How to Save Thousands on Closing Costs With a Corporation

By Joel Stott-Jess

By Joel Stott-Jess

How can you potentially save tens of thousands on closing costs? (And make your new property more valuable.)

The answer is a Sociedad Anonima, or S.A.

An S.A. is a Nicaraguan holding corporation for your new real estate asset. By purchasing a property held in one of there corporations you can save up to 7% on closing costs. If it’s not yet in one you can place the property into a new corporation to increase its future value.

How does it work?

The purchase process for property in Nicaragua, if you haven’t seen it, is detailed here. Check out that article for the basics.

  • When you buy a property held in a person’s name, and transfer ownership to your name, you pay closing costs. They increase in direct relation to the value of the property. From 4-5% for properties under $50,000 to 7-8% for properties over $200,000.

  • If the property is held in an S.A. corporation, however, these same costs do not apply.

  • For a property held in an S.A. the buyer would purchase all the shares in the corporation from the seller.

  • The buyer then becomes the legal owner of the corporation and it’s asset - the property.

  • The owner of record for the property does not change. It is still the same corporation, now with new ownership.

  • No transfer taxes apply. The only expense is 1 to 1.5% for legal fees.

  • Also the closing process for a property held in an S.A. can also take as little as two days, as opposed to six weeks for a sale with personal names.

The legal fees for purchase of a corporation are normally about 1 to 1.5% of the purchase price of the property. Now compare that to 7-8% for a property over $200,000 held in a personal name. You can see the benefit, can’t you?

The corporation must have at least two owners. One person can own up to 99% of shares. A designee can hold the remaining 1% and relinquish benefits. Often this is a friend or lawyer. In this way a single individual can have complete control. For couples 50/50 splits are perfect.

Unlike other countries theres is no minimum requirement for ownership by a national citizen. Foreigners can own both corporations and land outright in Nicaragua. Its a big plus for investing in Nicaragua.

So how can you take advantage of this?

First you can look for properties already held in corporations. Casa Cornisa below is a great example. It’s been reduced significantly and is already held in a corporation. Casa Vistas is another. Message me and we can chat about more options.

What if the property I want is not yet in a corporation?

You can still benefit in the future. When purchasing a property held in a personal name you can consider opening a corporation, and placing that property in it at closing. While you still will have to pay the closing now, it will not apply on a resale. That makes your property more valuable to a potential buyer in the future.


Say you invest in a property in todays buyers maket for $100k. Your lawyer opens a corporation for you concurrently with the due diligence process. It’s ready at closing. At closing your corporation, and by extension you, become the legal owner fo the property.

In a few years you decide to sell at a price of $200k. Your property is much more valuable than an equivalent property in a personal name. With an estimated total transfer cost of 7.5% your property is actually $15,00 less expensive. You can sell your property for more.

What if the property you want is lower priced?

While you can still take advantage of this, it’s not for every property or buyer. If you are buying a less expensive home like this two unit property for $69,000 it might not be worth it. It costs around $1500 for a corporation.

The corporation is more valuable the more expensive the home is. (That sliding scale of closing costs I mentioned earlier) There are also some small annual costs for an accountant to file papers every year. Likely a couple hundred dollars.

What’s coming in the future?

An important note is that at the time of writing there is a law being debated to increase the transfer tax portion of the closing costs. Currently (May 2019) the transfer tax portion of closing costs maxes out at 4% for properties over $200,000. The new law would make that 5% above $300k, 6% above $400k and 7% above $500k. Total closing costs would thus be around 10% for half million dollar properties. That’s a huge sum. You can see why S.A.’s are only getting more valuable.

Have more questions?

If you’re looking to invest, a corporation is worth considering. Dr. Javier Quinto from the firm of Salazar & Bendana is one of the best lawyers in the country, bilingual and offers free consultations to see whats right for you.

I use him for my transactions, but this isn’t a paid promotion for him. I just like him.

Thanks for reading!

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Joel Stott-Jess

Joel Stott-Jess is an agent with Century 21 / Nica Life Realty in San Juan Del Sur. Originally from Alberta, Canada he has been doing business in Nicaragua since 2014. A serial entrepreneur, surfer, and outdoor enthusiast he is an expert on both the real estate and investment markets in Nicaragua.  

Contact Information:

Joel Stott-Jess

Century 21 / Nica Life Realty

San Juan Del Sur

(+505) 8176 8624

skype: joel.stott.jess

Instagram: jstottjess