Nicaragua has a series of competitive advantages that makes the country an attractive destination for foreign investment. These advantages include:
- Strategic Location
- A Favorable Business Climate
- A Solid Legal Framework
- A Growing Economy
- One of the Safest Countries of the Region
- Preferential Access to Most Important Markets in the World
- Availability of Skilled and Productive Workforce at Competitive Costs
Nicaragua is strategically located in the heart of the Americas, only two hours by air and three days by sea to ports on both coasts of the United States, Mexico and South America. This makes Nicaragua an excellent place to invest and to do business.
A Favorable Business Climate
Nicaragua has a favorable business climate that allows foreign investors to develop and operate their investment projects calmly and in a good environment. The Doing Business Report 2013-2014, published by the World Bank, which measures several indicators of investment climate in 189 countries, ranked Nicaragua as number one in Central America in terms of enforcing contracts, resolving insolvency and investors protection.
In 2003, the One-Stop Investment Shop opened with the purpose of creating a system that simplifies the procedures relating the establishment, registration and legalization of a company. The main goals are to: lower costs, steps and legal and administrative requirements for incorporating a company in Nicaragua, and develop a mechanism of high quality customer service for the establishment of these corporations.
In June 2009, the One Stop Service Shop for Free Zones opened, which significantly facilitates the management of procedures for companies operating under the free zone regime in Nicaragua.
In April of 2011, the Presidential Delegation for Investment Promotion and Foreign Trade Facilitation was created, which formed an advisory council consisting of 13 Government institutions and 6 private chambers which promotes policies and actions to take to facilitate, attract and encourage private direct investment as well as facilitating foreign trade. This council has been working on initiatives that truly impact the facilitation of processes linked to investment and foreign trade, using as reference the indicators of the Doing Business report, published by the World Bank.
The Government of Nicaragua recognizes the potential of foreign investment to promote economic and social development of a country. Therefore, it actively promotes the establishment of investment in the country, always showing responsible practices towards its workers, the environment and the community where it operates.
The Government of Nicaragua and the private sector, represented by the Superior Council of Private Enterprise (COSEP), works closely together to promote initiatives that encourage the growth of economic activity in the country. For this purpose, an open dialogue is maintained through a series of working committees, which allows effective communication channels for consensus of the decisions that should lead the country on economic issues.
In December 2012, the Government of Nicaragua, private sector representatives and union leaders signed the third edition of "Tripartite Agreement for Job Security and Productive Free Zones". This agreement sets minimum wage increases for the period 2014-2017, providing stability to employees of free zone regime and predictability to investors.
The best indicator of business climate in Nicaragua is the large number of renowned international companies already doing business in our country.
A Solid Legal Framework
Nicaragua has a solid legal framework for investment which provides all the guarantees that investors need for them to operate with confidence in the country.
The Investment Promotion Law (Law 344) provides investors fundamental guarantees such as:
- Free currency convertibility
- Freedom to Expatriate all Capital and Profits: Foreign investors are entitled to transfer funds abroad
- No minimum or maximum investment amount
- Financial access from local banks, according to their terms and conditions of approval
- Full protection of intellectual property rights, patents and brands
- No discriminatory treatment for foreign investors
- Full International Ownership
A Growing Economy
In recent years, Nicaragua has experienced dynamic and sustained economic growth close to 5% annually, driven mainly by the private sector´s confidence and by the policies implemented by the Government to stimulate economic activity. Nicaragua's economy has had a great performance thanks to disciplined management of taxes, financial, monetary and exchange rate policies used by the Government.
One of the Safest Countries of the Region
Nicaragua has one of the highest levels of safety in the Western Hemisphere, which provides confidence to executives and their families re-located in the country for business purposes. Additionally, levels of safety and quality of life that Nicaragua offers have earned publications of international recognition which places Nicaragua as an ideal destination to visit or to retire.
The Economist Intelligence Unit in its 2014 assessment of country risk ranks Nicaragua as one of the safest countries in Central and Latin America.
Preferential Access to Major Markets in the World
|Free Trade Agreements||United States, Mexico, Panama, Taiwan, Dominican Republic, Chile & European Union|
|Central American Common Market||Nicaragua, Guatemala, El Salvador, Honduras & Costa Rica. Additionally, free movement of capital, services and human resources among CA-4 countries.|
|Preferential Access Agreements||Japan (GSP), Norway (GSP), Canada (GSP), Russia (GSP), Switzerland (GSP) & ALADI|
|Solidarity Union Agreements||Venezuela, Ecuador, Bolivia, Cuba, Antigua & Barbuda, Dominica & St. Vicente and the Grenadines|
|Recent Agreements||ALADI (Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela and Cuba)|
|Agreements under Negotiation||Canada, CARICOM|
|Source: Ministry of Development, Industry and Trade (MIFIC, for its acronym in Spanish).|
Through various trade agreements, Nicaragua has managed to obtain preferential access for their exports in key markets in North, Central and South America as well as Europe and Asia. Nicaragua, through its trade agreements, has preferential access to a global market of 1,500 million people.
Availability of a Skilled and Productive Workforce at Competitive Costs
Nicaragua has a skilled workforce ready to be absorbed by foreign investment established in the country. Because of its low turnover rate, fast learning curve and low rates of absenteeism, the Nicaraguan labor force has quickly become one of the most competitive and productive in the region.
The Labor Market Risk, published by the Economist Intelligence Unit in 2014, ranks Nicaragua as the Central American country with lower labor risk after Costa Rica. This report measures several factors such as: power of unions, labor disputes, wage restrictions and restrictions on hiring and firing employees.
Nicaragua's population is very young; in fact 76% of the total population (an estimated 6.1 million in 2014) is under the age of 39 years.
Comparing the minimum wage for the Central American free zone industry, Nicaragua is the most competitive country in the region. This allows investors to establish intensive workforce operations and to be highly profitable.