The Last Straw

“Whew!” I thought, as I watched all my stuff finally get
unpacked, after transporting it home along with my two cars. After our odyssey
getting our stuff past Nicaraguan Customs into Nicaragua (and thousands of
dollars later) I was finally home free and ready to get to work! The first
thing to do was order some equipment for our company, get it incorporated in Nicaragua,
and open a business bank account. In the USA, all this can be done online
pretty easily, and with the ordering of electronic equipment (we needed some IP
equipment for our Internet-based company) generally one can expect to have
their own purchased property delivered with reasonable certainty.

Mind you, there’s nothing wrong with the services of UPS,
FedEx, or the freight and mail forwarding companies in Nicaragua. They do the
best they can, under the circumstances. But the circumstances are pretty
difficult to deal with. Here I was again, dealing with Nicaraguan customs and
their “sticky” hands.

To make a long story short, every time something had to come
through customs, it was guaranteed that the duties on it would be arbitrary,
increase the cost of the item by at least 50%, and it was anyone’s guess
whether we would receive it at all. One example was that we ordered a couple of
unblocked iPhone 4’s from so that we could insert the SIM card from the
Nicaraguan phone company into them (the ones from AT&T can’t be used with a
different SIM card unless you unblock them, and the iPhone 4 at the time was
still too new – no software was yet available to do this.)

Anyway, we got a great deal on the iPhones, had them
shipped, and they were promptly stopped by Nicaraguan customs, who, after
holding them “in inspection” for almost a month, said that the cost on our
invoice was “wrong.” They asked us to provide, as proof of the cost, an
original invoice notarized and authenticated by the Nicaraguan consulate in the
country of origin within 10 days.
WHAT????!!! Explain to me how I was going to contact the vendor in Canada and tell them that the e-mail
invoice was not good enough and that they had to go to a notary with an
invoice, get it to the Nicaraguan consulate in Canada, and mail it to me in
Nicaragua…within 10 days?? Obviously this was a ploy by customs to get more
duties (if they could claim a higher cost, then they would get more taxes.) I
finally just told them to put whatever cost they thought should be on the
invoice, and tax me based on that. It was either that or let them auction my
phones. We ended up paying over $300 in taxes on each iPhone, with no recourse
for disputing the legality of the situation.

I hope that by now, you’re really grasping the importance of
our Constitutional Amendments that deal with property. It is exactly these
rights that prevent the government in the USA from doing to you what other
countries are allowed to do with impunity. Property rights are the bread and
butter of our society, and without them the prosperity of the United States
could never have been possible.  (If you
want to know more about what I’m talking about, Google the term “Boston Tea
Party”)

In Nicaragua, customs is so notorious that the newspapers
cover its shenanigans on almost a constant basis.  I almost laughed myself silly one morning when
the national newspaper ran this title as the lead story on the daily edition –
“The rule of law holds no sway at Customs!!” The goal of the Nicarguan Customs officials
is to either make as much money off of you as possible in taxes, or else keep
your stuff to get auctioned to people that are on the inside.  And don’t think that money or those items go
anywhere but to line the pockets of key officials. Guaranteed. Cars, iPads,
food, wine, phones, TV equipment, books, games, golf clubs, rock
collections(!), and satellite dishes are just a few items that I’ve heard
horror stories about from friends trying to make it work in Nicaragua.

I’ve been picking on Customs to highlight the importance of
property rights, but let’s pick on another entity – the Nicaraguan equivalent
of the Secretary of State in a particular US state – the entities that register
and incorporate new companies. Don’t even ask me to tell you what they are, the
process is so convoluted I couldn’t begin to explain it, and at least 3 different
departments are involved. When we arrived in November, the first thing we did
was to hire an attorney to help us incorporate our Internet-based employment company.
We paid the “expedited” fee (over $2000) to get it done, presumably, in 30 days
or less. Keep in mind that I can open a company in Nevada for less than $500
and have it be ready in a week or less. Or to compare to another Latin American
country, I can pay $1000 in Panama and open it in one day. Nicaragua is a prime
example of what happens when bureaucrats are in charge and not held
accountable. By the end of January, we STILL didn’t have a company. Of course,
no bank would let us open an account without our incorporation papers, so you
can imagine how easy setting up to do business became.

The constant delays, plus the realization that the
government was never going to make things easy for us, plus the additional
realization that should our electronic equipment, unavailable in Nicaragua,
ever need to be replaced, all our business operations would stop while we waited
for Customs to release it, led us to the final decision to incorporate and
operate elsewhere. After all, an Internet business can be operated from
anywhere, and without the energy project to keep us in Nicaragua, there was no
reason for us to stay.

So we were coming back to the USA. Logically, leaving should
have been easy, right? Just pack our stuff and go? By now you realize where the
story is going.

Stay tuned for more…