A growing number of multinational companies are looking to invest in Nicaragua’s business process outsourcing (BPO) sector, thanks to a 100% tax exemption on raw materials, imported supplies and machinery, and low operational costs.
These factors mean the country is increasingly able to compete against El Salvador and also Costa Rica, a leader in BPO activities over the last year, placing it just behind Ireland but ahead of Poland and Malaysia, according fDi Markets data (see page 79).
Though Costa Rica has seen many recent BPO investments – by companies such as France’s Teleperformance and Motif and Sykes Enterprises of the US – labour costs have increased in the country, and Nicaragua hopes to use this to its advantage.
Nicaragua’s telecoms sector is fully privatised and considered to be one of the most reliable and modern in Latin America, thanks in part to its almost 4000 kilometres of fibre optics that can reach even the most remote of areas. The country has also recently seen major improvements in its bandwidth and data networking infrastructure.
Two years ago, Sitel, one of the world’s largest outsourcing companies, launched operations in Nicaragua, which have become one of the country’s biggest success stories over the past 18 months, according to Sitel’s vice-president of marketing, Andrew Kokes.
“It’s been a phenomenal experience. What made [Nicaragua] a tough place to be in the 1980s has changed dramatically [and] now everyone has come [back] bilingual and educated,” Mr Kokes told BPO trade publication Nearshore Americas.
Sitel was so impressed that the company opened up a second operation within the first year of investing in Nicaragua, a country which suffered a violent guerrilla war for most of the 1980s.
California-based PatentVest has been working in the country since 2006 and noted the speed in which its BPO operations got running. “To my astonishment, the Nicaraguan team got more data organised in its first three months on the job than the California team did in 12 months,” PatentVest founder Chris Marlett told Nearshore Americas.
Stream Global Services, a Massachusetts-based BPO company that handles sales, customer service and technical support for the Fortune 1000 companies, started operations in Nicaragua in February after its takeover of eTelecare. Currently there are 14 companies with BPO operations in the country and the sector employs about 2000 professionals.