, NICARAGUA – New Regulations for Voluntary Savings and Pension Funds

NICARAGUA – New Regulations for Voluntary Savings and Pension Funds

On May 23, 2022, the Interinstitutional Agreement MHCP-MITRAB-SIBOIF-No 01-2022 “Rules for the Constitution of Savings and/or Pension Funds” established in the Tax Law and its Regulations” was published, signed between the Ministry of Finance and Public Credit (MHCP), the Ministry of Labor (MITRAB) and the Superintendency of Banks and Other Financial Institutions (SIBOIF).

This Agreement arises to establish the regulations that will govern the Savings and/or Pension Funds Commission (“the Commission”), as well as the mechanisms for the approval, modification and/or denial of these, to provide them with of an adequate legal framework for its development.

In this sense, for the approval of a Savings and/or Pension Fund (“Fund”), an application must be submitted before the Ministry of Finance and Public Credit, who will send the respective proceedings to the Commission. To submit the application, it must be accompanied by a series of documents that prove compliance with the requirements set forth in Art. 10 of the Agreement, including a Draft Fund Operating Regulation.

This Project must contain at least the following:

  • Term of the Fund;
  • Forms of Participation in the Fund and conditions of permanence and withdrawal;
  • Contribution regime;
  • Applicable conditions to enjoy the benefits of the Fund;
  • Resource investment rules, if applicable;
  • Constitution of the Administrative Board or Committee, form of election and operation in general; and
  • Dissolution and liquidation procedure, as well as any other provision.

It is worth noting that in accordance with Article 5 of the Agreement, these Funds must have the following characteristics:

  • Be for the benefit of workers who work in institutions or companies, either public or private;
  • Have a minimum of 20 workers affiliated to the Fund;
  • Be made up of the contribution of the workers (and of the employer in case the latter so agreed;) and
  • Provide savings, credit or guarantee benefits exclusively to its members.

Along with these characteristics, it should be added that, in accordance with Article 8 of the Agreement, the Fund shall not be invested in the economic activities of the employer, and that the contributions of its members will be exempt from paying Income Tax.

The participation of workers in these Funds is eminently voluntary and these contributions do not replace the mandatory contributions of the employee and employer to the Nicaraguan Social Security Institute (INSS).

At CENTRAL LAW we have an experienced team of lawyers who will be able to advise you in the most diligent and integrated way to meet the needs of your company.

If you require more information in this regard, you can contact CENTRAL LAW at the following email address: info@central-law.com.


Avil Ramírez Mayorga


CENTRAL LAW in Nicaragua

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