An official website of the United States Government Here's how you know

Official websites use .gov

A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS

A lock ( ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.


1. Openness To, and Restrictions Upon, Foreign Investment

The Nicaraguan government seeks foreign direct investment to project normalcy and signal international support. As traditional sources of foreign direct investment have declined amid the ongoing political crisis, the government has increasingly pursued investment from ideologically friendly countries such as Iran, Russia, and China. Investment incentives target export-focused companies that require large amounts of unskilled or low-skilled labor.

Local laws and practices generally do not treat foreign and domestic investors differently. Foreign investors report significant delays in receiving residency permits, requiring frequent travel out of the country to renew visas.

ProNicaragua is the country’s official investment and export promotion agency. The agency is highly politicized and run by the President’s and Vice President’s OFAC-sanctioned son Laureano Ortega. ProNicaragua provides information packages, investment facilitation, and prospecting services to interested investors.

Personal connections and affiliation with influential industry associations and chambers of commerce are critical for foreigners investing in Nicaragua. Though municipal and ministerial authorities may enact decisions relevant to foreign businesses, all actions are subject to de facto approval by the Presidency.

Foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity. Any individual or entity may make investments of any kind. In general, Nicaraguan law provides equal treatment for domestic and foreign investment.

Investors should be cautious of the 2020 Foreign Agents Law. While the law targets NGOs and exempts business entities, some companies have been required to register or end their social responsibility efforts. The law requires anyone receiving funding from foreign sources to register with the Ministry of the Interior and provide monthly, detailed accounts of how funds are intended to be used. The government used the law to strip 48 NGOs of their legal status as of April 2022.

Nicaragua allows foreigners to be shareholders of local companies, but the company representative must be a Nicaraguan citizen or a foreigner with legal residence in the country. Many companies satisfy this requirement by using their local legal counsel as a representative. Legal residency procedures for foreign investors can take up to 18 months and require in-person interviews in Managua.

The government can limit foreign ownership for national security or public health reasons under the Foreign Investment Law. The government generally requires all investments in the petroleum and mining sectors to include one of Nicaragua’s state-owned enterprises as a partner. Investments in the mining sector have similar requirements.

The government does not formally screen, review, or approve foreign direct investments. However, in practice, President Ortega and Vice President Murillo maintain de facto review authority over any foreign direct investment. This review process is not transparent.

The WTO conducted a trade policy review of Nicaragua in 2021. The review noted that Nicaragua’s trade policy had remained largely unchanged since the previous review in 2012.

While the Government of Nicaragua is eager to attract foreign investment, it lacks a systematic business facilitation effort and instead relies on one-on-one engagement with potential investors.

Nicaragua does not have an online business registration system. Companies must typically register with the national tax administration, social security administration, and local municipality to ensure the government can collect taxes. Those registers are typically not available to the public.

According to the Ministry of Growth, Industry, and Trade (MIFIC), the process to register a business takes a minimum of 14 days. In practice, registration usually takes much longer. Establishing a foreign-owned limited liability company takes eight procedures and 42 days.

Nicaragua does not promote or incentivize outward investment and does not restrict domestic investors from investing abroad.

6. Financial Sector

There are no restrictions on foreign portfolio investment. Nicaragua does not have its own equities market and there is no regulatory structure to facilitate publicly held companies. There is a small bond market that trades primarily in government bonds but also sells corporate debt to institutional investors. The Superintendent of Banks and Other Financial Institutions (SIBOIF) supervises the bond market. The overall size and depth of Nicaragua’s financial markets and portfolio positions are very limited.

Nicaragua has officially accepted the obligations of IMF Article VIII and maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions. New policies, however, threaten the free flow of financial resources into the product and factor markets, as well as foreign currency convertibility. Banks must now request foreign currency purchases in writing, 48 hours in advance, and the Central Bank reserves the right to deny these requests.

While the banking system has grown and developed in the past two decades, Nicaragua remains underbanked relative to other countries in the region. Only 31 percent of Nicaraguans aged 15 or older have bank accounts, and only 8 percent have any savings in such accounts, approximately half the rate of other countries in the region according to World Bank data. Nicaragua also has one of the lowest mobile banking rates in Central America.

Following a sharp contraction in 2018, the banking sector recovered slightly in 2019 and 2020. In 2021, liquidity ratios continued high and stable at 45 percent and portfolios increased 5.5 percent. Despite expanded lending, banks remain cautious when granting new financing. The ratio of non-performing loans to banking sector assets was 15 percent in 2021. Despite improving indicators, the banking sector remains vulnerable to sociopolitical uncertainty. Since 2018, banks have reduced their branches from 612 to 445 across the country.

The banking industry remains conservative and highly concentrated, with four banks – Banpro, LAFISE, BAC, and Fichosa – controlling an estimated 77 percent of the country’s market. The 2018 crisis sparked large withdrawals of deposits from the banking system. Those withdrawals have stabilized, but total assets remain below pre-crisis levels. In 2021, the financial system had total assets worth $4.7 billion – a 9 percent increase over 2020’s $4.3 billion, but 14 percent lower than in March 2018’s $5.5 billion.

The Central Bank of Nicaragua was established in 1961 as the regulator of the monetary system with the sole right to issue the national currency, the córdoba. Foreign banks can open branches in Nicaragua. Since 2018, Nicaragua has lost several correspondent banking relationships. Wells Fargo Bank withdrew altogether, and Bank of America withdrew correspondent services from a local bank. Recent amendments to the Consumer Protection Law could force local banks to service suspicious account holders – including persons designated under international sanctions regimes – further jeopardizing correspondent banking relationships.

Foreigners can open bank accounts if they are legal residents in the country. The Foreign Investment Law allows foreign investors residing in the country to access local credit, and local banks have no restrictions on accepting property located abroad as collateral.

In 2019, the Department of Treasury’s OFAC designated Bancorp – a subsidiary of ALBANISA, a joint venture between the state-owned oil companies of Nicaragua and Venezuela – for money laundering and corruption. Bancorp submitted its dissolution to the Superintendency of Banks and Other Financial Institutions (SIBOIF), but the closure was secretive and outside the legal framework that governs financial institutions in Nicaragua. In 2021, OFAC designated two senior government officials overseeing the banking system. OFAC designated the President of the Central Bank for implementing Nicaragua’s consumer protection law that could obligate Nicaraguan financial institutions to facilitate sanctionable transactions. OFAC also designated the head of SIBOIF for forcing commercial banks to provide financial information on the regime’s political opponents.

Nicaragua does not have a sovereign wealth fund.

8. Responsible Business Conduct

Many large businesses have active Responsible Business Conduct (RBC) programs that include improvements to the workplace environment, business ethics, and community development initiatives. Prominent business groups such as CCSN and the Nicaraguan Union for Corporate Social Responsibility (UniRSE) are working to create more awareness of corporate social responsibility. Nicaragua’s Foreign Agents Law has forced many businesses to curtail or end their corporate social responsibility operations to avoid the burdensome and intrusive registration process.

The government does not factor RBC policies or practices into its procurement decisions, nor does it explicitly encourage RBC principles. The government does not participate in the Extractive Industries Transparency Initiative or the Voluntary Principles on Security and Human Rights. There are no domestic transparency measures requiring the disclosure of payments made to governments. Nicaragua is not a signatory to the Montreux Document on Private Military and Security Companies or a participant in the International Code of Conduct for Private Security Service Providers’ Association.

Department of State

Department of the Treasury

Department of Labor

In June 2021, Nicaragua announced the creation of a national climate management system and guidelines for a national climate policy. However, the regulation contained few details and is still being developed. Nicaragua has not set a net-zero carbon emissions goal or outlined a long-term low-carbon strategy.

9. Corruption

Nicaragua has a legal framework criminalizing corruption, but there is no expectation that the framework will be enforced. A general state of permissiveness, lack of strong institutions, ineffective system of checks and balances, and the Ortega-Murillo regime’s complete control of government institutions, create conditions for rampant corruption. The judicial system remained particularly susceptible to bribes, manipulation, and political influence. Businesses reported that corruption is an obstacle to investment, particularly in government procurement, licensing, and customs and taxation.

The government does not require private companies to establish internal controls. However, Nicaraguan banks have robust compliance and monitoring programs that detect corruption. Multiple government officials and government-controlled entities have been sanctioned for corruption.

Nicaragua ratified the United Nations Convention against Corruption (UNCAC) in 2006 and the Inter-American Convention Against Corruption in 1999. It is not party to the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.

Nicaragua’s supreme audit institution is the Contraloria General de la República de Nicaragua (CGR). The CGR can be reached at +505 2265-2072 and more information is available on the CGR website .

Investment Climate Statements
Edit Your Custom Report

01 / Select A Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future