The secret is out. Nicaragua’s growing popularity has drawn the attention of investors looking for countries that will give their companies the competitive edge needed to succeed in the world’s most demanding markets.

Bordered by Honduras on the north, Costa Rica on the south, the Pacific Ocean on the west and the Atlantic on the east, this triangular shaped country in the centre of the Americas possesses unique geographical and demographical characteristics.

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Nicaragua is Central America’s largest country, with a 130,373 square kilometres (sq km) territory, enjoying approximately 800 kilometres of coastlines on the Pacific and Atlantic Oceans, 25 volcanic formations, more than 10,000 sq km of lakes, lagoons and rivers, 22,088 sq km of natural reserves, 7% of the world’s biodiversity and the second largest rainforest in the Americas.

People power

With a young population (80% under the age of 39) and a 93% literacy rate for urban youth that is also vastly bilingual and well-trained, Nicaragua’s productive labour force of 2.2 million people constitutes the country’s main asset. The people’s warm but passionate spirit is only matched by their rigorous work habits and high productivity.

Nicaragua initially earned international recognition after the 1979 Sandinista revolution that overcame the Somoza dynasty. Since then, the country has achieved great progress, and those who have visited and experienced today’s Nicaragua have discovered that perceptions of the country are often inaccurate.

In the past few years, the tables have turned for Nicaragua. Its people have committed to develop their diamond-in-the-rough country, focusing on education, economic growth and social wellbeing. These efforts, coupled with government initiatives, along with an audacious business entrepreneurship by the private sector, have boosted the country’s development. This dynamic economy includes: one of the most advanced telecommunications infrastructures of Latin America, diversified production (from agriculture and reforestation to food processing, textiles and apparel, auto parts and medical devices) and an average annual growth of 27% in free zone exports during the past three years. Additionally, Nicaragua has been ranked as the safest country in Central America by the Economist Intelligence Unit. This ranking, along with its unique culture and breath-taking scenery, has greatly contributed to Nicaragua’s thriving tourism industry, which is one of the most dynamic of the country’s economy, reporting an average annual growth of 13% in visits and 11% in tourism receipts.

Ease of business

Nicaragua has been continuously promoting a solid legal framework that enables investments to develop with confidence in the country and grants fiscal and non-fiscal incentives. The Law on the Promotion of Foreign Investments (Law No 344) is the main regulation for investments and provides essential guarantees such as the equitable treatment for foreign investors, freedom to repatriate all capital and profits, free currency convertibility, respect to international property and non discrimination on foreign ownership. There are other legislations that regulate and promote investments in specific sectors, for example, the Tourism Incentives Law (Law No 306), the Law on Free Zones (Decree No 46-91), the Renewable Energy Incentives Law (Law No 532), and the Law on the Conservation, Promotion and Sustainable Development of the Forestry Sector (Law No 462), among others. These legislations, coupled with a vibrant economy and the simplification of business procedures, have earned Nicaragua the classification as one of the best places in which to start a business within the Central American region, according to the 2008 Doing Business Report published by the World Bank, which measures different indicators of the investment climate in 178 countries.

International attraction

The country’s strategic location, its competitive cost structure and abundant natural resources are just some of the factors that have triggered the inflow of FDI in recent years. The first semester of 2008 has already shown a 45% increase in FDI inflow compared to the same period in 2007. In fact, on a regional benchmark comparing each country’s inflow of FDI as a percentage of its GDP, Nicaragua holds the second spot, behind Costa Rica. Investments are pouring in from all over the world, including the US, Korea, Mexico, Germany, Spain, Sweden, the Virgin Islands, as well as from other Central American countries.

Nicaragua is now positioning itself on the map as one of the hottest spots for offshore operations and one of the most dynamic economies of the region. Latin Business Chronicle ranked Nicaragua in the top five most globalised countries in Latin America, with free-trade agreements with the US, Mexico, Central America, the Dominican Republic, and Taiwan; and preferential access agreements with Canada, the EU, Colombia, Japan and Panama. Nicaragua is also a member of ALBA, which grants preferential access to Venezuela, Cuba and Bolivia. In addition, the country is currently negotiating a free-trade agreement with the EU, Canada and Chile, and as part of Central America, it is negotiating access to Mercosur. Nicaragua’s market access is estimated at one billion people.

Economic stability

The current administration is truly committed to guaranteeing the protection of private and intellectual property and to creating policies aimed at attracting foreign investment. And this isn’t only on paper; recently the country signed important agreements with the International Monetary Fund and the World Bank to guarantee economic stability. PRONicaragua, the country’s official investment promotion agency, also works proactively to generate economic development and job creation by attracting high-quality FDI. The excellent performance demonstrated by the agency earned it the 2006 WAIPA Award, granted by the World Association of Investment Promotion Agencies (WAIPA), recognising the agency as one of the top five investment promotion practitioners in the world.

Nicaragua surprises sceptics whose visions are blurred by misleading headlines and an erroneous perception that the country is insecure. And although the country does struggle with certain issues inherent to any newly born democracy, Nicaragua is on the right track regarding economic and social progress, considerably improving the country’s image and investment climate in recent years and offering the safest location in the region.

A new world economy has forced companies to seek countries such as Nicaragua not only to increase their competitiveness, but also as an entryway into the world’s leading markets. The truth is: those who have already established operations in Nicaragua are now enjoying the competitive advantages offered by the country. In fact, prospects look so good that many of these companies have already expanded or are making plans to expand their operations in the near future. Some of the most prestigious companies currently operating in Nicaragua include Sitel, Gran Pacífica, Seaside Mariana, Cone Denim, Vanity Fair, Arnecom, Wal-Mart, Cargill, Precious Woods, AEI, Norwood and Maersk.

Whether you want to manufacture autoparts, medical devices or apparel; grow produce or forestry plantations; build beachside luxury hotels or eco-lodges on tree tops; offer world-class business process outsourcing services; or generate wind-based energy, Nicaragua can make it happen.

Take the time to experience Nicaragua up close and see what all the excitement is about. Meanwhile, we’ll be making your arrangements.

PRONICARAGUA FACT FILE

PRONicaragua provides the following complimentary support services to qualified investors interested in exploring investment opportunities in Nicaragua:

• Complete information on business opportunities in Nicaragua and key country information.

• Organisation of customised site visits with tailor-made information packages.

• Facilitation services including advisory and advocacy for foreign investors. We support companies throughout the entire investment process by providing referrals, government contacts and general start-up facilitation services.

• Assistance in finding local companies for possible joint ventures and identifying suppliers and other forms of business alliances.

• Assistance with identifying the ideal real estate option for your project and support with due diligence.

• Aftercare services to identify main problems affecting established investors to improve the business environment.

Sectors prioritised:

• Light manufacturing and assembly

• Energy and infrastructure

• Tourism

• Contact centres and business process outsourcing

• Textiles and apparel

• Agribusiness

For more information, contact:

Managua – Nicaragua: (505) 270-6400

Washington, DC – USA: (202) 615-7019

www.pronicaragua.org

NICARAGUA FACT FILE

Capital: ManaguaLanguages: Spanish (official), with English and ethnic languages spoken on the CaribbeanAdministrative divisions: 15 departments, two autonomous regionsTerritorial extension: 130,373 square kilometres

Standard Time Zone:

UTC/GMT – six hours

Currency: Cordoba (C$)Exchange rate: C$19.85 = US$1 (Dec 2008)GDP (2007): US$5.7bnGDP per capita (2007): US$1023GDP real growth rate (2007): 3.8%Exports: US$2.4bn

Population: 5.6 millionLabour force: 2.2 millionForeign direct investment: US$335m in 2007, US$195m during first semester of 2008 (an increase of 45%)

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