A country that is open for business
The Government of Nicaragua seeks to provide a friendly climate for the establishment of new businesses in the country, which is why it provides a series of fundamental guarantees through the Foreign Investment Promotion Law (344), bilateral agreements for the reciprocal protection of investments, and the Mediation and Arbitration Law (540).
Foreign Investment Promotion Law (344)
Free currency convertibility
Freedom to repatriate capital and profits
100% foreign investment capital
Equal treatment for national and foreign investors
Full protection of property rights
Fixed currency devaluation against the US$
In addition to the Foreign Investment Promotion Law, Nicaragua has signed up to 20 bilateral agreements for the reciprocal protection of investments, with several countries in North, Central, and South America, as well as Europe and Asia.
The country has subscribed several treaties for alternative dispute resolution, among these:
- International Center for Settlement of Investment Disputes (ICSID)
- Multilateral Investment Guarantee Agency (MIGA)
- Overseas Private Investment Corporation (OPIC)
- United Nations Commission on International Trade Law (UNCITRAL / New York Convention of 1958)
- Inter-American Convention of Commercial Arbitrage of Panama
Additionally, the Mediation and Arbitration Law (540) governs two alternate methods to the judicial process to solve in an expeditious manner any dispute resulting from contractual relations between private parties.
The establishment of a public-private dialogue system in Nicaragua has been instrumental in developing effective measures to foster economic growth, create jobs, and reduce poverty. Government officials, the private sector and union leaders meet periodically to discuss key issues affecting the business environment, such as the minimum wage for the free zone sector, which reached a tripartite agreement between the Government, the private sector and union leaders, as well as initiatives to improve labor conditions.
This dialogue mechanism has become internationally known as an example that can be followed by other countries and provides confidence to investors, who witness all parties working together towards the same goal.
The Government of Nicaragua recognizes the positive impact of foreign direct investment in an economy such as the one Nicaragua has, and therefore actively and openly promotes it so that the country 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 the 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.
PRONicaragua stood out with the best results among all investment promotion agencies in the world in the 2012 Global Investment Promotion Benchmarking (GIPB), published by the World Bank, International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).
Economic Freedom of the World (EFW) report
Nicaragua’s economy is among the freest of the world according to the recently released Economic Freedom of the World (EFW) report, published by the Fraser Institute. In the 2021 report, the country is ranked in the 82th position out of 165, with a score of 7.04 out of 10.
This annual report measures the economic freedom (levels of personal choice, ability to enter markets, security of privately owned property, rule of law, etc.) by analyzing the policies and institutions of over 160 countries and Hong Kong.