The Act Promoting the Tourism Industry (306/1999), published in La Gaceta 117 of June 21 1999, repeals Decree 520/1960 and its amendments. The act states that tourism is an industry of national interest and grants incentives and benefits to national and foreign investors that have been authorized by the Nicaraguan Institute of Tourism.

Natural persons or entities investing directly in the development of tourism activities, or indirectly financing such activities, are granted tax exemptions and fiscal credits if the investment falls within special zones of planning and development of tourism. Such zones are defined and determined by the institute, and include areas that are attractive to tourists but are presently undeveloped.

The incentives include:

  • a 20-year exemption from import and sales taxes;

  • a 10-year exemption from value added tax;

  • a 10-year partial exemption from income tax.

Banking institutions that grant loans and offer financing to promoters and/or operators of tourism projects that fall within the defined zones are exempt from paying income tax on interest earned during the duration of the loan.

For further information on this topic please contact Carlos Taboada Rodriguez at Taboada & Asociados by telephone (+505 2 683 839) or by fax (+505 2 668 088) or by email ([email protected]). The Taboada & Asociados website can be accessed at