If you’re hoping to move to Nicaragua, you must be aware of Nicaraguan visa and residency requirements.
All passports must be valid for at least six months beyond the date of your entry into the country.
Citizens of the U.K., U.S., Scandinavia, Guatemala, El Salvador, Honduras, Argentina, Chile, Bolivia, and the European Union do not need visas and are issued a tourist card (US$5) valid for 90 days on arrival. Citizens of Australia, Canada, New Zealand, and European countries that do not have reciprocal agreements with Nicaragua will require either a visa or a tourist card allowing a 30-day stay.
Those who require visas must also obtain an exit permit; however, if you are in Nicaragua on business, you are usually exempt from the requirement.
Nicaragua’s retirement laws resemble the old pensionado rules that were in place in Costa Rica in the 1980s, attracting thousands of expatriates to that country: They provide significant tax incentives for foreigners, and they encourage investment in the country.
Resident expatriates say it is as much–perhaps more–the warmth of the people that attracts them to Nicaragua as any other factor, such as the tropical climate, bargain property prices, or attractive government incentives. But the government program is often a key deciding factor: It’s fairly easy to qualify for retiree status, the paperwork is minimal, and the benefits compare favorably with those in other, neighboring countries.
Law of Resident Pensioners and Retirees (Decree 628): Nicaragua passed legislation to encourage retirees and pensioners to move to the country. The Law of Resident Pensioners and Retirees gives benefits mostly in the form of tax incentives.
To qualify, you’ll need to prove to the Nicaraguan government that you’re actually a citizen of the country where you claim your nationality, that you’re in good physical and mental health, that you’re in good standing with the local police, and that you have an income equivalent to at least $600 a month from Social Security or a pension. Add an additional $100 for each dependent family member living with you in Nicaragua. The minimum age for eligibility is 45, but this can be waived if the applicant proves a stable income.
Tax Incentives for Retirees
The benefits come mostly in the form of tax incentives. As a foreign retiree, you’re entitled to:
- Pay no taxes on any out-of-country earnings
- Residency for five years, with the ability to renew
- Bring into Nicaragua up to US$20,000 worth of household goods for your own home, duty free
- Import one automobile for personal or general use and pay no import tax or protective tariff and sell it after five years, again exempt from consumer sales tax
- Import an additional vehicle every five years under the same duty exemptions.
There are, of course, some stipulations and restrictions. According to Article 8 of the law, a foreign retiree “cannot work in any industrial or commercial activity or hold a job paid in local currency.” But the Nicaraguan consulate in the United States assures us that the law is open to liberal interpretation. If you want to open a small hotel or restaurant, for example, an enterprise that would benefit the community in some way, say by attracting tourists or creating jobs, then you’d merely have to present your plan to the Ministry of Economy and Industry and ask for an exception to the rule.
There is, in fact, one exception already on the books: If you own real estate in Nicaragua that is worth at least US$100,000 and are deemed by the Ministry of Economics and Industry to be making profitable investments in the country, then you are free to work and still receive the benefits of a foreign retiree.
What You Need to Apply for Retiree Status
You’ll need to prove to the Nicaraguan government that you’re actually a citizen of the country where you claim your nationality, that you’re in good physical and mental health, that you’re in good standing with the local police, and that you have an income equivalent to at least US$600 a month. First, you need to bring to the Nicaraguan consulate the following notarized documents (you’ll need to have a lawyer translate them into Spanish and have the Spanish versions notarized as well):
- A copy of your birth certificate
- A copy of your passport
- A certificate or letter from your doctor stating that you’re in good physical health, are free from communicable diseases, and are mentally sound
- A certificate or letter from your local police department stating that you’ve not been convicted of any crime
- A certificate of income from your bank or pension plan affirming that you’ll have enough money to meet the minimum requirement of US$600 a month
- A list of the household goods you will be importing.
Other Residency Categories
Although the pensionado residency is the most popular with those seeking to retire in Nicaragua, there are several other residency categories available.
Similar to the pensionado status, except $750 in monthly income is required. And it should come from income from investments, certificates of deposit, stocks, or retirement plans. You get the same benefits as far as importing household goods and a vehicle.
This residency class is available to any foreigner who invests at least $30,000 in any kind of business in the country, including tourism, real estate, fishing, natural resources … anything. You must pass an inspection by the government and go through several steps to be approved. The family of the investor is also eligible for residency.
*Prices as of 2013
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