Nicaragua: An Overview

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Profile | Weather | Economy | Land of Opportunity | Development | Selling Points

Profile

Nicaragua, a land of lakes and volcanoes, is the largest yet most sparsely populated of the Central American nations, with a population just over 5.5 million. Nicaragua borders Honduras to the north and Costa Rica to the south and is slightly larger than New York. Its topography includes a mountainous region to the west, two vast lakes, Nicaragua, the largest freshwater lake in Central America, and Lake Managua, which are connected by the Tipitapa River. The Pacific coast is volcanic and very fertile, which lends itself to an abundant supply of agricultural exports, while the marshy Caribbean coast is known as the "Mosquito Coast."

Nicaragua has some of the most spectacular beaches in Central America. It is also home to the colonial city of Granada, purportedly the oldest in the Americas, and the remarkable crater lake Apoyo, recommended for accreditation as a World Heritage site.

According to ProNicaragua.org, in 2006 Nicaragua increased its Foreign Direct Investment inflows by more than 18% to $282 million and grew its total exports by over 27%. A report by International Development Systems Inc. (IDS) revealed that Nicaragua was second only to China in terms of growth in garment exports to the United States in 2006. Overall, exports from this sector have increased by almost 44% between 2004 and late 2006.

This significant increase in foreign investment and exports growth bears witness to the great advantages offered by Nicaragua to foreign investors, i.e. its strategic geographic location, a favorable investment climate, highly competitive costs, and a productive labor force. Furthermore, on-going reforms of the judicial system and administrative procedures are expected to continue to improve the business climate and help attract increasing amounts of foreign investment into Nicaragua.

Nicaragua has always been primarily an agricultural country, but construction, mining, fisheries, and general commerce also have been expanding during the last few years, as well as the tourism industry. International visitors to Nicaragua reached nearly 900,000 for 2006, with tourist spending reaching $230.6 million, a 25% increase from 2005. Tourism is currently growing at 19% annually and is contributing more than any other single industry in Nicaragua's $5 billion economy. By 2007, it is projected that more than one million visitors will arrive in Nicaragua.

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Weather

Nicaragua has a tropical climate with two seasons—a wet season from May to January and a dry season from January to mid-May. Average annual rainfall in the capital of Managua is 35 inches and average temperature ranges are from 68 F (20 C) to 93 F (44 C) throughout the year. More Info >>

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Economy

Nicaragua still remains one of the world’s poorest countries. Having survived governmental instability and natural calamities during the 1980s, the country was on its way to rebuilding its economy during the 1990s, but was forced back again by the devastating Hurricane Mitch in 1998.

As a result of years of economic liberalization, and the implementation of policies intended to stimulate national and foreign investment, Nicaragua is now one of the most dynamic economies in Central America, due in large part to a substantial increase in private investment and exports.

Nicaragua received a tremendous show of support from the international community in 2004 when the IMF and World Bank forgave $4.5 billion of the country’s debt. According to ProNicaragua.com, since the Tourism Incentive Law was passed, this sector has become a significant factor in the Nicaraguan economy. Approximately 300 projects have benefited from this law. Income from tourism has risen more than 300% over the past ten years and the sector captured $230.6 million in 2006, thus becoming the main source of income for the country. Projections for 2007 are expected to exceed $200 million. Nicaragua’s GDP was estimated to reach $16.8 billion for 2006, a 4% increase and the highest of any of its Central American neighbors. In October 2005, Nicaragua ratified the US-Central America Free Trade Agreement (CAFTA), which provides an opportunity for Nicaragua to attract investment, create more jobs and increase economic development.

Prior to the November 2006 presidential elections, all of the political parties stressed their commitment to continuing the country's upward trend in tourism and support of internal investment. Nicaraguan exports have increased 18% during the first three quarters of 2007, compared to the same period in 2006. The country is on track to finish the year with a record high $1.2 billion in total exports according to Cetrex, the nation’s export processing center.

According to a September 2006 report from World Bank, Nicaragua is now the country with the best conditions for business and attracting foreign investments in Central America. The World Bank's international ranking placed Nicaragua at number 67 among the 175 evaluated countries. A high ranking is indicative of a favorable regulatory environment that's conducive to the operation of business. Additional factors exclusive to Nicaragua include a reduced property transfer tax from 4% to 1% of the value of the property and improved conditions for obtaining credit and trading across borders.

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Land of Opportunity

Nicaragua is an emerging market with a solid economy supported by over two decades of democracy, rising multinational investment and steady growth in tourism. Nicaragua offers forward thinking investors exciting opportunities that are no longer available in neighboring countries such as Mexico and Costa Rica. Tourism continues to rise significantly while real estate also continues to enjoy healthy growth. Multinational corporations are investing largely in Nicaragua and little by little media attention.

For investors, an emerging market such as Nicaragua offers a brief window of opportunity to realize exceptionally high returns. Costa Rica was in a similar position as Nicaragua 15 years ago and today, prices for similar investments have skyrocketed. Nicaragua is now being compared to yesterday's Costa Rica--and why not, they're neighboring countries that share the same prized coast land--and future projections are for Nicaragua to meet or exceed the demand enjoyed by CR up till now. In Nicaragua, foreign investors benefit from lower risk than its neighbors due to favorable business and ownership laws, and investor-friendly government.

2007 proved to be a significant year in Nicaraguan history. The reelection of Daniel Ortega as Nicaragua’s president initially gave reason for pause—and observation. Shortly after though, the Ortega administration made it clear that they recognized the value of – and actively supported – international investment and tourism, reduction of poverty and improvements to infrastructure.

The increased investment from U.S. and Canadian developers, relatively affordable land opportunities (many of which offer ocean views and/or access) and the committed aid from countries around the world are excellent indicators that Nicaragua will follow the path that Costa Rica and Panama have taken. Of course, no one has a crystal ball, but the signs are certainly there.   -Rancho Santana

Words like "misunderstood" and "undiscovered" are often bandied about in editorial pieces and promotional literature about Nicaragua, pointing out often misguided perceptions of the general public that this is the same distressed country of 25 years ago. It is still beleaguered by the aftereffects of a troublesome past, but it certainly has moved beyond those turbulent times when political turmoil and natural disaster drove the country into a decade and a half of disrepair. It’s an uphill climb to be sure, but such is synonymous with these entities known as "emerging markets."

What does this mean to visitors and potential investors?

Lower comparative costs with most of the rest of the world for starters. So long as this country is embraced and accepted by the few and retains an air of skepticism by the many will there be this extraordinary buying opportunity, whether it’s for retirement, seasonal relocation, business, or the like, you simply cannot compare it to the already developed markets nor discount its ability to become one in due time. And that’s when the savvy investor will really reap the rewards.

The bulk of foreign investment into the country’s real estate and tourism sectors is focused on the southwestern corner of the country, which boasts a dramatic geography and comfortable climate…not to mention an appealing surf break. Often compared as becoming the next Costa Rica, it shares the same unspoiled and magnificent coastlines as its neighbor and is expected to meet or likely exceed the expectations stemming from such a favorable comparison. Prices in Nicaragua are still very inexpensive, yet as the economy continues to strengthen, it won't be long before substantial rises in value are seen for many of the prime coastal locations along the way.

“No one is going to allow seizure of property, big or small. We need to eradicate poverty, but you don’t do that by getting rid of investment and those who have resources.” -Daniel Ortega

Right now, those prepared to invest the time researching opportunities, will be able to lock in great prices. Yes, Daniel Ortega is back in power, but with a new vision. He continues to receive promises of financial aid from all sides of the political spectrum and trade with the US continues to grow on the back of CAFTA.

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Development on the Pacific Coast

Nicaraguan coastal developing is moving at an accelerated pace. A number of projects are underway touting tantalizing dream homes in exclusive communities only minutes from the beach. This growing movement has drawn favorable comparisons to the Costa Rica that existed more than a decade ago when it too was awakening from a stifling slumber of its own troubled past and beach properties could be had at a fraction of what they command today. It’s not surprising then that many believe that Nicaragua, offering the more affordable alternative next door, will ultimately overtake Costa Rica as the settlement of choice along the Pacific with the thriving expatriate communities and million dollar homesteads.

While speculation was a factor in the earlier days, where a take the money and run objective lie at the core, today investing in Nicaragua's oceanfront property is much more about community building where beautiful living areas emerge along the coast providing plenty of R&R for visitors and potential residents. Development will continue and as it does, a beneficial side-effect will occur by way of new highway construction, newly paved roadways, tourist infrastructure and small business will help sustain the local environment while catering to the needs of the newest arrivals.

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Selling Points

Nicaragua is very inexpensive compared with the rest of the world and features beautiful coastal settings, exemplary topography, temperate year-round climate, and relaxed lifestyle…to say nothing of the generous tax breaks provided by the government for new businesses. Strategically located between both coasts, Nicaragua is small by American standards, but offers plenty of natural resources and governmental incentives to welcome foreign investment.

The Government passed Law 306 that includes provisions exempting qualified investors from paying income or property taxes for up to 10 years, and providing generous exemptions from import duties for "pensioners" and investors that qualify.

Everywhere you look there are signs of progress—newly constructed highways, re-paved roads, world-class hotels, state-of-the-art shopping plazas, new international franchises. And Nicaragua’s not just an attractive place for business; the number of foreign visitors to Nicaragua is expected to approach 1,000,000 by the end of 2006, exceed this figure in 2007, and it is estimated that more than 5,000 U.S. citizens currently reside there. What many probably don’t know yet is that Nicaragua is also the safest country in Central America.

For anyone interested in investing or starting a business in Nicaragua, a good place to begin is by reading our article on Entering the Nicaraguan Market, then visiting our section for Nicaragua Business.

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Nicaragua Properties for Sale

The buzz about Nicaragua's central Pacific coast has been ongoing, with much of the attention going to the strategically located beaches located due west of Managua, the capital city. Still in proximity to the international airport, the location features lower prices than elsewhere along the coast and therefore groundfloor opportunities for early investors, as well as lengthy, uncrowded beaches favorable for fishing, swimming and surfing. Some terrific new developments are taking shape while the rest of the world slowly but surely takes notice. Many are convinced Nicaragua is shaping up to be the next Costa Rica, but for now, Nicaragua properites are among the least expensive of anywhere in the world!

Below are some of the best Nicaragua real estate developments that we’re involved with. They are all well established, quality projects located along the country's up and coming Pacific coast. We'll be featuring the most up to date information including special offers made available specifically to Vinnie's World clients. View our selection of Nicaragua Properties below and see what each has to offer, then contact us for further details. We'll share our knowledge and assist you to make an informed and potentially lucrative investment.

Why deal with us directly?

Watch this space for more new offerings as we continue researching quality projects and locate the best deals along the coast and beyond.

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Contact Us

To learn more about these property buying opportunities in Nicaragua, how we can save you time and money, please contact us: nicaragua@vinniesworld.com

Business Opportunities

Have you wanted to develop a presence in Nicaragua and tap into its active tourism industry and future potential? We can assist you. Here at Vinnie's World, Nicaragua is one of our primary areas of focus and between our growing local team and network of professionals, we can assist you to establish or extend your business operations in Nicaragua and guide you through the entry process. Learn more at our section for Nicaragua Business >>

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