Digital Nomads & Tax Law

Nicaragua is increasingly attractive to digital nomads due to its lifestyle and, crucially, its tax structure. Nicaragua operates under a "territorial tax system." This generally means that income earned from work performed outside of Nicaragua, for a foreign employer or through foreign clients, is not subject to local income tax. However, the nuance lies in tax residency status and ensuring your activities do not constitute "local source income." This article clarifies the legal distinction between spending money in Nicaragua versus earning it here, helping remote workers remain compliant without overpaying.