1. Country Presentation ● 2016

2. Assessment and decision making Implementation of the project
OUR SERVICES
Information about Nicaragua and business opportunities
Customized information packages
Organization of site visits: meetings with companies and institutions
Support with information on the structure of operational costs and fiscal charges
Identification of options for locations for real estate
Legal advice
Directory of suppliers of related goods and services
Support and facilitation
Facilitate and expedite government procedures
Support in facilitating the exporting process
Information about business opportunities in the Caribbean Coast through our regional office PRONiCaribe
Assessment and decision making
Implementation of the project
Aftercare
PRONicaragua is the Official Investment Promotion Agency of the Government of Nicaragua.

3. COUNTRY PROFILE Capital Managua Area 130,373.4 km2 Official Language
Región Central /
Central Region
Región Pacífico/
Pacific Region
Región Caribe/
Caribbean Region
Capital
Managua
Area
130,373.4 km2
Official Language
Spanish
Population
6.2 million
Currency
Córdoba
Exchange Rate
(2016 Average)
C$28.62 = US$1.00
Time Zone
UTC/GMT -6 hours
Source: Central Bank of Nicaragua.

4. STRATEGIC LOCATION

5. 2015 ECONOMIC FIGURES Gross Domestic Product
US$12.69 billion (4.9% growth vs 2014)
GDP per capita
US$2,027
Exports
US$4.89 billion
FDI Inflows
US$1.22 billion*
Gross International Reserves
US$2.49 billion (2.35 times the monetary base)
Inflation
3.05%
Devaluation of Currency
5% annual vs. US Dollar
Sources: Central Bank of Nicaragua, Ministry of Development, Industry and PRONicaragua. *Estimates Data

6. ECONOMIC GROWTH
Real GDP Growth (%)
2011
2012
2013
2014
2015
6.2
5.1
4.5
4.7
4.9
Min Zhu, Deputy Managing Director of the IMF, described Nicaragua´s economic growth as “excellent” as it has outperformed Latin America´s average growth rate of 1.2% and
Central America´s 2.2%.
Source: Central Bank of Nicaragua.

7. GDP GROWTH IN THE REGION
HONDURAS
GDP 2015: 3.6%
Average of 5 years: 3.5%
GUATEMALA
GDP 2015: 4.1%
Average of 5 years: 3.8%
NICARAGUA
GDP 2015: 4.9%
Average of 5 years: 5.1
EL SALVADOR
GDP 2015: 2.6%
Average of 5 years: 2.1%
PANAMA
GDP 2015: 6.0%
Average of 5 years: 8.4%
COSTA RICA
GDP 2015: 3.5%
Average of 5 years: 4.0%
Source: Central Bank of Nicaragua and IMF.

8. ECONOMIC STABILITY
Nicaragua maintains positive relations with different multilateral organizations such as the International Monetary fund (IMF), World Bank (WB), the Inter-American Development Bank (IDB), and the Central American Bank for Economic Integration (BCIE)
On July 2015, Moody´s announced an improvement in the credit rating of Nicaragua, going from B3 to B2.
On December 2015: Fitch Ratings assigned B+ for the first time to Nicaragua with steady perspective.
On February 2016: Standard & Poor's assigned B+ for credit ratings, local and foreign currency. The perspective of the qualification is long term steady.
“¨The macroeconomic policies implemented by the Government of Nicaragua are positive, and should serve as an example for Latin America”
Min Zhu, Deputy Managing Director of the IMF

9. EVOLUTION OF FOREIGN DIRECT INVESTMENT
According to preliminary statistics from 2015, the sectors that registered more FDI inflows were: telecommunications, industry and commerce and services.
Source: Central Bank of Nicaragua, Ministry of Development, Industry and Trade
and PRONIcaragua.*Estimated data

10. EVOLUTION OF EXPORTS
For 2015, total exports reached US$4.9 billion. The main export destinations were: the United States, Central America, Mexico, the European Union and Venezuela.
Source: Central Bank of Nicaragua.

11. 2015 Main Export Products (% of total value)
Textile and Apparel (26.8%)
Cigars and Tobacco (4.5%)
Automotive Harnesses (11.7%)
Dairy Products (4.0%)
Bovine Meat (9.4%)
Sugar (3.2%)
Coffee (8.6%)
Shrimps (3.1%)
Gold (6.5%)
Peanuts (2.1%)
Source: Ministry of Development, Industry and Trade.

12. Access to 1.5 billion people
AN IDEAL EXPORT PLATFORM
Access to 1.5 billion people
Free Trade Agreement
Preferential Access Agreement
Solidarity Union Agreements
Central American Common Market
Agreements under Negotiation
Source: Ministry of Development, Industry and Trade.

13. MARKET ACCESS
Nicaragua constantly seeks to increase its access to the world’s most important markets in order to consolidate itself as the ideal export platform.
Agreements
Countries
Free Trade Agreements
United States, Mexico, Panama, Taiwan, Dominican Republic, Chile & European Union
Central American Common Market
Nicaragua, Guatemala, El Salvador, Honduras & Costa Rica. Additionally, free movement of capital, services and human resources among CA-4 countries.
Generalized System of Preferences
Japan, Norway, Canada, Russia and Switzerland.
ALBA agreement
Venezuela, Ecuador, Granada, Saint Lucia, Bolivia, Cuba, Antigua & Barbuda, Dominica, and Saint Vicente and the Grenadines
Agreements under Negotiation
South Korea, Canada, Peru, Bolivia.
ALADI (Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela y Cuba)
Source: Ministry of Development, Industry and Trade.

15. Demographic Indicators
LABOR FORCE
Demographic Indicators
Population under 39 years old
76.1%
Unemployment*
6.7%
Labor Force*
3.2 million
Underemployment
46%
Source: Central Bank of Nicaragua. *2014 third quarter estimated data

16. MODEL OF DIALOGUE AND CONSENSUS
The Government of Nicaragua, the private sector and workers coordinate efforts and design strategies to:
Promote economic development
Generate new decent jobs
Reduce poverty
     
Governmental entity chaired by the President with government and private sector representatives, to follow up on agreements and promote better working relationships.
Signing of tripartite agreement between government, private sector and union leaders to fix minimum wage increases and social responsibility strategies in the long term.
The model of dialogue and consensus has been included in the article 101 of the Political Constitution of Nicaragua.
More than 100 laws passed by consensus with the Superior Council of the Private Enterprise (COSEP).

17. DEVELOPING THE ENERGY SECTOR
Since 2007, the Government of Nicaragua set out to: increase generation capacity, Expand coverage, and go green, as part of its key development strategies of the country.
Installed Capacity: 1,346 MW
Installed Capacity: 819 MW
Expected Capacity: 1,666 MW
Thermal Renewable Energy
Installed capacity has increased 64% since 2007.
Coverage has reached 85% of the national territory.
Source: Nicaraguan Energy Institute.

18. LEGAL FRAMEWORK FOR FOREIGN INVESTMENT
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
Access to loans through local banks, according to their terms and conditions of approval.
Nicaraguan legislation allows the setup of companies with 100 percent of foreign capital; in other words, the participation of national partners is not necessary.
Additionally, the Mediation and Arbitration Law (Law 540) governs two alternate methods to the judicial process to expeditiously solve any dispute resulting from contractual relations between parties.

19. FREE ZONE REGIME

24. GEOGRAPHIC LOCATION Sector # of Companies Share Apparel 81 39% Tobacco33
16%
Agroindustry 27
13%
Outsourcing Services 25
12%
Automotive Harnesses 5 2%
Other 36
17%
Total 
207
100%
Department with free zones
Department without free zones
Source: National Free Zone Commission

25. FREE ZONE EVOLUTION 2007 2015 Change Industrial Parks 32 50 56%
Companies
120
207
73%
Employment
88,750
110,314
24%
Industrial Space (m2)
1,000,051
1,901,876
90%
Exports (millions of US$)
1,106
2,557
131%
Exports / Employment
12,459
23,182
86%
Employment / Companies
740
533
-28%
Source: National Free Zone Commission

26. FISCAL INCENTIVES Free Zones Incentives Law (Law 917)
Nicaragua offers significant fiscal incentives under the free zones regime for industrial companies with transformation or value added processes and that will exporting all of their production. The law is administered by the National Free Zone Commission.
100% tax exemption of:
Income tax 1
Import taxes for machinery, equipment, and raw materials
Municipal tax
Sales tax
capital and property tax
real state taxes
1Valid for 10 years with the possibility to be extended once with previous authorization.

27. Minimum Wage by Law (US$)
MINIMUM SALARY - FREE ZONES
An agreement signed by the Government of Nicaragua, the Private Sector and Unions that sets forth increase rates on minimum wage for a specific period of years in the future, applicable to companies in the Free Zones Regime.
The third edition of the Tripartite Agreement established the following increase rates:
Minimum Wage by Law (US$)
2014
2015
2016
2017
  Monthly wage, including fringe benefits (48%)
228.35
234.88
241.58
248.48
Hourly wage, including fringe benefits (48%)
1.09
1.13
1.16
1.19
The 8% yearly increase equals to 2.9% in U.S dollars, due to the 5% annual devaluation rate
This positive dialogue between all parts provides predictability and reflects
the country’s stable investment climate.

29. Free Zones Corporation. Industrial Real Estate – Basic Structure
INDUSTRIAL PARKS IN NICARAGUA
Nicaragua has one state-owned industrial park called “Las Mercedes”, which is administered by the
Free Zones Corporation.
Additionally, there are over 15 privately-owned industrial park that offer quality industrial space to companies operating under the free zone regime. Most of these parks also offer a rent-to-own option.
Industrial Real Estate – Basic Structure
Type
Tariff per m² (US$)
Rent
Some of the services provided include: perimeter security, maintenance, customs office, water treatment plant and collection and disposal of solid wastes.

30. A Competitive Cost Structure NICARAGUA’S VALUE OFFER
Low labor costs + generous fiscal incentives
+ FTAs 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 safety and great quality of life.

31. COMPANIES UNDER THE FREE ZONE REGIME