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Latin America Investment News on Viva Tropical

This Is the Slowest (Central American) Country for Business Start Ups

Article Summary:

It takes 36 days to start a business in Nicaragua. One of the longest time frames in all of Central America for formalizing a new business.

Photo Credit :La Prensa Nicaragua

Original Article Text From La Prensa Nicaragua via Google Translate :

Start a Business: more expensive and time consuming

While in Panama are needed five days to open a business in Nicaragua for 36 days are required, within the highest in Central America, according to Doing Business 2014, World Bank (WB), which assesses 189 economies. The situation gets worse when compared with New Zealand, the nation that leads the global indicator, which only needed noon to jump-start a business.

In Honduras, the economy that shares similarities with that of Nicaragua in Central America, while the nation where more procedures should be made to open a company, within 14 days it is operational, the second lowest interval the isthmus. Then follows El Salvador (16.5), Guatemala (19.5) and Costa Rica (24).

If Nicaragua is the third largest economy with a lower number of procedures to start a business and Honduras which provides more mechanisms for that purpose, then why in the country require many more days? The report reveals that “bottleneck” is in red tape and obtain permits for substantial electricity, construction and even property registration, among others.

The president of the Superior Council of Private Enterprise (Cosep), Joseph Adam Aguerri admits that streamlining business start remains one of the great challenges facing the country in entrepreneurship. Efforts are being made, stresses, but still insufficient. Create it takes political will.

Her biggest regret is that Aguerri Central American countries are moving faster in improving the conditions for undertaking business and Guatemala.

In fact compared to the 2013 report, the World Bank notes to Nicaragua improvement in reducing numbers of days to start a business. Regarding the last report period was shortened three days, from 39-36. But in the case of Guatemala, for example, declining year to year was 20.5 days, from 40 to 19.5. In the case of Costa Rica the number of days increased from 60 to 24, which means a relief of 36 days.

These rapid advances in Central America is precisely what is a disadvantage for Nicaragua against the arrival of foreign capital.


Among the steps that have been taken in Nicaragua is the creation of a single window, the formation of the committee of trade facilitation and some settings laws. “Here we still need a greater willingness to talk in Nicaragua we have indicators that other Central American countries, for example in the number of days,” says Aguerri.

That is a position also shared by the executive directors of the Chamber of Industries of Nicaragua (Cadin), Roberto Solorzano, and the Chamber of Commerce and Services of Nicaragua (CCSN), Eduardo Fonseca.

Both recognize that efforts are being made to advance business start but there is still plenty of material to be cut.

Fonseca says he’s improved, because “some four years or more to open a business took 180 days and are now 36. You have to keep working at it, the other countries are improving faster than us. ”

While the one-stop shop has been a big boost, mainly because previously had to go from one institution to another to make the appropriate arrangements, Fonseca said that the issue of red tape and the time it takes to obtain certain permits must be improved.

Another advance, according to Fonseca, is the fact that now the Directorate General of Revenue (DGI), the Directorate General of Customs (DGA) and the Nicaraguan Social Security Institute (INSS) share an electronic record of information, “and in theory this will help reduce the days to start a business. ”

“When you go to register, for example to the DGI, the information is crossed to the other directions,” he explains.

In that sense, says there Aguerri other ministries are working to expedite the process of opening a business, but others refuse to do so, but avoids specifying names.


The high cost of starting a business is another barrier in Nicaragua. According to Doing Business 2014, to jump-start a business in the process of creating the same as equivalent to 77 percent of the country’s per capita income is spent, what the BM stands at $ 1,650. This cost is the highest in Central America.

In Panama is 7.2 percent and has a per capita income of $ 9.910, in Costa Rica is 9.5 percent of $ 8.740, in Guatemala 19.5 percent of $ 3.120, in Honduras, 45.3 percent of $ 2.070, and in El Salvador 45.5 percent from $ 3.580, according to the report.

Solorzano, who is part of a facilitation committee investment promotion agency of Nicaragua Investment (ProNicaragua), remember that the country already has other headwinds for investors, such as the high cost of energy and fuel . That is why even having cheap labor put in a privileged position to Nicaragua, because the bureaucracy is the worst evil and high costs scare any investor or even a national who wants to start a business, consider.

Link to Original Article:

From La Prensa Nicaragua

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