With a population of just under 10 million, Nicaragua is a Central American nation that has been blessed with an abundance of natural resources and an infinite amount of natural beauty. Some of the densest and deepest rain forests on the globe, complete with a diverse variety of exotic flora and fauna, can be found in Nicaragua. The beaches of this beautiful country are long and untouched, with crystal clear turquoise waters and golden sands.
All of this means that Nicaragua already has a vibrant tourism industry that is rapidly growing. However, despite the country’s perpetually growing economy, it remains one of Central America’s poorest nations. But that could soon be about to change. In 2017, the government of Nicaragua launched a Citizen by Investment (CBI) program with the sole purpose of attracting ambitious wealthy foreign investors.
Why Pursue Nicaraguan Citizenship
The CBI program of Nicaragua provides foreign investors – especially those from Africa, the Middle East and Asia – the opportunity of owning citizenship to a country that possible has a better reputation than their home country. This also means that they get the opportunity to hold a passport that is far more powerful than their existing one. The power of a passport is judged by the number of countries it provides access to without needing to be stamped with a visa.
The passport of Nicaragua currently provides visa-free access to 122 nations around the world, including the 27 European Union member states, the United Kingdom, all of the states in Western Europe and Eastern Europe, and Eurasian countries like Russia and Ukraine. As Nicaragua’s reputation as a safe nation continues to grow, so will its visa-free country quota.
Teak – The Ultimate Commodity Attraction
The greatest attraction Nicaragua offers to foreign investors is its huge timber forests. The Central American Country is one of the world’s leading producers of precious hardwoods, particularly teak. In the world of investments, it’s common knowledge that timber is a safe and high-yield investment. In fact, timber only ranks below oil and natural gas on the list of world commodities, and timber holdings have been one of the highest performing alternative investments for the last four decades.
But the particular type of timber we’re talking about here is Nicaraguan teak. An incredibly versatile hardwood, teak can be used for everything – from outdoor furniture to flooring, windows, doors and even boats. Teak farms are an excellent long-term investment option since they protect the investor from inflation. Since teak has a shorter growth cycle, it has great potential for producing short-term profits as well.
Moreover, the real estate markets in China and countries from South Asia have recently overseen a boom, which has subsequently led to a drastic increase in teak demand. And basic economics tells us that high demand equals high prices.
Furthermore, the government of Nicaragua offers attractive offers attractive incentives for timber projects. The revenue you will generate from teak plantations will be taxed at an extremely favourable 8%. Moreover, you can become eligible for Nicaraguan residency through investing in a timber project. And the good news doesn’t stop here. You can also make a teak plantation part of your real estate portfolio. All it would require is an investment as little as $26,500 – an investment that could qualify you for Nicaraguan residency.
How To Get Nicaraguan Residency
The Citizen by Investment program of Nicaragua essentially offers two options to potential foreign investors:
- Corporate Investment: Make a refundable investment of $100,000 into the country through a Nicaraguan Corporation.
- Purchase Real Estate: Purchase a real estate property in Nicaragua with a minimum value of $100,000.
Another way to get a Nicaraguan residency is through the retiree program. To qualify for the program, you need to be at least 45 years old and have a guaranteed monthly income of at least $600. While most individuals who apply for this program do it on the basis of fixed pension payments, you also have the option of setting up a bank annuity that will qualify.
In addition to needing a guaranteed monthly income of $600, you’ll also need an additional $100 for each dependent. Your spouse and each child under the age of 18 will count as dependents.
Perhaps the best way to gain residency to Nicaragua is via their reforestation visa program. All you need to do in order to obtain permanent residency is invest a minimum of $35,000 in a government-approved reforestation program. However, this figure does not include legal and government fees, which are around $10,000 for individuals who’re from restricted countries. The fees are much lower for individuals who’re from the US, the UK, Canada, EU, etc.
What You Need To Apply For Nicaraguan Residency
You’ll need the following documents to apply for a Nicaraguan residency:
- A copy of your birth certificate.
- A copy of your passport.
- A certificate from a medical professional which states you don’t have any communicable disease and are in good mental health.
- A certificate from the police stating your criminal record is clear.
- A certificate from your pension plan or bank which affirms that you have the sufficient finances to meet the minimum requirement of $600 a month.
Another great bonus is that a Nicaraguan residency visa allows you to import certain household items from the US absolutely duty-free. For instance, you can import a car with a value of up to $25,000, and household items worth $20,000. Furthermore, you can import a car worth $25,000 once every five years absolutely tax free. This is a big bonus when you consider that import taxes in Nicaragua are generally quite high.
The Bottom Line
Nicaragua’s residency program is only second to Panama’s in the list of the top Latin residency programs. I would say that Panama is better for citizens of the US, the UK or any of the top 50 nations. However, if you’re from a country that’s not in the top 50, and you prefer a lower cost of living with a more laid-back lifestyle, Nicaragua is, in my humble opinion, the better choice.
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Want to hear an amazing podcast? This podcast is one of our listeners favourite episodes. Rachel Jensen from ECI talks with me about Investing In Teak and about buying real estate in Latin America. After you have listened and are super stoked, go to the webinar that Rachel and I have done, it will answer every single question you have and point you in the right direction! Enjoy!
About The Author
Mikkel Thorup is the host of The Expat Money Show podcast and Director of Content at Escape Artist. He is also the author of #1 Best-Selling book Expat Secrets on Amazon. He has spent nearly 20 years in continual travel around the world, visiting more than 100 countries including Colombia, North Korea, Zimbabwe, and Iran. His goal is to help people just like you to generate additional streams of income, eliminate your tax bill, and take advantage of offshore structures so you can travel the world freely and never have to worry about money again. For more information on his legal (but creative) tax strategies for Expats watch this free video.
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