New regulations on transparency for Nicaraguan legal entities

On 19 June this year,“Act No. 1282, the Act Amending and Supplementing Act No. 977, the Act Against Money Laundering, the Financing of Terrorism and the Financing of the Proliferation of Weapons of Mass Destruction’, came into force on 19 June this year. This Act introduces significant changes regarding the transparency of legal persons and the disclosure of beneficial ownership.

In particular, Articles 13 and 13 bis set out new obligations that must be complied with by domestic and foreign legal entities operating in, or seeking to establish business relationships in, Nicaragua, or which are shareholders in Nicaraguan entities.

Article 13, relating to the transparency of legal persons and legal structures, provides that commercial companies, trusts, cooperatives, non-profit organisations and other legal persons or structures, whether domestic or foreign, established in Nicaragua, must maintain up-to-date information on their ultimate beneficial owner, as well as on their ownership and control structure. In the case of shareholders that are themselves legal entities, they must also provide information on their own structure and ultimate beneficial owner.

Furthermore, this information must be made available in a timely manner to the judicial, supervisory and investigative authorities, the Financial Analysis Unit (UAF) and other competent authorities.

The law also stipulates that legal persons shall be obliged to provide this information in any procedures they undertake with public bodies, financial institutions and other Obliged Entities, which, in turn, must require the declaration and/or updating of the beneficial owner as an essential requirement for the acceptance, continuation or resolution of any procedure.

Meanwhile, Article 13 bis, concerning the disclosure of the ultimate beneficial owner of shares held by third parties, provides that any partner, shareholder or member of a commercial company—whether a natural or legal person—who is represented by another person in corporate matters must grant a special power of attorney, which must be registered in advance with the Public Register of Immovable Property and Commercial Affairs in order to be effective vis-à-vis the Nicaraguan company and third parties.

Such a power of attorney must contain, as a minimum, the identification of the principal and the agent, as well as the scope of the powers conferred to exercise corporate rights and fulfil corporate obligations, including participation in general meetings, assemblies, votes and any other act relating to corporate activity.

Once the special power of attorney has been registered, the company shall be obliged to update the relevant information in the Register of Ultimate Beneficiaries of Commercial Companies, attaching as supporting documentation the duly registered power of attorney and any other documentation required by the applicable regulations.

The law expressly provides that failure to register the power of attorney will prevent the registration of those corporate legal acts in which that power of attorney has been used.

In accordance with these new regulations, the Public Register of Immovable Property and Commercial Affairs has begun to require the registration of special powers of attorney granted by shareholders of Nicaraguan companies in favour of the persons who will represent them at General Meetings of Shareholders.

This obligation also applies where the shareholder is a legal person, whether domestic or foreign. Consequently, it will no longer be possible to hold shareholders’ meetings by means of letters of authorisation (proxies) or powers of attorney that have not been previously registered with the Nicaraguan Commercial Register, as was permitted under the previous practice.

In the case of foreign shareholders who do not have a presence or registration in Nicaragua, the Commercial Register has stipulated that the special power of attorney may be registered in the register account of the Nicaraguan company issuing the shares.

To this end, powers of attorney granted abroad must be submitted to the competent Public Register of Immovable Property and Commercial Affairs, duly authenticated and apostilled and, where applicable, accompanied by an official translation into Spanish recorded in a public deed. This procedure must be completed prior to the holding of any General Meeting of Shareholders taking place after the entry into force of Law No. 1282; that is, on 19 June 2026.

ECIJA Nicaragua offers its clients the services of its team of solicitors to provide comprehensive advice on the scope of these reforms, to draft the required special powers of attorney and to arrange for their registration with the Public Register of Immovable and Commercial Property, in order to ensure timely compliance with the new regulations and to avoid any issues arising from the holding and registration of corporate acts.