What Business Should I Start in Nicaragua? 🇳🇮
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- Опубликовано: 23 авг 2024
- You are planning to move to Nicaragua and want to start a business, but what kind of business should you open here as an expat? #nicaragua #nicaraguainvestiga #expat
13 June 2023
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Just sent this video to my mom, we are Nicaraguan but she's thinking of starting another business back home in Leon. Currently she's building some rooms to rent, she's in Guadalupe. Ever
need anything or suggestions, feel free to contact us! Always a la orden!
As a Nicaraguan, that can make sense. That's a different situation. But still very much worth investigating carefully before getting in too deep.
@@ScottAlanMillerVlog trust me, my mom started a plastic business back in 2010 and it didn’t last long. Unfortunately, a lot of family meddling and too much cost forced at the shut down.
OUch. A plastic manufacturing business? Or just a plastics shop?
@@ScottAlanMillerVlog plastics shop, I think it was in the San Juan neighborhood. Big lesson learned, don't invest in family unless you are going to be there every day
Great video as always!
Thank you!!
LOL! I follow a guy in Costa Rica who says, "You are not the exception!" every once in a while. Guess it must be true!
I’ve been wanting to open a coffee shop in Nicaragua.
It's fun, but not a good business. If you do it because it's fun, it's a great idea. But cafe culture isn't a thing here and the few coffee places that there are are rarely busy. And prices are cheap, so it's a challenging business for sure. But as a hobby it can work well.
Yep, definitely minisplit airconditioners there haha, I guess that answered my question from the previous video! 😃
edit: those units are actually kind of neat because they can be taken off the wall and move to anywhere els with a connection fairly easily and they don't require a window to mount them in which obstructs views and creates potential areas for warmth and humidity to get through, and while not as good as central air conditioning are certainly an improvement over those old boxy window models.
My experience is that they are way better than central air. For lots of reasons. They cool the space many times faster. They cost less to buy and operate. They are easier to maintain. You can use them only where needed. They can cool in situations where central air cannot (I effectively cool the living space in a 5K sq ft Nicaraguan home with split units for cheap, when central air couldn't cool my 2K sq ft Dallas home. In Nicaragua we can go to 69F if we want, in Texas we couldn't get below 84F. In Nicaragua we pay $85/mo to be super comfortable. In Texas at $450/mo we were dying in the house because it couldn't get cool enough.)
I really dislike central air having grown up with it and having moved to something modern. Split units are the bomb.
@@ScottAlanMillerVlog That's awesome, I had no idea they were that powerful, I've certainly seen, and used them on my travels but I'd always just set them to 74 degrees and not try to see just how cold they could get.
Wow, $450 a month in electric in Texas 0_0, that's nutz, in the US I never spent over $280 and in my home country in England even less, but England is quite cool most of the year so it's not really needed and in the US I'm situated in the midwest so I guess it's not as bad as Texas heat.
My record in Texas was my roommates overused the AC and hit $800/mo in a 2K sq ft house in Dallas!!
@@ScottAlanMillerVlog OUCH!!!
@@hoppeanofasgard1365 yeah. that hurt. This month was C$2000 here. :)
What about doing the business to cover your living costs that’s it?
Video coming tomorrow on this.
Is Nicaragua crypto friendly? What is the Crypto On and Off-Ramp situation?
It's crypto-anonymous. It doesn't think about crypto at all. No one is really aware of it. There's nothing against it, it is wholly unused. There are zero resources for it and no one is prepared to use it in any way. So in a way it is friendly at a national level. But in a practical sense, it's useless.
I'm looking to get into the cigar import/export business, already have the logistics planned out, just need to get a distribution license in my state, but I will treat this like passive income/hobby if everything works out then great! lol
That'll be super tough because it's very regulated, but as long as you are considering it a hobby, it could be a lot of fun. I'd love to do that with coffee but there are a lot of logistics.
@Scott Alan Miller dude! Nicaragua have some of the best coffee I ever tasted!
@@ScottAlanMillerVlog I've been looking into the idea of a coffee farm in Nicaragua. I was thinking about farming not only coffee, but then drying out the cherry pulp to sell as cascara tea. However, I heard coffee farmers get ripped off when exporting, so they barely profit
I've heard that. But there are a lot of rumors here, it's a rumor culture.
Don’t run for last min I hate people who wait for last minutes to run for buying🙄🙄🙄
It's like you own a race horse because you like horses and like having a race horse, not because you are in the business of breeding and racing horses.
Exactly. And that's a perfect example as I grew up on a hobby horse farm in NY! Lost ALL kinds of money. Just collected horses (Morgans, not racing.)
@@ScottAlanMillerVlog Ooh, Morgans are awesome horses. We had a couple horses - not a hobby farm, as we didn't have enough property. We rented pasture space. Mine was a Quarter Horse - Saddlebred mix. Awesome personality.
Nice.
Have you ever heard of expats owning teak tree plantations Scott? I heard that was a good business if you can get all the logistics squared away with exporting it.
I have not, but that doesnt mean that you can't do it. Right now, all of the teak plantations that I know are over the border in Costa Rica.
@@ScottAlanMillerVlog Interesting, thanks.
I want to move to Nicaragua so i can work less, spend less and live more, not the opposite!
Right? lol. I realize that everyone moves for different reasons. But it seems really odd to make an effort to work more, earn less and not relax in paradise.
Hi, I am Canadian citizen I want to move to Nicaragua Managua and Rent a 10 suite hotel and operate that Since the cost of the rent is a good. Food costs Ect Is this a good business for a Expat (I am not a outdoor beach person)
I will reiterate that while most business's are easier to start in the US, intial start up capital is hard top come by, not saying it's easier to get in Nicaragua, not sure if it is or not, but banks in the US sometimes don['t even want to lend out 10g to a newbie let alone anything higher, also in the US if you want a storefront out of your home forget about, it's illegal, and in certain cities they've even made things like being a hair stylist illegal out of your house.
I've also heard they're starting to crack down on airbnbs as well.
AirBnB crackdowns are universal as most are tax or zoning dodges. The number of legal ones are very few.
Banks in the US might not lend to newbies, but banks elsewhere generally don't either. That's not unique to the US, the US is definitely friendly to business investing compared to most markets.
You can do a storefront in your house in Nicaragua, in fact, they basically make it free. But in the US, people would not like going to your house for a storefront anyway. That's more cultural than anything else. Growing up, storefronts were common in houses and people didn't like it. It went away over time.
But if you want a storefront in your house in Nicaragua, it means opting into a tax regime that basically guarantees minimal income potential and you aren't allowed to grow. It's a system for the super poor with single income families to support communities. It's not a "business" like you'd consider a business in the US. Essentially none of those businesses make enough for an expat to live comfortably, even when they do well. It's meant to be small time supplemental income when a family member is tied to the house for some reason (small children at home, elderly family members, etc.)
@@ScottAlanMillerVlog All fair points, but what would the likelihood be of starting a hair salon in Nicaragua out of your home with the potential to make 30k USD a year or more?
Suppose you're good at offering additional styles, hair colors and other such adjacent services then the locals, I'm thinking something like that could do well and with no overhead and virtually no taxs you'd be set in a country like this with such a low cost of living.
Not saying you can't do this anywhere in the US but most major cities are outlawing this practice and if you're stuck to doing it in smaller towns in the US you have a smaller client pool to pull from.
Then again, the areas where these traditionally did well in the US before banning them usually were in either immigrant or black neighborhoods, and most other areas perhaps due to how affluent they were or other cultural differences maybe didn't like the idea of going to peoples homes just like the store fronts.
@@hoppeanofasgard1365 i don't think you would reach 30k yearly here in Nicaragua as a hair style/salon. I pay 200 Cordobas for my haircut and beard and thats with me tipping the guy, normally they charge 150/haircut. My wife when she gets her hair done she pays around 30-40 Dollars depending on what she is doing. Now, my wife does pay 80-100 bucks in getting her microblading done, but you would have to market yourself extremely well as a top notch person. Is it doable making 30k a year? It's possible, but you would have to need strategic marketing against the well known stylist here.
@@gringo_abroad Sounds doable, but difficult, but at least I came up with something conceivably feasible. I've been tossing around ideas with Scott back and forth for a few days here and keep getting the rude awakening talk from him on all of them but this actually work so I'm happy 😁
$30K a year? Wow. If I thought it could make $10K a year, I'd open one tomorrow. I have salon staff ready to go. I have everything needed to open a salon. "Scott Alan Miller" is even the name of a salon chain in NY! My friend Allen that comments here often actually DID open a salon here and I think the result was "it doesn't even pay for the electricity."
Hey id love a bit of advice from anyone who has experience. Me and my nica friend are considering opening a small bar in Leon. How much do you think we would need to get up and running? Rent, taxes etc.. ? Thanks 🙏
Planning on renting a small commercial premises in the city centre and doing all the construction work myself..
The biggest cost there is going to be the property. Or at least the biggest cost factor. A super cheap bar location might be $200/mo. A good one in El Centro might be thousands. So the location will matter a LOT. You'll need to form an SA, that'll likely be $3K-$4K. Assume a few months once everything is done for the city to provide licensing. You'll need city, police, fire approval. All the standard stuff like anywhere.
Be aware that Leon is colonial historic. If you are in the city center you might not legally be allowed to do your own work. I know major bars that can't even paint their walls let alone do construction. So make sure you check on the restrictions on historic properties before you sign on the dotted line.
When you gave the Persian rug example you said that Nicaraguans that want to compete against you could just go get funding from the US or Canada but is it really that easy for a Nicaraguan to get funding for a business from US or Canadian sources?
Yes, it is. Because pretty much every Nicaraguan (remember it is a TINY population) has connections with people in the US and abroad who would love to invest in a business in Nicaragua but don't have any to invest in and there is a huge available pool of North American investors just looking for businesses here. There are people who can't, of course, but of people who might want to start a business and would have a good idea, access to funding isn't hard at all.
Like with many things, if thousands of Nicaraguas did that, the funding would become hard to find. But right now, there's way more funding than there are potential business ideas.
@@ScottAlanMillerVlog Makes sense, I just question whether investors would want to take on that risk, it's one thing if you have connections to Nicaragua, know the legal system, know what protections you have against fraud, misallocation of capital ect, but to fly it blind and just throw money into a business in Nicaragua seems foolhardy.
Remember it's a tiny market. There are plenty of US-based or foreign investors who know the market willing to put money into it. It's not that there is some huge number, just enough that if things existed, they'd step in.
I feel that most places in the US close earlier than in Managua….
I live in Whitefish montana. I also wish I could get food after 9pm
Most individual places do, yes, I would agree. What's different is that typically in the US something easily accessible and well known is always open. Taco Bell, Tim Horton's, something chooses to be the one business open super late. Maybe a Walmart or something. You can always get to something at midnight if you need to. Selection might be terrible. In Leon, by midnight, I have no idea where to buy anything except fruit (to eat.)
Does this apply to something capital intensive and extremely simple, like managing a short term rental?
It'll apply to different degrees, but is generally going to apply. Every successful rental I know of actually runs a US or Canadian business that makes the money and just uses a resource in Nicaragua to action some portion of the business. In that case, the business is North American, not Nicaraguan. Short term rentals have potential, but it is super risky as that market is full of scammers that try to steal your property when they manage it. So to really do it, you generally need to live nearby and keep an eye on things which is doable, but generally makes it hard to earn enough profits to justify the effort. But it IS possible, just limited. That is a business I would be willing to do, if the right property at the right price came up. So I wouldn't tell you it is crazy, only that the general problems that you will face will still apply.
If anything, I think high capital intensive businesses are the BEST option in Nicaragua, not the least. The market is totally flooded with low capital businesses. The few wildly successful businesses are ones where people brought levels of foreign investment that couldn't be matched locally. Like hundreds of millions of dollars. Then adding foreign expertise and other factors. That's how the Flor de Caña models work.
@@ScottAlanMillerVlog How is it that property managers attempt to steal the property? Possession of the property over a period of time gives them squatter rights or something to that effect? That makes sense to me, but isn't it common for people to use a "cuidador" to watch their property while away? Is the former risky while the latter is not? If so, for what reason?
What I've heard is that they offer to "deal with" some of the complicated matters for you and "conveniently" put the deeds in their own names. Sqatters aren't really an issue. Management companies are that claim that they are handling matters for you.
How is the legal structure better in Nicaragua for business?
Basically there IS a legal structure. The US is under Common Law, which is another way of saying "lawless" and "discretionary." On a global basis, what the US, Canada and UK have isn't a legal system at all. It's just discrimination disguised as chaos. Everything is expensive and innocent parties are the losers in the system. Those willing to make friends with the court own the legal system.
Nicaragua is civil law, the standard world recognized legal approach. So basically the same as Europe, the rest of Latin America, most of Asia, etc. The costs of the legal system are low, it isn't "pay to play", and the law is written so that you can research it ahead of time and know what you can or can't do.
@@ScottAlanMillerVlog Ah yea, I think I know what you mean, it's the reason why business's need so many lawyers in the US, everything is very complicated and can change on a wim and it's impossible for the average business to keep up with it all when they have so many other responsibilities, to make matters worse there is this situation of corporatism in the US where corporations are buddy buddy with many courts like you say.
The US is great for big business but not so much for the little guy, small business's will do well, yes, but with all of the overhead with insurance and lawyers the owners don't make nearly as much profit as they otherwise would.
To be fair, I'm small potatoes and still need a team of lawyers here in Nicaragua, too ;)
@@ScottAlanMillerVlog But theoretically you could do it your self if you had the time to look up the legal code and your comprehension of Spanish was at or near a local Nicaraguan's right?
Why don't Nicaraguan beaches get much tourism to make these ventures profitable?
There's a lot of factors, but the biggest, by far, is the massive media push from the US to keep people from visiting Nicaragua. Nicaragua has been a huge embarrassment to the US for 150 years and the country has a long standing cultural grudge against the one colony that they failed to stop from becoming free early on, and that overthrew their dictator and that has been a consistent demonstration that the policies polar opposite to the US' desires in the region are working beautifully for its population. So the US does anything it can to make the country look scary, dangerous, unwelcoming or whatever. Anyone who steps off of the plane into Nicaragua instantly discovers the astounding degree of US propaganda against its own citizens and deep rooted institutional racism against Latinos and that's not something that the US wants their citizens finding out. Nicaragua is THE best example of how aligning with the US has destroyed other Latin American countries. The US has a lot of resources to throw at making people decide not to look and see for themselves.
@@ScottAlanMillerVlog I can see some of that propaganda which you speak of, but the same if not more propaganda exists against Mexico, oh, it's dangerous, oh better not go there, oh you'll be robbed or shot not even a day after you step off the plane ect ect, and yet for the most part this isn't true and most Mexican tourist destinations tend to be safe and Americans know this, exceptions exist sure, but clearly what little danger does exist hasn't stopped Cancun or Puerto Vallarta from exploding with tourism certain seasons out of the year.
I'm curious to know which countries in the region have ended badly because of following US economic or legal policy, I'm familiar with how Batista was pretty bad for Cuba, but Castro was even worse.
I'm also familiar with the so called banana wars in Nicaragua and Guatemala but that's long since passed and I'm not sure Guatemala continues to be poor because of what the US did to it some 50 to 70 years ago, likewise I don't really see Nicaragua necessarily being better off than Guatemala in most regards.
I think you'll find that nothing comes close to what the US has done to Nicaragua and Cuba (Cuba more than Nica.) If you spend some time here, you realize quickly that Nicaragua is often a living open air museum to the American war machine against innocent peoples. It's something you come to see everywhere, at every turn. The devastation the US has wrought here is unthinkable.
How can we get in touch with you?
Email address is on the page, on every video and in the description. Can't miss it.
What kind of music do Nicaraguan like, and would there be a market for American style concerts?
Mostly Nicaraguan music! For real. But American rock and 70s/80s pop are huge, too. Reggaeton is big. Anything from Latin America. Those are the big things. Live music is huge, people go out for live music all the time.
There are big concerts here, but most big acts don't see enough money here as there are no super large venues so people travel to bigger cities outside the country.
Is there a market for concerts here? Yes, huge. But it is already pretty filled.
@ScottAlanMillerVlog sounds like you'd just have to be the guy that buys a large plot of land and makes a stage bigger than any other with better sound equipment than any other and you'd be the most frequented profitable venue in the country 😉
Well, but some venues have that and they find that they need to break it down and move it around the country as there just isn't enough demand in any one location. We had enormous venues and they didn't make it.
@ScottAlanMillerVlog geeze, Nicaragua really is a tough nut to crack isn't it?
One thing I was hoping you would touch on a bit more as a sub topic, is taxes (and you did very briefly).
If ex pats are opening businesses that are likely to fail AND also not providing much or any revenue, then what is the point when you then have to pay taxes on that in not only Nicaragua, but also back in the U.S (foreign income reporting nations in this case)? Even if you get an exclusion (since you aren't making much money!), you still would be better off sending the criminals at the IRS and the D.C agencies, a blank filing, and then just worry about your taxes back home or in another market right?
Unless you renounce your citizenship which costs time and ironically, money.
Really does seem a little silly even contemplating a business with all the hassle.
You're making more work and hassle IN Nicaragua for no return when otherwise you can Essentially live life there as a glorified long term tourist!
Your thoughts are correct. Except for the double taxation. Under all normal circumstances there is no double taxation. You have to have some knowledge of Nica and US tax regimes, but that's nothing major, just things you rarely research until it applies to you. But you can be very confident that you won't have to pay double taxes on any income. Nicaragua will definitely tax you fully, no question there. Corporate taxes here are moderate to moderately high and they will definitely expect to get them. But the US does not have any claim to any business profits from a Nicaraguan business. None, zero. The US only lays claim to any taxes when those foreign profits are realized as US income or capital gains at which point you are exempt since you SHOULD have set up as foreign earned income. You'd only have to START paying US taxes when your take home from Nicaragua was over $120K/year/person (so $240K for a married couple, for example.)
Which as corporate profits realized as income in Nicaragua is like off the hook baller. And remember that tons of your expenses would be classified as tax exempt earlier as business costs so you'd not be paying for those from your quarter of a million US dollars. So like my office equipment, computer, monitors, office chair, coffee machine, etc. is all corporate costs. My office real estate, etc.
And in the US you'd pay taxes on both portions, too, normally. The US is bad on taxes for sure, one of the worst, but it's good about not double taxing when abroad.
@@ScottAlanMillerVlog awesome!!! Always always always. Have a great evening.
Thanks!