Competitive Operational Costs

The minimum wage established under the free zone regime for 2016 is US$242.36, including fringe benefits.

Before setting up operations in a country, all companies must undertake a very important research and evaluation process, in which operation costs represent an influential role in the final result.

Nicaragua offers one of the most competitive cost structures in the region, enabling companies to increase their competitiveness by reducing operation costs and adding greater value to their products or services. This represents a great advantage for investors, as they aim to improve efficiency in production, maximize profits, and expand profitability.

Minimum Wage

The minimum wage in Nicaragua is characterized as the most competitive at the regional level. Wages in different economic sectors range between US$0.86 to US$1.93 per hour. Fringe benefits represent 49% additional to the minimum wage; these include social security, contribution paid by the employer to the National Institute of Technology (INATEC for its acronym in Spanish), payment of vacations and Christmas bonus, among others.

The following is the minimum wage according to the law in 2017:

Minimum Salary (January 2017)

Sector

Monthly in US$

Hourly in US$

Construction, Financial Establishments and Insurance

402.17

1.93

Electricity, Gas and Water, Commerce, Restaurant and Hotels, Transport, Warehouse and Communications.

329.62

1.58

Mines and Quarry

322.75

1.55

Fishing

273.25

1.31

Community, Social, Domestic and Personal Services

251.93

1.20

Manufacturing Industry

241.64

1.16

Free Zones Regime Industry

250.14

1.20

Central and Municipal Government

224.10

1.07

Micro and Small Craft Industry and National Tourism

193.08

0.92

Agricultural*

179.70

0.86

Source: Ministry of Labor (MITRAB for its acronym in Spanish), valid from March 2017. *Minimum wage plus food.Exchange Rate: 30.05, 2017 average exchange rate. Fringe Benefits are included.

With respect to companies that are under the free zone regime, the minimum wage is the most competitive at the regional level, which makes Nicaragua an ideal country to set up labor-intensive operations.

Note: Include fringe benefits, Nicaragua=100.
Source: Ministry of Labor of each Country, 2017
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Telecommunications costs

In Nicaragua there are several telecommunication companies such as Claro and Movistar, which offer E1 phone service, which is widely used by companies that handle a high level of calls in their operations.

Additionally, they offer plans of advanced digital lines that include services such as call waiting, three-way conferencing, caller ID, voice mail and text messages (SMS). In such schemes the cost per minute for international calls to the U.S. and Canada are approximately USD$ 0.20 / min.

Internet Costs

The main suppliers of business connections in Nicaragua are Claro, Amnet, Navega, IBW, Ideay, among others. They offer various packages of dedicated enterprise data whose approximate average prices can range from USD$70 for a connection of 256 Kbps up to USD$640 by a connection of 3.072 Kbps. We highly recommend contacting the provider of your choice to quote the data package that best suits the needs and requirements of your business.

Water Service Costs

The Nicaraguan Aqueduct and Sewer Enterprise (ENACAL) is the entity responsible in providing the water and sewer service in the country. This company is regulated and controlled by the Nicaraguan Institute of Aqueducts and Sewers (INAA). In Nicaragua, a company whose average monthly consumption is greater than 50 m3 of water will apply to an approximate fee of US$ 0.40 per m3. ENACAL also applies a fee for every m3 consumed to companies with private wells. For more information, visit www.enacal.com.ni

Energy Costs

In Nicaragua, the energy distribution service is provided by DISNORTE-DISSUR, and it is regulated by the Nicaraguan Energy Institute (INE). Industrial companies have the option to choose between power rates with or without time discrimination. For an industrial company with a monthly contracted load above 200 kW and under the category of without time discrimination, the cost per kWh would be USD$ 0.19 approximately. 

Additionally, a company whose minimum requirement is a concentrated load of one megawatt per month, can apply to the category of "Great Consumer", and get a special rate through direct purchase to energy generation enterprises. For more detailed information, visit www.ine.gob.ni