A new manufacturing center was opened last week in the tax free zone of Portezuelo Industrial Park, Km. 5.5 Carretera Norte in Managua. Texnica SA and partner Bella Canvas will use the Zona Franca production facility to manufacture clothing for export to the United States of America, Canada and Europe.
When the 8,421 square meter factory is operational in April 2021, a total investment of US $4 million dollars will have been made. About half of that will have been provided by Texnica’s partner Bella+Canvas for machinery and equipment. Both companies have many years of experience in this sector in Nicaragua.
Output for the facility will be in the range of 500 to 600 thousand pieces of clothing per week, mainly T-shirts and jackets.
Téxnica SA will soon be hiring and training new employees, many of which will come through an initiative to train new hires with no previous experience in garment production. http://www.texnica.com/empleos.html
Some facilities in the Zona Franca textile sector have experienced a contraction in the workforce die to the outbreak of the Covid-19 pandemic hitting worldwide sales. However, it’s estimated that the sector provides full time work for about 120 thousand workers, 60% of those being women.
Export Free Zones
Zona Francas or Export Free Zones were stablished under Law 917 (Ley de Zonas Francas de Exportación) to offer tax incentives to businesses wishing to create factories and manufacturing centers in Nicaragua for the export of finished goods from a wide range of activities.
The benefits under the law can apply to the textile, industrial, manufacturing and agricultural sectors as well as many different outsourcing applications; call centers, payroll, accounting, telemarketing, social media marketing, customer support, etc.
Very briefly, exemptions can include a ten year 100% exemption from corporate income tax (with a possible ten year additional period), exemption from taxes on real estate sales as well as capital gains, exemption from taxes and duty relating to the import of raw materials and equipment for the manufacturing of the export products.
