As part of our usual work, we have observed an increase in the number of foreign clients that request services related to obtaining a Nicaraguan residence under the category of rentiers or pensioners, as well as Nicaraguans who after a long time residing abroad, have decided to return to our country.
In that sense, we have decided to prepare a brief instruction on the steps to follow in customs matters, so that when obtaining residence (in the case of foreigners), or returning to our country (in the case of Nicaraguans) they can take advantage of the benefits granted by law.
LEGAL BASIS: Before proceeding, it is necessary to mention that our legal basis for the aforementioned procedures, are laws Law 694, “Law for the Promotion of Entry of Retired Residents and Rentier Residents”, and Law No. 535, “Special Law of Migratory incentives for Nicaraguans living abroad”, respectively.
We will begin by defining, the two migratory categories under which foreigners can apply to residence in our country, making use of the benefits granted by the first of the previously mentioned laws.
The Arto 2, of Law 694, are defined as:
PENSIONED RESIDENT: National or foreign natural person who enjoys a pension or retirement from governments, public or private institutions, equivalent in national currency to the amount of Six hundred Dollars of the United States of America (US$ 600.00) monthly minimum and that want to permanently reside in Nicaragua.
RENTIER RESIDENT: National or foreign natural person who enjoys a permanent stable income generated abroad for a minimum monthly amount equivalent in national currency to the amount of Seven Hundred Fifty Dollars of the United States of America (US$ 750.00) and who wish to reside permanently in Nicaragua.
Who applies to the exemption benefit?
Citizens who comply with what is described in the categories described above, who have a Residence Card, extended by the General Directorate of Migration and Foreigners, may qualify for the tax exemption benefit on the Importation of Household, Vehicle, and even Household Import the case of Rentier Residents in the Importation of their tools for the exercise of their profession.
For each case there are exceptions, and competent bodies responsible for issuing the corresponding authorizations.
In the case of pensioners and rentier residents, the corresponding instance for the approval of such categories is the Nicaraguan Tourism Institute (INTUR by its acronym in Spanish), which through Administrative Resolution not only categorizes the interested parties, but specifically authorizes the list of goods, which will be authorized by seal on each page of the packing list, that must be attached duly numbered to the Administrative Resolution of authorization, based on this law. It is recommended not to include in the packing list luxury goods that are not considered household goods, e.g.: liquors, perfumes, food, medicines (in these cases, when special licenses are required – food, medicines and liquors case – and because they are considered goods sumptuary, it is better to omit them from the packing list that must be submitted for approval by INTUR.
Another important aspect to highlight is that the exit of the country of the household or vehicle must be managed, once the INTUR Resolution has been issued, this in order to avoid charges for fiscal storage, tacit abandonment of the merchandise for not having the complete requirements to proceed with the nationalization of the goods (household goods and / or vehicle) with the corresponding tax exemption.
The process of obtaining the Nicaraguan residence card requested by the General Directorate of Migration and Foreigners can take 6 months or more, depending on each particular case. In this period of time, migration carries out all the pertinent steps such as, the interview to the interested party, home visit, as well as the review of all the documentation presented in order to verify compliance with all legal requirements.
Next, we will indicate What is considered Household Items?
Household goods include all new or used goods and appliances that, not being luggage for the traveler, are used for comfort or decoration of a house, such as: home furnishings, appliances to facilitate household chores and for family distraction; dishes, cookware, upholstery; carpets, bedding, bath and objects that are hung from ceilings or walls, as well as those that are placed on others for practical, artistic or emotional reasons, such as portraits, vases, ashtrays, pillows, cushions and the like and in general those recognized as household goods by customs legislation.
Does the Household Items for the rentier resident and pensioner resident categories have a value limit?
Yes, the value of the household to be exempted, is of a maximum amount of US$ 20,000.00 (twenty thousand United States dollars net). (See Art. 7 numeral 3, of Law 694).
How long does the nationalization procedures in the General Directorate of Customs Services take?
The registration process in the User Management Module (MGU – General Directorate of Customs Services) and the consequent authorization issued by the DGA can take 1 month and a half, due to the fact that customs submits the registration applications to verification. The DGA Operational Review Division proceeds to schedule on-site inspection to verify the existence of the applicant. This application also passes verification and review of the attached supporting documents;
- Certificate of residence
- Proof of Pension or Income (which must be issued by a public or private entity stating that the pensioner receives a retirement pension that indicates sufficient income to support himself, or sufficient income for the same purposes for rentier residents, same document that has to be presented before immigration)
- INTUR Resolution
- Packing list of household goods sealed on each page
- Registration of Customs Entries and Exits (RESA)
After the registration process with the DGA (MGU), the Customs Agency in charge will digitally submit an application to the Ministry of Finance and Public Credit (MHCP by its acronym in Spanish), through a centralized system known as MODEXO, where the authorized customs agent can provide online tracking to the internal instances of the MHCP authorize the applications in form and substance, once authorized by the Treasury, nationalization can be carried out through a Customs Declaration of Definitive Importation with the exception of taxes.
In the case of returning Nicaraguans, we indicate who can apply to the benefits of this Law, as follows:
Nicaraguans residing abroad for more than five years prior to the date of entry into force of the law mentioned above in this article (Law No. 535) may apply, that is, those Nicaraguans residing abroad since before May 2000.
It is necessary to be emphatic in this aspect of the law, since it is not enough that Nicaraguans have lived abroad for 5 nominal years, but that the approval of this right is subject to the citizen leaving 5 years before the entry into force of the aforementioned law.
What do you have the right to exonerate this category?
They have the right to exonerate in the payment of customs duties and other import taxes on their household items (for a maximum amount of US$ 20,000.00 (twenty thousand United States dollars net), a new or used motor vehicle with a maximum value of US$ 25,000.00 (twenty-five thousand dollars of the United States of America net), and tools for professional practice worth up to US$ 200,000.00 (Two hundred thousand dollars of the United States of America net).
Household items are considered for the purposes of what is stated in the previous paragraph, which was indicated above in this article.
What are the documents required to qualify for the benefit?
The Nicaraguan who wishes to opt for this benefit must submit supporting documents proving their residence in the country of origin before the effective date of the law indicated above. These supporting documents may be lease contracts, social security history, receipts for payments of basic services at the place of residence, these documents, together with the packing list and the title of the vehicle to be requested must be submitted to the Nicaraguan consulate closest to the Nicaraguan domicile abroad, to be properly sealed. The consulate will proceed to issue its endorsement detailing the information of the applicant, and indicating that it meets all the requirements imposed by law, then this endorsement must be submitted by a customs agency to the request of approval by the commissioned entity, which for the purposes of this law is the Ministry of Finance and Public Credit.
Once the endorsement of the consulate has been obtained the sealed documents and certificates, the merchandise is imported for the generation of the RESA (Registration of Warehouse Inputs and Outputs). This implies that the merchandise will be in customs custody in the Fiscal Warehouse for as long as the registration and approval process takes. In addition, a immigration record must be requested at the General Directorate of Immigration where it can be verified that the requesting Nicaraguan resided abroad during the 5 years contemplated by law, including contemplating income to the country, not exceeding one month of stay. This immigration record is another requirement that must be attached to the application.
Once all these documents have been obtained, the applicant must proceed to prepare a notarized declaration, whereby the applicant agrees to use his household items for the purpose stipulated by law.
In the first instance, the documents proceed to request the temporary RUC (single taxpayer registration) for the importation of household goods, before the General Directorate of Revenue (DGI). If the applicant has no outstanding obligations, the process will last 1 day. Otherwise, once the RUC is obtained, registration will be requested in the Customs System (MGU) in order to access the virtual interconnected operations management platform DGI / MHCP / DGA, outstanding obligations must be paid, and then wait for the final review and approval.
This next stage of registration before the DGA is subject to verification of the applicant’s home address, for this reason this approval process can take up to 1 month and a half, time during which the household items will tacitly fall into abandonment even while under customs authority in temporary deposit scheme. This incompatibility of deadlines will result in expenses for the fiscal storage of household goods, and a fine for salvage for abandonment, which must be assumed by the applicant at the end of the naturalization process with tax exemption.
This brief guide is intended to provide a basic idea of the procedures that must be carried out by people who qualify according to the categories described above, the intervention of a legal advisor and a customs agent will always be necessary to facilitate the process for the user.