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Editorial

Legal market overview

Interest in Nicaragua continues to increase, reflecting GDP growth that has been estimated at around 5% in 2015, although the country remains one of the least developed and the second poorest in Latin America and the Caribbean.

Of particular interest to investors and the international audience is the planned interoceanic ‘Grand Canal of Nicaragua’, which would involve a $40bn-$50bn investment by the end of the decade. The proposed project is strongly supported by the country’s population but, on the flipside of potential wealth generation and economic growth, others point to the inevitable impact on displaced populations or damaged wildlife and ecosystems.

After years of delay, the Tumarín hydroelectric power plant finally received its $1.1bn funding in April 2015. The 253MW power plant, which is to be developed by Centrales Hidroeléctricas de Nicaragua, is now projected to commence operations in February 2019.

Besides renewable energy, the mining, banking, tourism and service sectors are also growing. Notably, Grupo Financiero Ficohsa recently purchased Citibank’s Nicaraguan businesses five months after the bank’s announcement that it would divest its commercial operations in six Latin American markets. In the real estate space, hotels and other tourism infrastructure assets have been a strong source of activity throughout the past decade, but the majority of law firms also now report an increased demand for advice on commercial and office space developments, as well as agro-industrial investment and residential projects, particularly in Managua. Property title disputes remain a major issue and the raft of regulations in place continue to make property purchases risky and difficult but the Nicaraguan government’s work on mapping properties raises hope of incentivising a larger volume of investor traffic. In general, the country is relatively open to foreign investment and poses fewer restrictions than some others in the region.

Amendments to the new Nicaraguan tax law, which has been in effect since 2013, were enacted in December 2014 and include an increased tax rate on the capital income of non-residents and an elimination of VAT self-assessment; these changes have generated a steady inflow of demand for legal advice.

As regional firms continue to expand across Central America and beyond, the legal market in Nicaragua has seen some new arrivals with both Pacheco Coto and BLP opening local offices in 2013 and 2014 respectively. They join other regional firms with a presence in Nicaragua, including Lexincorp, Arias & Muñoz, Consortium - Centro América Abogados and García & Bodán. Local firms such as Alvarado y Asociados provide excellent service and ensure the market remains a competitive one for these regional players.

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Legal Developments in Nicaragua

Legal Developments and updates from the leading lawyers in each jurisdiction. To contribute, send an email request to
  • Policies for Water Resources in Nicaragua

    Every day, we become more aware of the importance of protect- ing our environment, climate changes occurring on an almost daily basis have made that need clear. It is for this reason, that even though it is of upmost importance that we protect all of our natural resources, water as a finite life source is one of the most important and one of the resources requiring the most protection and preservation.
  • The Regulation of Investment Companies in Nicaragua

    Having our legislation reserved a space for forty-five years for a proper regulation of Investment Companies, since the adoption of the Special Law on Financial Companies, Investment and others, known as Decree 15-L of April 9, 1970, and various attempts along these years; today Nicaragua has a legal body that regulates such companies satisfactorily.
  • Legal Relevance of Trademark Registration and Use

    Over the years, trademark registration processes have increased in Nicaragua, as a result of different international conventions and treaties which collaborate to properly understand trademark registration process and use matter; besides, Law N° 380 “Law on Trademark and Other Distinctive Signs”, its regulation and the Intellectual Property Registry, consolidates the bases for a better legal protection for businessmen and consumers IP´ s related matters, providing them not only with legal protection, but also with the confidence to compete and offer their goods and services on the market.
  • Electronic Money in Nicaragua: Amalgamating technology, law and business

    In humanity ́s never-ending quest for improvement, technology plays a significant role as to the development of tools, production of devices and equipment, the upgrading of techniques, skills and processes which, in general, lead to the accomplishment of higher and higher goals that impact or influence our lives in different ways.
  • “Clean and tidy” lease clause requires tenant to remediate subsoil contamination

    Belinda Green , Senior Associate | Monday 31 August 2015
  • From the Depths of the Earth…

    …to the top of business, Nicaragua has witnessed the growth, development and progress of the mining industry in the recent years. According to information available on the Nicaraguan Mining Authority´s official website, there are more than 50 important mining-related projects representing more than 60 million dollars in investments, with worldwide investors including companies from China, Canada, United States, Peru, Mexico, Australia, Brazil, Japan, United Kingdom and others.
  • Basic Labor Benefits Required by the Current Nicaraguan Law

    As a lawyer at Alvarado y Asociados in Nicaragua, I have had the opportunity to assist many investors that want to incorporate a company in this country.
  • Arbitration in Nicaragua

    Among the alternative means of dispute resolution, arbitration in commercial relations is a figure that over the years has been gaining territory over conflict resolution in the courts. Arbitration is a procedure by which the appointed arbitrators issue a binding decision on the parties in a dispute named award, which allows any differences raised in trade relations to be solved in a friendly, quick and impartial manner.
  • Arbitration in Nicaragua

    Among the alternative means of dispute resolution, arbitration in commercial relations is a figure that over the years has been gaining territory over conflict resolution in the courts. Arbitration is a procedure by which the appointed arbitrators issue a binding decision on the parties in a dispute named award, which allows any differences raised in trade relations to be solved in a friendly, quick and impartial manner.  Arbitration in Nicaragua
  • The legal difference between a consultant and an employee according to Nicaraguan Law

    Knowing the legal difference between a consultant and an employee is important for a company that needs to hire someone in Nicaragua or for a person interested in rendering services for a company or another person, due to the fact that the nature of the contractual relationship will determine many factors that both parties must be aware of before executing the contracting modality that will govern the relationship between them - the nature of the contractual relationship impacts on the employment benefits, tax implications and liabilities that the parties must comply with according to the law.  labor_law_in_nicaragua

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