FAQs


1. What is the Government of Nicaragua’s stand on foreign direct investment?

The Government of Nicaragua recognizes the positive impact of foreign direct investment (FDI) in an economy such as Nicaragua's and therefore actively and openly promotes it in a country that is responsible with its employees, the community and the environment.

Proof of this is the existence of PRONicaragua, the official investment promotion agency of the country, which has full support of and works alongside the government. Additionally, the naming of a Presidential Delegate for Investments to coordinate investment promotion efforts and ensure the successful development of these projects, further affirms the government’s positive stand towards FDI.

2. What service does PRONicaragua provide to investors?

PRONicaragua offers complimentary support services to qualified investors interested in exploring business opportunities in Nicaragua. These services include:

  • Complete and relevant information on business opportunities in Nicaragua through tailor-made packages.
  • Arrangement of country visits to meet with institutions and key companies of the sector of interest.
  • Facilitation services throughout the entire investment process, providing contacts and guidance.
  • Assistance in finding local companies to establish joint ventures and identifying suppliers and other forms of business alliances.
  • Assistance with identifying the ideal real estate option for your project and support with legal audits.
  • Aftercare services to offer solutions to the main problems affecting the development of businesses.

3. What legal guarantees does Nicaragua offer investors?

The main legislation that governs foreign investment is the Foreign Investment Promotion Law (344) and its bylaws. This law provides: a) equal treatment of foreign and domestic investment; b) eliminates restrictions on the way in which foreign capital can enter the country, and c) recognizes the foreign investor's right to own and use property without limitation, and in the case of a declaration of eminent domain, to receive proper indemnification. The law makes no distinction between acquisition, merger, takeover, or green-field investment.

Additionally, the Mediation and Arbitration Law (540) governs two alternate methods to the judicial process to expeditiously solve any dispute resulting from contractual relations between private parties.

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4. Does the government offer incentives to investment projects?

The Government of Nicaragua offers a series of investment incentives in priority sectors of the economy, such as:

  • Tourism
  • Renewable Energy Generation
  • Agribusiness & Forestry
  • Social Housing
  • Export-oriented activities:
    • Textiles & Apparel
    • Manufacturing & Assembly
    • Business Process Outsourcing

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5. What are Nicaragua’s main export products?

Nicaragua has been a traditionally agricultural country; therefore most of its main export products are from this sector, which include: meat, coffee, fishery products, sugar and dairy products. Gold has also become one of Nicaragua’s major export products.

It is also noteworthy to mention that in addition to traditionally exported products which consist mainly of raw materials, there’s been a slight shift towards production and exports of goods with higher value added in the country in recent years. Products such as processed fruits, frozen vegetables as well as jams and spreads already have presence and compete successfully in leading markets. Likewise, industries such as footwear, tobacco, and beverages are among the country´s most promising in terms of growth and recognition by international markets.

Within the free zone regime, the main export products include apparel, auto wire harnesses and agricultural products. The service sector within the free zone regime has become an emerging force in Nicaragua, offering diversified and higher value added services such as Business Process Outsourcing (BPO), Knowledge Process Outsourcing (KPO), and Information Technology Outsourcing (ITO).

6. What kind of trade agreements does Nicaragua have?

Nicaragua has free trade agreements with the United States, Mexico, Panama, Taiwan, Dominican Republic, Chile and the European Union. Additionally, the country is currently negotiating free trade agreements with Ecuador, Canada, CARICOM and Cuba.

Furthermore, the country enjoys preferential access agreements to key markets in Central America, the Caribbean and South America. In total, Nicaragua has preferential access to a worldwide market of over 1.5 billion people.

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7. What is the minimum wage in Nicaragua’s free zone regime?

Since 2009, the Government of Nicaragua, union leaders and the private sector, have agreed the annual minimum wage adjustments under the free zone regime in an effort to foster the growth of the industry by providing predictability to companies and employees. This consensual effort, named the Tripartite Agreement, establishes the rates of minimum wage increase in advance for subsequent years; in 2012 it was renewed for a third time.

By virtue of the last agreement, it was established an inter-annual growth rate for the free zone regime of 8 percent in cordobas (equivalent to 2.9 percent in dollars) for the period between 2013 and 2017.

               Tripartite Agreement – Minimum Wage in the free zone regime 2014-2017                 

 

2014

2015

2016

2017

Fully-loaded monthly wage

US$226.8

US$233.3

US$239.9

US$246.8

Fully-loaded hourly wage

US$1.09

US$1.12

US$1.15

US$1.18

 

8. How large is Nicaragua’s labor force?

The Nicaraguan workforce is young and dynamic, as 76 percent of the population is under the age of 39 and the labor force, comprised of 3.2 million people, is known to be flexible and highly productive, with good working habits and fast learning skills. These qualities have allowed Nicaragua to position itself as one of the most competitive and productive in the region in terms of human capital.

The Economist Intelligence Unit, in its 2014 Labor Market Risk Index, ranks Nicaragua as the second country in Central America with more stability in its labor market, due to low levels of absenteeism and turn over reported by firms.

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9. What kind of labor shifts are allowed under the Nicaraguan Labor Code?

The Nicaraguan Labor Code recognizes 4 types of labor shifts:

Day shift: Work undertaken between 6 a.m and 8 p.m. is considered a day shift. Regular day shift hours are 8 working hours daily for a 48-hour work week. Additional work must be compensated as overtime.
Night shifts: Work undertaken between 8 p.m. and 6 a.m. is considered a night shift. Regular night shift hours are 7 working hours daily for a 42-hour work week. Additional work must be compensated as overtime.
Combination day-night shifts: A combined work shift is 7.5 hours per day for a 45-hour work week. Additional work must be compensated as overtime.
Overtime: Work outside regular working hours is always considered overtime. According to the National Labor Code, overtime is paid double the amount stipulated for regular working hours. A maximum of 3 hours beyond regular hours may be worked, not exceeding a total of 9 hours per week.

10. How long does it take to set up a new company in Nicaragua?

The process of registering a company in Nicaragua can be fast tracked by using the services provided by the Investment One-Stop Shop (VUI, for its acronym in Spanish). The office, which gathers the main government institutions involved in the process, provides top-quality services free of charge for investors, reducing the registration time to approximately 13 days.

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