In the last two decades, Nicaragua has been recovering from its fraught past with increasing speed. The textile, service, touristic, and agricultural industries have grown particularly quickly. A large part of Nicaragua’s growth has been due to a rising amount of foreign direct investment (FDI), encouraged by government policies. In recent years, Nicaragua has had continuous GDP growth, and a large part of this comes from the FDI which reached 12.2% in 2012. This is a large difference from the 4% average across the rest of Central America.
Consequently, Nicaragua has one of the fastest GDP growth rates in Latin America. Part of this is also because it has been one of the Central American countries to fully apply the recommendations and mandates imposed by international regulatory organizations, like the International Monetary Fund. This has also helped them to control their deficit and encourage more FDI. According to the most recently available data from the UN, foreign direct investment in Nicaragua has been steadily on the rise, increasing from about $286 million to $946 million.
One of the best examples of Nicaragua’s efforts at modernizing its laws and economy to appeal to investors, is the relatively new Law 306. This law gives foreign investors the same rights as a domestic investor. It also gives foreign investors benefits and other tax exemptions when importing their valuables. Additionally, it opens up every sector of the Nicaraguan economy to foreign investing, where there used to be rules as to where you could invest.
Buying Property in Nicaragua
In the last twenty years, the real estate market has changed drastically in Nicaragua. Unlike other Central American countries, foreigners are allowed to buy and own property in Nicaragua with open access to credit markets. However, something to look out for is the lack of a clear title for some properties. This includes properties that changed hands during the 1980s. Unresolved property disputes still exist, and this should be a major consideration for investors.
In Nicaragua, the construction, real estate, and tourist industries are among the fastest growing sectors of the economy. Land prices are still low by U.S. standards and good investment opportunities exist throughout the country. There is no need to be deterred from investing in Nicaragua, as long as you secure the services of competent professionals.
What to Avoid
We advise that potential buyers avoid the following features, which have been known to be problematic:
- Agrarian Reform Titles
- Municipal Property
- Supplemental Titles Issued by Court Order