Managua, Nicaragua • 2016

• Information about Nicaragua and business opportunities

• Customized packages of information

• Organization of visits: meetings with companies and institutions

• Assistance with real estate and corporatespace options

• Legal advice• Guide of suppliers of goods and services

• Support and facilitation

• Guidance for thecompletion of government permits

• Facilitation services for exporting companies

• Information about business opportunities in the Caribbean Coast through our regional office PRONiCaribe

PRONicaragua is the Official Investment Promotion Agency of theGovernment of Nicaragua.

ABOUT PRONICARAGUA

Capital ManaguaArea 130,373 km2

Official Language SpanishPopulation 6.2 million

Population Growth 1.0%Population under 39 years 76.1%

Labor Force* 3.2 millionUnemployment* 6.7%

Underemployment 46%Currency Córdoba 

Exchange Rate(2016 Average) C$28.62 = US$1.00

Time Zone UTC/GMT – 6 hoursTemperature Between 20°C and 28°C

Source: Central Bank of Nicaragua. 

COUNTRY PROFILE

Sources: Central Bank of Nicaragua, Ministry of Development, Industry and PRONicaragua. *Estimated data.

Gross Domestic Product US$12,693 million* (4.9% growth vs 2014) 

GDP per capita US$2,027

Exports US$4,897 million 

FDI Inflows US$1,221.7 million*

Gross International Reserves US$2,492 million* (2.35 times the monetary base)

Inflation 3.05%*

Currency Stability 5% annual devaluation vs. US Dollar

2015 ECONOMIC PERSPECTIVE

Destination Travel Time Via

Miami 2.5 hours Air

Atlanta 3.25 hours Air

Houston 3 hours Air

Mexico City 2.5 hours Air

Miami 6 days Sea

Los Angeles 13 days Sea

Ensenada, Mexico 14 days Sea

La Guaira, Venezuela 16 days Sea

Puerto Limon, CR 8 hours (541Km) Land

Puerto Cortes, HN 9 hours (673 Km) Land

Guatemala City 10.5 hours Land

San Salvador 8 hours Land

STRATEGIC LOCATION

Source: Central Bank of Nicaragua.Based on average percentage growth in the last five years. 

Economic ActivityRelation to 2014 GDP  

AverageGrowth

2010‐2014Agriculture, livestock, forestry and fishing 15.1% 2.1%

Trade, hotels and restaurants 14.5% 6.1%

Manufacturing 13.1% 5.7%

Personal, social and business services 12.4% 3.7%

General Government services 9.7% 4.1%

Transport and communication 9.5% 9.2%

Housing 7.2% 2.4%

Financial intermediation 3.5% 4.3%

Construction 2.8% 13.8%

Electricity, gas and water supply 1.8% 4.2%

Mining and quarries 1.6% 14%

ECONOMIC ACTIVITIES

Since 2007, the Government of Nicaragua set out to: Increase generation capacity, Expand coverage, and Go green, as part of its key development strategies

54%

46%

*2015

21%

79%

2017

74%

26%

2007

Source: Nicaraguan Energy Institute INE (for its acronym in Spanish); Ministry of Energy and Mines (MEM, for its acronym in Spanish), . *Estimated data

Installed Capacity: 1,346 MWInstalled Capacity: 819 MW Expected Capacity: 1, 666 MW

Nicaragua has expanded its power supply from 54% in 2007 to 85% in 2015. It is estimated that Nicaragua will reach a 90% coverage by 2017.  

DEVELOPING THE ENERGY SECTOR

Thermal Renevable Energy

Source: Central Bank of Nicaragua, Ministry of Development, Industry and Trade and PRONicaragua. *Projections

Projections for 2015 indicate that Nicaragua’s FDI inflows will have reached approximately US$1.2 billion, thus representing a decrease of approximately 15% versus 2014.

GROWING IN FDI INFLOWS

282 382 

626 

434 508 

936 

1,243 1,355 

1,449 

1,222 

 ‐

 200

 400

 600

 800

 1,000

 1,200

 1,400

 1,600

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*

US$ M

illion

18% annual compound growth rate

It is estimated that 2015 exports will show a performance similar to that of 2014.

Source: Central Bank of Nicaragua. 

EXPANDING EXPORTS

1,9462,468

2,736 2,625

3,425

4,293

5,0054,744

5,1434,839

0

1,000

2,000

3,000

4,000

5,000

6,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

US$ M

Illion

11 % compound annual growth rate

Source: Ministry of Development, Industry and Trade (MIFIC). October 2015

Main Export Products

• Textile and Apparel (26.7%)

• Automotive Harnesses (11.5%)

• Bovine meat (9.2%)

• Coffee (9.2%)

• Gold (6.4%)

• Cigars and Tobacco (4.4%)

• Dairy Products (4.0%)

• Sugar (3.2%)

• Shrimp (2.7%)

• Peanut (2.2%)

2015 MAIN EXPORT PRODUCTS

Agreements Countries 

Free Trade Agreements  United States, Mexico, Panama, Taiwan, DominicanRepublic, Chile & European Union

Central American Common Market

Nicaragua, Guatemala, El Salvador, Honduras & CostaRica. Additionally, free movement of capital, servicesand human resources among CA‐4 countries.

Generalized System of Preferences Japan, Norway, Canada, Russia and Switzerland.

ALBA agreement Venezuela, Ecuador, Bolivia, Cuba, Antigua & Barbuda,Dominica, and St. Vicente and the Grenadines

Agreements under Negotiation

South Korea, Canada, Peru, Bolivia.ALADI (Argentina, Bolivia, Brazil, Chile, Colombia,Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela yCuba)

Nicaragua constantly seeks to increase its access to the world’s most important markets in order to consolidate itself as the ideal export platform.

Source: Ministry of Development, Industry and Trade (MIFIC).

MARKET ACCESS

Source: Economist Intelligence Unit , 2015 Security Risk Report.Source: Commission of Police Chiefs and Directors of C.A, Mexico, the Caribbean and Colombia.

Nicaragua´s high levels of public safety have earned it a recognition of being one of the safest countries in the region

Nicaragua´s high levels of public safety have earned it a recognition of being one of the safest countries in the region

18

29 32

5054

64 6468

0

10

20

30

40

50

60

70

80

2015 Security Risk Index

In 2014, Nicaragua ranked as the third most pacific country in the Central American andCaribbean region in the Global Peace Index, published by the Institute for Economics andPeace. The report measures factors such as the level of safety in society, the level ofinternational conflicts and the level of militarization.

8 9.516

31

66 68.6

01020304050607080

Nicaragua Costa Rica Panamá Guatemala Honduras El Salvador

2014 Homicide Rate(per every 100,000 inhabitants)

SAFETY INDICATORS

Nicaragua is the Central American country with the lowest labor risk after ‐ Costa Rica. This index measures various indicators such as: strength of unions, labor disputes, wage restrictions and hiring and 

firing regulations.

Nicaragua: Among the most reliable labor markets in the region.

Source: Viewswire.com, Economist Intelligence Unit. Note: 100 = More Risky.

3236 39

4650 50

54 57 57 57 5761

64 64 64 6468

82

0

10

20

30

40

50

60

70

80

90

2015 LABOR MARKET RISK

2016 MINIMUM WAGE

Sector Monthly inUS$

Hourly in US$

Agricultural 172.8 0.83

Fishing 262.8 1.26

Mines and Quarry 310.4 1.49

Manufacturing Industry 232.4 1.11

Free Zones Regime Industry 242.4 1.16

Micro and Small Craft Industry and National Tourism 186.6 0.89

Electricity, Gas and Water, Commerce, Restaurants and Hotels, Transport, Warehouse and Communications 317.0 1.52

Construction, Financial Establishments and Insurance 386.8 1.85

Community, Social, Domestic and Personal Services  242.3 1.16

Central and Municipal Government  215.5 1.03

*Salaries include fringe benefits (48.5%). Average exchange rate for 2016: C$28.62 = US$1.Source: Ministry of Labor of Nicaragua (MITRAB, for its acronym in Spanish). 

Sources: Technological Institute (INATEC for its acronym in Spanish), and studies of PRONicaragua.

173,000students enrolled in 49 universities 

295,885students in 17 areas of technical 

training courses 

30,793students in 16 

different technical careers

10bilingual high schools and 19 language centers

5bilingual college programs with more than 20,000 

enrolled students

BUILDING A SOLID EDUCATION FOUNDATION

29%

21%

9%

11%

7%

24%

2014 University Enrollment

Economy and Business

Engineering and Architecture

Political Science and Law

Medical Science

Agricultural

Other Areas of Study

The Foreign Investment Promotion Law (344) offers investors fundamental guarantees such as:

• Full currency convertibility

• Freedom to expatriate all capital and profits

• Full international ownership

• No discriminatory treatment for foreign investors

• Full protection of intellectual property rights, patents, and brands

Additionally, the Mediation and Arbitration Law (540) governs two alternative methods to thejudicial process to expeditiously solve any disputes resulting from contractual relations betweenprivate parties.

LEGAL FRAMEWORK FOR FOREIGN INVESTMENT

Taiwan (1992) Korea (2000)

Spain (1994) Netherlands (2000)

Denmark (1995) Czech Republic (2002)

USA (1995) Dominican Republic (2002)

Germany (1996) Finland (2003)

United Kingdom (1996) Italy (2005)

Chile (1996) Belgium and Luxembourg (BLEU) (2005)

France (1998) Guatemala (2006)

Argentina (1998) Honduras (2006)

Switzerland (1998) Costa Rica (2006)

Mexico (1998) Panama (2009)

El Salvador (1999) Russia (2012)

Sweden (1999) European Union (2012)

Source: Ministry of Development, Industry and Trade (MIFIC).

Bilateral Investment Treaties & Investor Protection Mechanisms:

• International Center for Settlement of InvestmentDisputes (ICSID)

• Multilateral Investment Guarantee Agency (MIGA)

• Overseas Private Investment Corporation (OPIC)

• United Nations Commission on International TradeLaw (UNCITRAL/NY Convention of 1958)

• Inter‐American Convention of CommercialArbitrage of Panama

These agreements include: fair and equitable treatment, full protection and security, no discrimination, national treatment, property protection, dispute resolution, etc.

INVESTMENT PROTECTION & PROMOTION

Meetings between the Government of Nicaragua, the private sector and workers with theobjective of:

• Promoting economic development

• Creation of new Jobs

• Reduction of poverty

Governing body chaired by the President of the Republic, made up of government officialsand the business sector, to follow up the agreements and promote a better workingrelationship.

Model of dialogue, alliance and consensus has been embodied in Article 101 of the Political Constitution of 

Nicaragua. 

A Tripartite Agreement between the government, private sector and union 

leaders to 1) Define annual increments on minimum wage in Free Zones, and 2) Agree on long‐term CSR 

strategies.

Reaching consensus with Superior Counsel of the 

Private Enterprise (COSEP) for the passing of more than 

100 laws.

MODEL OF DIALOGUE AND CONSENSUS

“Industry experts are calling Nicaragua the hottest destination in Central America, and oneof its best bargains. It’s a land of rich biodiversity, with volcanic peaks, rain forests, beaches,and nature reserves. [...] the country is throwing out the welcome mat to foreign visitors,investing in infrastructure and facilities.”

:Where to go in 2015

Nicaragua:The ideal place to live

• Breathtaking natural beauty

• Pleasant climate year‐round

• A rich cultural heritage

• High levels of personal safety

• Affordable living costs

• Excellent quality of life

INVESTMENT OPPORTUNITIESKEY ECONOMIC SECTORS

Agribusiness

Source: Central Bank of Nicaragua, Ministry of Development, Industry and Trade (MIFIC for its acronym in Spanish) .

20% of Gross DomesticProduct (GDP)

39%of total exports

31%of the EconomicallyActive Population

Main Agro – Export Products

Bovine meat (9.2%) Shrimp (2.7%)

Coffee (9.2%) Peanuts (2.2%)

Tobacco and Cigars (4.4%) Edible oil (1.8%)

Dairy Products (4.0%) Beans (1.6%)

Sugar (3.2%) Lobster (1.4%)

SECTOR OVERVIEW

*Salaries include fringe benefits (48.5%). Average exchange rate for 2016: C$28.62 = US$1.Source: Ministry of Labor of Nicaragua (MITRAB, for its acronym in Spanish). 

• Vast availability of human resources.

• 4.9 million hectares of land suitable for agriculture, of whichonly 1 million are being used.

• Competitive land costs.

• Ideal climate for a variety of crops.

• Abundant water resources.

• Fiscal benefits for agricultural, forestry, fishing and industrialactivities.

2016 MinimumWage by Law (in US$)

Agricultural Sector Free Zones Regime

Monthly Salary 172.8 242.4

Hourly Salary 0.83 1.16

BENEFITS FOR THE SECTOR

Agroexport products• Coffee, okra, fruits, cassava, tubers, ornamentals, among others

Aquaculture• Shrimp, lobsters and fish

Dairy and livestock• Processed milk (dairy products and powder milk) and meat

Food industry• Processed foods (snacks, cookies, sweets and confectionary)• Grains and milled products

Forestry• Forest plantations of commercially valuable timber• Carbon credits

Companies Doing Business in Nicaragua:

INVESTMENT OPPORTUNITIES

Success Story: Ball Horticultural

ProductsOrnamental plants cuttings

MarketsUSA and Europe

ProcessesProduction of plant cuttings under hydroponic system

LocationDepartment of Esteli

“The corporation analyzed various countries before deciding to invest in Nicaragua, and some factors that came to our attention and encouraged our decision to invest in this 

country were its investment climate, legal securities, weather of Estelí, citizen safety and the high productivity of the Nicaraguan labor force.” 

Roberto Lara, Special Projects Manager for Ball Horticultural

Local Name Las Limas S.A.

Origin USA

Investment  US$15 million

Beginning of Operations October 2011

Employees 900 approx.

Industrial Space 164,000 m2

Footwear and Apparel

• By the end of 2015, footwear and apparel companies generated 66,536 direct jobs and199,608 indirect jobs.

• The United States and South Korea represent the major investment sources in the apparelmanufacturing industry. The footwear industry is led by a Brazilian company investments.

• Apparel exports from Nicaragua to the United States by December 2015:

• By value: US$1,466.92 million

• By volume: 485.38 million SME

• Apparel production in Nicaragua: 80% knit garments and 20% woven garments.

• Footwear production in Nicaragua: cattle and goat leather footwear (loafers and high heels), synthetic sandals, rubber boots and safety boots for construction.

Sources: Office of Textiles and Apparel (OTEXA), U.S. Department of Commerce and National Free Zones Commission of Nicaragua (CNZF). 

In 2015, Nicaragua remained the 11th largest worldwide apparel supplier to the United States, by volume  and 12th by value.

SECTOR OVERVIEW

Apparel Industry• Denim and twill bottoms• Shapewear, girdles• Knit tops and bottoms• Workwear• Sports uniforms and activewear

Footwear Industry• Footwear with leather uppers• Functional boots for industrial protection or 

outdoor activities• Components and accessories production for the 

footwear industry

There is an agreement between the government, the private sector and union leaders that establishes minimum wage increases in the free zone sector through 2017. This agreement 

provides predictability to potential investors on labor costs in the long term.

Minimum Wage (in US$) including Fringe Benefits 2015 2016 2017

Monthly 234.88  242.36  248.48 

Hourly 1.13  1.16 1.19 

*Fringe benefits included(48.5% of compensation). Average Exchange rate 2016: C$28.62 = US$1.Source: Central Bank of Nicaragua and Ministry of Labor (MITRAB for its acronym in Spanish). 

SECTOR OVERVIEW

Production of fabric to complement the apparel industry value chain:• Knit fabric (cotton and synthetic)• Twill and other woven fabrics

Attractive DR‐CAFTA provisions for apparel production:• Denim and twill garments• Sports uniforms and activewear• Boxers, brassieres, jackets, woven pajamas, woven shirts, babywear, etc. all benefit from

Single Transformation• Medical apparel, uniforms, imagewear• Manufacturing of leather footwear and related accessories. Flexibility of sourcing raw

materials from any country, assemble in Nicaragua and still enjoy duty‐free status whenaccessing the United States.

Trims:• Buttons• Zippers• Elastic bands• Pocket bags

Companies doing business in Nicaragua:

INVESTMENT OPPORTUNITIES

Success Story: Aniger

Local Name Tecshoes Latinoamérica

Origin Brazil

Investment US$6 million

Beginning of Operations November 2011

Employees 700

Industrial Space 11,000 m2

ProductionLeather footwear for ladies

MarketsUSA and Europe (Clarks)

ProcessesCut, assembly

LocationTipitapa (east of Managua)

“With respect to some of our fixed costs, we consider that Nicaragua is the most competitive country in the region. That, coupled with the ability to forecast/project/estimate labor costs in 4 to 5 year periods 

with certainty, helped us make the decision to come and invest in Nicaragua.”

‐Mariano López, Administrative Manager, Latinoamérica

Light Manufacturing

Nicaragua’s auto‐wire harness industry in 2015:

Exports: U$580 million

• 22.4% of the national free zones regime’s exports

• Approximately 11.5% of the country’s total exports*

Jobs: 13,114

• 13.4% of all jobs under the national free zones regime

Clients: Ford, General Motors, Chrysler, BMW and Volkswagen

Source: National Free Zones Commission, 2014. *Estimated Data

Companies doing business in Nicaragua:

SECTOR OVERVIEW

Auto‐wire harness exports experienced a compound annual growth rate of 17% from 2006 to 2015.

Source: National Free Zones Commission. Estimated data

145.1

270.3 268.1

172.6

313.1

393.2

474.0 

575.3  564.9  580.7

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*

US$ M

illion

Automotive Harnesses Exports

SECTOR OVERVIEW

Nicaragua offers a series of investment opportunities in the light manufacturing sector, mainly the following subsectors:

• Automotive parts and accessories‐ Floor mats and liners‐ Seat covers‐ Harnesses

• Labor‐intensive products

INVESTMENT OPPORTUNITIES

Origin Germany

Investment US$22 million

Beginning of Operations 2009

Employees 2,000 at full capacity

Industrial Space 16,000 m2

"The new plant in Nicaragua will not be an investment for short‐term success. We have gained excellent projects which require us to increase the capacity we have in the region, and this 

drew our way to Nicaragua." 

‐ Stefan Bude, President and Chief Financial Officer of DAA Dräxlmaier Automotive of America LLC 

Success Story: Dräxlmaier

ProductionAuto‐wire harnesses

MarketsUnited States, Mexico

ProcessesDoor harnesses assembly

LocationNindirí, Masaya (south of Managua)

Outsourcing Services

• Jobs in 2003: 12• Jobs in 2015: More than 6,000

• FDI since 2007: more than US$ 84 million• More than 40 outsourcing companies are exporting a wide

range of services to the US, Europe and Latin America

SECTOR OVERVIEW

Average Salaries BPO

Position Average Monthly SalaryUS$

Operations Manager 1,600

Supervisor 825

Bilingual Agent 554

Spanish Agent 350

Average Salaries ITO

Position Average MonthlySalary US$

Sr Software Developer 1,000

System Analyst 995

Software Developer 768

Jr Software Developer 571

Business Process Outsourcing (BPO)• Contact Centers• Collections• Shared Services Center

Knowledge Process Outsourcing (KPO)• Patent Design & Development• Architectural Services• Recruitment & Payroll Management

Information Technology Outsourcing (ITO)• Software Development• Mobile & Web Applications Development• Animation 2D/3D

Source: PRONicaragua  Outsourcing Survey 2014 

INVESTMENT OPPORTUNITIES

Companies Doing Business in Nicaragua

Multinational Telecommunications Carriers

Success Story: Rain

Rain is a full‐service digitalagency that decided to invest inManagua, Nicaragua in June2013 due to the country’s goodinvestment incentives, strategicgeographic location, andhardworking labor force withlow absenteeism rates and highlevels of personal safety.

Origin: United States

Investment:  US$250,000

Start of Operations: 2013

Employees: 10

Location: Managua

“Nicaragua is a country with all the resources we require to operate a business”  ‐ Steve Hansen, General Manager of Rain

FISCAL INCENTIVES FOR INVESTMENTS

Tax Concertation Law (822) Tax Benefits to Exporters

• 0% rate of Value Added Tax (IVA).

• Exports of goods are taxed at 0% of the Selective Consumption Tax (ISC).

• A tax credit to the advance payments or annual Income Tax of tax administration in an amount equal to 1.5% of FOB value of exports.

Tax Benefits to Agricultural Producers

• Article 127 presents a list of transfers that are exempt of transferring the Value Added Tax

• Exemption of Value Added Tax and Selective Consumption Tax, for transfers of raw materials, intermediate goods, capital goods, spares, parts and accessories.

Tax Benefits to Forestry Sector

• Plantations registered on the regulatory entity will be exempted from paying 50% of Municipal Tax on Incomes (IMI) and 50% exemption on profits arising from the exploitation.

• Exemption from Property Tax (IBI).

• Exemption from payment of duties and taxes on imports to companies of secondary and tertiary processing.

FISCAL INCENTIVES

Temporary Admissions SystemA tax system that allows both the entry of goods into the national customs territory and localpurchase of goods without payment of any duties and taxes. Companies that export directly orindirectly, at least 25% of its total sales and an export value not less than US$50,000, are eligiblefor this scheme.

Goods qualifying under this regime are:

• Intermediate goods and raw materials

• Capital goods directly involved in the production process

• Materials and equipment that will be required for the production process

Free Zones Incentives Law (Decree 46‐91)

Generous fiscal incentives for the Free Zone Regime

• 100% income tax exemption1

• 100% exemption on import taxes formachinery, equipment, and raw materials

• 100% municipal tax exemption• 100% sales tax exemption• 100% capital and property tax

exemptions

FISCAL INCENTIVES

1Valid for 10 years with the possibility to be extended once with previous authorization.

NICARAGUA´S VALUE PROPOSAL

A Competitive Cost StructureLow labor costs+ generous fiscal incentives+ FTA with main international markets

High degree of social cohesion resulting from dialogue between the 

Government, the private sector and workers.

Pro ‐ business government that 

understands the value of foreign investment and supports their successful 

development.

High levels of personal security and great quality of life. 

millonesUS$520Total Investment:

Million

INVESTMENT PROJECTS 2015