scores for each of the component indicators.
Page 10Doing Business 2020 Nicaragua
Figure – Dealing with Construction Permits in Nicaragua – Procedure, Time and Cost
Time (days) Cost (% of warehouse value)
2.5
200
Cost (% of warehouse value)
2
150
Time (days)
1.5
100
1
50
0.5
0 0
1 *2 3 4 5 *6 7 8 9 10 11 12 * 13 14 15 16 17 18
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the
time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures
reflected here, see the summary below.
Page 11Doing Business 2020 Nicaragua
Figure – Dealing with Construction Permits in Nicaragua and comparator economies – Measure of Quality
12 11.0 11.0
10.0
10 9.0 9.0
Index score
8
6
4 3.5
2
0
Nicaragua Costa El Guatemala Panama Latin
Rica Salvador America
&
Caribbean
Details – Dealing with Construction Permits in Nicaragua – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain a soil test study 18 days USD 2,200
Agency : Instituto Nicaragüense de Estudios Territoriales
According to Article 27 (f) of Reglamento de Permiso de construcción para el Área del Municipio
de Managua – Reg No 2996-R/F 858897, a soil study is a requirement by law. This is to ensure
that the foundation of the building is solid since Nicaragua is a country with seismic activity. The
engineer must understand the suitability of the soil for the proposed construction work. Soil test
allows to build a solid foundation and avoid structures to be damaged or collapsed or leaned.
2 Obtain a topographical survey of the land 11 days USD 700
Agency : Private Engineer
Build Co. needs to obtain the topographical survey for the site plan design.
3 Request and obtain consultations with Municipality of Managua (Alcaldía de Managua - 7 days no charge
ALMA) about the urban plans
Agency : Municipality of Managua (Alcaldía de Managua – ALMA)
It is common practice to have an initial consultation with the Technical Urban Planning Committee
(Comité Técnico Urbanístico) to verify all conditions before submitting any document. The board
will open a file for the building permit if it is considered feasible. If BuildCo does not agree with the
decision, an appeal may be filed with the Technical Urban Planning Committee (Comité Técnico
Urbanístico).
4 Request and obtain the land use certificate (constancia de uso de suelo) from the 30 days NIO 500
Municipality of Managua
Agency : Municipality of Managua (Alcaldía de Managua – ALMA)
Once the file and the decision are obtained, a record number is created (to be used for the
following procedures until the project is approved). The documents to be submitted at this stage
are an application form, a copy of the location map, a site map, and the cadastral number of the
property.
5 Request feasibility analysis from ENACAL 15 days NIO 5,000
Agency : ENACAL
Upon the reception of the certificate for land use, a feasibility analysis from ENACAL is required to
determine whether the site can be connected to water and sewerage services. If no sewage
system exists, an alternative would be a treatment system approved by the MARENA
(Environmental Impact Assessment, Ministry of the Environment and Natural Resources).
Measurement of pressures at each coupling point - NIO 2,000
Gauging sewage in each probably discharge point: NIO 3,000
Total = 5,000
The costs are based on Resolution No. CD-RT-028-2008 published in Official Gazette No. 212 of
November 4, 2008
The documents to be submitted are an application form, the land use certificate, a project
description (physical modulation and activities), a plot plan on a scale of 1:10,000, the water
demand and use statement, and specifications of the inflow rate and the sewage characteristics.
The ENACAL approval certificate covers the project conceptualization and indicates that the
project is compliant with the standards and regulations. The required documents are a project
identification title page, topographic maps, an urban development plan, an existing infrastructure
plan, design drawings, detail drawings, and a descriptive report.
Page 12Doing Business 2020 Nicaragua
6 Request feasibility analysis from DISNORTE-DISSUR 7 days no charge
Agency : DISNORTE-DISSUR
In parallel, regarding electrical connection, a feasibility analysis from DISNORTE-DISSUR is
required to determine whether the site can be connected to the electrical network. The following
documents are needed: the (original) location map, a specification of the electrical capacity to be
installed, and the estimated start date of construction work.
Moreover, DISNORTE-DISSUR provides a review, design approval, and authorization, and issues
a decision stating that the proposed project conforms with the Manual of Norms of Construction of
Distribution (Manual de Normas de Construcción de Distribución), the electrical power supply
company. The following documents are required:
• Design license
• Electrical specifications
• Stack-out sheet
• List of materials
• Project drawings
• Photocopy of the electrical power and light contract
• Photocopy of the feasibility certificate
7 Request and obtain preliminary design approval from the Municipality of Managua 25 days NIO 1,000
Agency : Municipality of Managua (Alcaldía de Managua – ALMA)
BuildCo must obtain an approval stating that the proposed preliminary designs conform to the
Regulating Plan of the Municipality of Managua and to the land-use certificate.
The required documents are the land-use certificate; a notarized deed certifying ownership of the
land; the feasibility analyses by the Nicaraguan Institute of Energy (INE) and the Nicaraguan
Company of Water and Sewage (ENACAL); a local fault study endorsed by the Nicaraguan
Institute of Territorial Studies INETER, if required by the land use certificate; and two sets of maps,
each consisting of a location map on a scale of 1:10,000 (a site map on a scale of 1:10,000,
1:500, or 1:200 and a contour map); an architectural layout; exterior work drawings; and area
frames.
8 Request and obtain project approval at the Municipality of Managua 30 days NIO 3,902
Agency : Municipality of Managua (Alcaldía de Managua – ALMA)
A project approval is a decision stating that the project conforms to the Regulating Plan of the
Municipality of Managua. The fee for obtaining the approval is NIO 3.00 per sq. m., and payment
can be made either in cash or in two equal installments. The required documents are three sets of
plans and the approved preliminary designs.
The following documents are required:
Letter of request for service
Public deed duly registered
Preliminary Design approved
Two sets of plans
Memory calculation of the drainage system
Detailed Project Budget
Detailed Project Programming
Technical approval issued by ENACAL and UNION FENOSA
9 Request and obtain approval from Dirección General de Bomberos (DGB) 15 days USD 650
Agency : Dirección General de Bomberos (DGB)
Upon the approval from the municipality, BuildCo. can engage in the electric part of the
construction. is granted.Indoor electrical layout drawings must be reviewed and be found to
conform to all fire protection standards. For construction projects with commercial and service
purposes, the fee is US$ 0.50 per sq. m. (15-05-13 La Gaceta-Diario Oficial)
The required documents are electrical installation layouts, fire protection system plans, safety
measures, or plans provided for the construction work. Because the national firefighting system
(SINACOI) no longer exists, the institution in charge of this procedure is now Dirección General de
Bomberos (DGB).
Page 13Doing Business 2020 Nicaragua
10 Request and obtain building permit from the Municipality of Managua 20 days NIO 39,593
Agency : Municipality of Managua (Alcaldía de Managua – ALMA), One-Stop Shop
The building permit authorizes the start of construction.
The cost of a building permit includes a tax of 1.1% of the total market value of the construction.
This tax must be paid in full at the start of construction work.
Buildings are also subject to an inspection fee, as follows:
-NIO 2.00 per sq. m. for areas from 101 to 200 sq. m.
-NIO 3.00 per sq. m. for areas from 201 to 1,000 sq. m.
-NIO 4.00 per sq. m. for areas from 1,001 sq m and above
(in the case considered here, NIO 4.00 x 1,300.6 = NIO 5202.4).
Therefore, 1.1%* warehouse value + 4 * sq m. = NIO 39,593.4
The required documents are a project approval, an annual real estate tax (solvencia de bienes
inmuebles), the registration number with ALMA (the business registration), a tax clearance
certificate (solvencia municipal) for the project owner and builder, a builder’s license granted by
the Ministry of Transportation and Infrastructure (Ministerio de Transporte e Infraestructura, MTI),
the builder's signature on the construction plans, bank guarantees, and official payment receipts.
The building permit carries the same weight as a public deed.
Inspections may occur during construction. However, these are rare due to a shortage of
inspectors. Even if an inspection is carried out, the inspector would simply verify that the building
permit is valid.
11 Request fire inspection 1 day no charge
Agency : Dirección General de Bomberos (DGB)
The cost of a fire and electricity inspection is included in the inspection fee, which is paid at the
Dirección General de Bomberos (DGB). A site visit may be scheduled, but it is not a rigid
procedure.
12 Request and connect to water and sewage services 45 days NIO 20,000
Agency : ENACAL (Empresa Nicaraguense de Acueductos y Alcantarillados), Municipality of
Managua (Alcaldía de Managua – ALMA)
According to Resolution No. CD-RT-028-2008 published in Official Gazette No. 212 of November
4, 2008 ("Norma para el Desarrollo de Proyectos de Agua Potable y Alcantarillado Sanitario de
Centros Residenciales, Industriales y Comerciales") the cost associated to review and approval of
designs of industrial developments is NIO 17,000. Moreover,the installation cost is approximately
NIO 3000. This cost can be higher or lower depending on a possible rupture of pipelines.
Receive fire inspection 1 day no charge
13 Agency : Dirección General de Bomberos (DGB)
Fire inspection is conducted in parallel with water and sewage request.
14 Receive inspection from the Municipality of Managua 1 day no charge
Agency : Municipality of Managua (Alcaldía de Managua – ALMA)
The municipal inspection is a random inspection that may occur at least once during the 30-week
construction period. Thus, no request is needed. An inspection report is drafted and provided to
BuildCo. The construction work is not stopped during the inspection, and no costs are associated
with this procedure.
15 Receive inspection from the Ministry of Labor 1 day no charge
Agency : Ministry of Labor
Inspection by the Ministry of Labor is a random inspection that may occur at least once during the
30-week construction period. Thus, no request is needed. An inspection report is drafted and
provided to the company. The construction work is not stopped during the inspection, and no costs
are associated with this procedure.
16 Receive inspection from the General Directorate of Hygiene and Occupational Safety of 1 day no charge
Ministry of Labor
Agency : General Directorate of Hygiene and Occupational Safety of Ministry of Labor
Inspection from the General Directorate of Hygiene and Occupational Safety of Ministry of Labor
is a random inspection that may occur at least once during the 30-week construction period. Thus,
no request is needed. An inspection report is drafted and provided to the company. The
construction is not stopped during the inspection, and no costs are associated with this procedure.
17 Receive inspection from the National Social Security Institute 1 day no charge
Agency : National Social Security Institute
Inspection by the National Social Security Institute is a random inspection that may occur at least
once during the 30-week construction period. Thus, no request is needed. An inspection report is
drafted and provided to the company. The construction work is not stopped during the inspection,
and no costs are associated with this procedure.
18 Register the building with the Real Estate Appraisal Office 15 days no charge
Agency : Real Estate Appraisal Office (Avalúo de Bienes Inmuebles), Municipality of Managua
(Alcaldía de Managua – ALMA)
As a final step, BuildCo. register the new warehouse in the Real Estate Agency.
Takes place simultaneously with previous procedure. Page 14Doing Business 2020 Nicaragua
Details – Dealing with Construction Permits in Nicaragua – Measure of Quality
Answer Score
Building quality control index (0-15) 3.5
Quality of building regulations index (0-2) 2.0
How accessible are building laws and regulations in your economy? (0-1) Available online; Free 1.0
of charge.
Which requirements for obtaining a building permit are clearly specified in the building regulations or on any List of required 1.0
accessible website, brochure or pamphlet? (0-1) documents; Fees to
be paid; Required
preapprovals.
Quality control before construction index (0-1) 1.0
Which third-party entities are required by law to verify that the building plans are in compliance with existing Licensed architect; 1.0
building regulations? (0-1) Licensed engineer.
Quality control during construction index (0-3) 0.0
What types of inspections (if any) are required by law to be carried out during construction? (0-2) Unscheduled 0.0
inspections.
Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 0.0
inspections are not
always done in
practice during
construction;
Mandatory
inspections are done
most of the time
during construction.
Quality control after construction index (0-3) 0.0
Is there a final inspection required by law to verify that the building was built in accordance with the approved Final inspection is not 0.0
plans and regulations? (0-2) required by law.
Do legally mandated final inspections occur in practice? (0-1) Final inspection does 0.0
not always occur in
practice.
Liability and insurance regimes index (0-2) 0.5
Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use Architect or engineer; 0.5
(Latent Defect Liability or Decennial Liability)? (0-1) Owner or investor.
Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or No party is required 0.0
problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1) by law to obtain
insurance .
Professional certifications index (0-4) 0.0
What are the qualification requirements for the professional responsible for verifying that the architectural plans University degree in 0.0
or drawings are in compliance with existing building regulations? (0-2) architecture or
engineering.
What are the qualification requirements for the professional who supervises the construction on the ground? (0- University degree in 0.0
2) engineering,
construction or
construction
management.
Page 15Doing Business 2020 Nicaragua
Getting Electricity
This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally,
the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data
collection for the project was completed in May 2019. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to obtain an electricity connection (number) To make the data comparable across economies, several assumptions about the warehouse, the
electricity connection and the monthly consumption are used.
• Submitting all relevant documents and obtaining all necessary
clearances and permits
The warehouse:
• Completing all required notifications and receiving all necessary - Is owned by a local entrepreneur and is used for storage of goods.
inspections
- Is located in the economy’s largest business city. For 11 economies the data are also collected for
• Obtaining external installation works and possibly purchasing the second largest business city.
material for these works - Is located in an area where similar warehouses are typically located and is in an area with no
physical constraints. For example, the property is not near a railway.
• Concluding any necessary supply contract and obtaining final
- Is a new construction and is being connected to electricity for the first time.
supply
- Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square
Time required to complete each procedure (calendar days) feet). The plot of land on which it is built is 929 square meters (10,000 square feet).
• Is at least 1 calendar day The electricity connection:
• Each procedure starts on a separate day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-
• Does not include time spent gathering information kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).
- Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution
• Reflects the time spent in practice, with little follow-up and no network and is either overhead or underground, whichever is more common in the area where the
prior contact with officials
warehouse is located and requires works that involve the crossing of a 10-meter road (such as by
excavation or overhead lines) but are all carried out on public land. There is no crossing of other
Cost required to complete each procedure (% of income per
owners’ private property because the warehouse has access to a road.
capita)
- Does not require work to install the internal wiring of the warehouse. This has already been
• Official costs only, no bribes completed up to and including the customer’s service panel or switchboard and the meter base.
• Value added tax excluded
The monthly consumption:
The reliability of supply and transparency of tariffs index (0-8)
- It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours
• Duration and frequency of power outages (0–3) a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts
• Tools to monitor power outages (0–1) (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours
(kWh); hourly consumption is 112 kWh.
• Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.
• Regulatory monitoring of utilities’ performance (0–1) - Tariffs effective in January of the current year are used for calculation of the price of electricity for
the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.
• Financial deterrents limiting outages (0–1)
• Transparency and accessibility of tariffs (0–1)
Price of electricity (cents per kilowatt-hour)*
• Price based on monthly bill for commercial warehouse in case
study
*Note: Doing Business measures the price of electricity, but it is
not included in the ease of doing business score nor in the ranking
on the ease of getting electricity.
Page 16Doing Business 2020 Nicaragua
Getting Electricity - Nicaragua
Standardized Connection
Name of utility DISNORTE - DISSUR
Price of electricity (US cents per kWh) 33.4
City Covered Managua
Indicator Nicaragua Latin America & OECD high Best Regulatory
Caribbean income Performance
Procedures (number) 6 5.5 4.4 3 (28 Economies)
Time (days) 55 66.8 74.8 18 (3 Economies)
Cost (% of income per capita) 879.7 407.2 61.0 0.0 (3 Economies)
Reliability of supply and transparency of tariff index (0-8) 4 4.4 7.4 8 (26 Economies)
Figure – Getting Electricity in Nicaragua – Score
50.0 83.9 89.1 50.0
Reliability of supply and transparency of
Procedures Time Cost
tariff index
Figure – Getting Electricity in Nicaragua and comparator economies – Ranking and Score
DB 2020 Getting Electricity Score
0 100
88.9: Costa Rica (Rank: 25)
84.2: Guatemala (Rank: 46)
83.5: Panama (Rank: 51)
74.5: El Salvador (Rank: 87)
71.7: Regional Average (Latin America & Caribbean)
68.3: Nicaragua (Rank: 115)
Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the
scores for all the component indicators except the price of electricity.
Figure – Getting Electricity in Nicaragua – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
900
50
800
Cost (% of income per capita)
700
40
600
Time (days)
30 500
400
20
300
200
10
100
0 0
1 *2 3 *4 5 6
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the
time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures
Page 17Doing Business 2020 Nicaragua
reflected here, see the summary below.
Figure – Getting Electricity in Nicaragua and comparator economies – Measure of Quality
9 8
8 7
7
Index score
6 6
6
5 4 4.4
4
3
2
1
0
Nicaragua Costa El Guatemala Panama Latin
Rica Salvador America
&
Caribbean
Page 18Doing Business 2020 Nicaragua
Details – Getting Electricity in Nicaragua – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Submit informal application to DISNORTE-DISSUR to establish feasibility of project 7 calendar days NIO 0
Agency : DISNORTE - DISSUR
The customer submits a first informal application to DISNORTE-DISSUR indicating the required
electricity load and the location of the business that is to be connected. The Planning Department
of the utility will prepare a feasibility study based on its own plans for the primary distribution lines
in Managua and the existing demand in the system. No inspection of the site is necessary if the
connection point is within 150 meters.
2 Obtain compliance certificate for internal wiring from Fire Department 7 calendar days USD 155
Agency : Direcciòn General de Bomberos
The customer has to obtain a certification of the internal wiring installations from the Fire
Department. The Fire Department (Dirección General de Bomberos ) certifies that the internal
wiring has been done in accordance with the relevant standards for buildings as specified by the
""Norma CIEN"" (Código de instalaciones Eléctricas de Nicaragua). This certification has to be
obtained before applying for a new electricity connection with the utility.
In order to prepare the certification of the internal wiring the Fire Department (Dirección General
de Bomberos ) will visit the site.
3 Submit design and service application to DISNORTE-DISSUR and await approval 21 calendar days NIO 0
Agency : DISNORTE - DISSUR
The customer submits the service application together with the designs in person. The following
documents have to accompany the application:
• Name, address and telephone number of the applicant
• Photocopy of national identity card or power of attorney
• Photocopy of the property title or rental contract
• Inspection certificate from the Fire Department indicating that the internal wiring installation
complies with the norms established by the CIEN (Código de instalaciones Eléctricas de
Nicaragua).
• Photocopy of the social security number or business registration number of the customer (RUC -
Registro único del contribuyente)
• Photocopy of the company registration of the firm (used to assess which electricity tariff is
applicable).
DISNORTE-DISSUR has a list of approved firms that will realize the design of the actual
connection works. In order to be part of the list, firms have to be approved every year by the utility.
In most cases the design is done by the same firm that also will later do the works.
The utility will also approve the designs that have been prepared by the approved firm and work
hand in hand with the executing firm.
4 Receive site inspection by DISNORTE-DISSUR for design approval 1 calendar day NIO 0
Agency : DISNORTE - DISSUR
The utility inspects the site to approve the design
5 Await completion of connection works by private firm 18 calendar days USD 17,025
Agency : Contratista Privado
The works are done according to the relevant standards. They can be done either by a
construction firm or an approved electrical design firm. The customer can decide who he wants to
delegate the works to. The works are supervised by the technical department of the utility.
6 Sign supply contract and receive meter installation and electricity flow 8 calendar days NIO 20,870.13
Agency : DISNORTE - DISSUR
Once the works are finalized, the meter and metering accessories are installed by the distribution
utility and remain property of the utility. The meter is installed in a location that can be accessed
from outside the premise of the customer for inspections and meter reading. Otherwise the
customer has to given a written consent that the distribution utility can enter the premise.
The customer has to deposit a security that is calculated on the basis of one month of the future
consumption of the customer. The security deposit is returned with interest (average deposit rate
in the country) after 18 months if the customer had no late payment in this period.
Takes place simultaneously with previous procedure.
Page 19Doing Business 2020 Nicaragua
Details – Getting Electricity in Nicaragua – Measure of Quality
Answer
Reliability of supply and transparency of tariff index (0-8) 4
Total duration and frequency of outages per customer a year (0-3) 0
System average interruption duration index (SAIDI) 93.6
System average interruption frequency index (SAIFI) 45.7
What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0
Mechanisms for monitoring outages (0-1) 1
Does the distribution utility use automated tools to monitor outages? Yes
Mechanisms for restoring service (0-1) 1
Does the distribution utility use automated tools to restore service? Yes
Regulatory monitoring (0-1) 1
Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes
Financial deterrents aimed at limiting outages (0-1) 0
Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? No
Communication of tariffs and tariff changes (0-1) 1
Are effective tariffs available online? Yes
Link to the website, if available online http://www.ine.gob.ni/DGE
/tarifasdge/2017/12/pt_dic
iembre_2017_MT1.pdf
Are customers notified of a change in tariff ahead of the billing cycle? Yes
Note:
If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index.
If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.
If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.
Page 20Doing Business 2020 Nicaragua
Registering Property
This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a
building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality
of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access
to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally transfer title on immovable property To make the data comparable across economies, several assumptions about the parties to the
(number) transaction, the property and the procedures are used.
• Preregistration procedures (for example, checking for liens, The parties (buyer and seller):
notarizing sales agreement, paying property transfer taxes)
- Are limited liability companies (or the legal equivalent).
• Registration procedures in the economy's largest business city. - Are located in the periurban (that is, on the outskirts of the city but still within its official limits)
• Postregistration procedures (for example, filling title with area of the economy’s largest business city. For 11 economies the data are also collected for the
municipality) second largest business city.
- Are 100% domestically and privately owned.
Time required to complete each procedure (calendar days) - Perform general commercial activities.
• Does not include time spent gathering information
The property (fully owned by the seller):
• Each procedure starts on a separate day - though procedures
- Has a value of 50 times income per capita, which equals the sale price.
that can be fully completed online are an exception to this rule
- Is fully owned by the seller.
• Procedure is considered completed once final document is - Has no mortgages attached and has been under the same ownership for the past 10 years.
received - Is registered in the land registry or cadastre, or both, and is free of title disputes.
• No prior contact with officials - Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its
official limits), and no rezoning is required.
Cost required to complete each procedure (% of property - Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two-
value) story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse
is 10 years old, is in good condition, has no heating system and complies with all safety standards,
• Official costs only (such as administrative fees, duties and building codes and legal requirements. The property, consisting of land and building, will be
taxes).
transferred in its entirety.
• Value Added Tax, Capital Gains Tax and illicit payments are - Will not be subject to renovations or additional construction following the purchase.
excluded - Has no trees, natural water sources, natural reserves or historical monuments of any kind.
- Will not be used for special purposes, and no special permits, such as for residential use,
Quality of land administration index (0-30) industrial plants, waste storage or certain types of agricultural activities, are required.
• Reliability of infrastructure index (0-8) - Has no occupants, and no other party holds a legal interest in it.
• Transparency of information index (0–6)
• Geographic coverage index (0–8)
• Land dispute resolution index (0–8)
• Equal access to property rights index (-2–0)
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