The importance of promoting startups

The importance of promoting startups

The last weekend, I went to the XXI Business Show at the Universidad Americana (UAM), to see the ingenuity of the future professionals in Nicaragua. The show consisted in the presentation of business projects by the students of the university. The enriching event allowed to appreciate the creativity of students from diverse careers such as dentistry, engineering, accounting, finance or law.

Among the 90 projects designed by 400 students, creative business initiatives were presented, with economic profitability, in solidarity with the environment and social impact. There were many interesting projects such as digital orchards through a website ("Organica"), promotion of nostalgic products ("Chiguines"), bicycles designed with bamboo, green low-cost school supplies ("Edugreen") and other social projects. The vast majority of these were characterized by the use of digital media and the friendly treatment with the environment, promoting aspects related to Nicaragua.

Promoting entrepreneurship is something that unfortunately in this country has not recognized enough merit, so this type of university initiatives are worthy of praise. However, we must emphasize that from all projects presented in business shows, studies have shown that only 5% are developed by its creators. That number means that of the 90 projects presented, maybe 2 will see light. An alarming number.

What are the causes of this stagnation? Perhaps it is the lack of legal incentives given to new businesses, complementary with how difficult it is for a young inexperienced to obtain financing from a bank in Nicaragua. Other cause can be attributed to fear of swimming among sharks. And so we find another reasons or excuses. Despite this, we must encourage young people to have an entrepreneurial vision in their life, for, among other things, develop innovative business projects.

An example of the imaginary barriers that we impose is on the tax issue, where people believe that all companies pay 30% of income on economic activity, when our tax system has designed a special system aimed at small Businesses. This scheme is called fixed quota regime, and allows a company to settle in a market and prepare their accounting, paying a certain amount of money affordable as the unique tribute. Another support from our system is found in projects that are related to tourism, where the project can be exempted from payment of taxes on income, property, value-added, import, and others, for a specified period of time as long as certain requirements are met. Do the financial numbers look better now?

Added to this, we must highlight that there are incubators of startups in Nicaragua, which help the ingenious projects to move forward.

The related examples are just a small sample that serves to prove that there is no reason to be afraid to go swimming in the sea, as long as you have the adequate legal advice. Our duty as lawyers in CENTRAL LAW is to foster the development of ideas, looking for its materialization. So for us, all startup is valuable, from the design of the corporate structure and shareholder agreements to seeking financing, including all permits and licenses that may be required.

In CENTRAL LAW Nicaragua we have developed projects of all sizes, with an experimented legal team, ranked as one of the best firms in the country by the most prestigious magazines.

Avil Ramírez Mayorga
CENTRAL LAW Nicaragua

 

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