Law Firm Directory

Browse all firms with extended profiles for Nicaragua

Legal Market Overview

In the Nicaraguan market, all eyes are on the November 2021 presidential elections and the potential ousting of President Daniel Ortega and Vice President and First Lady Rosario Murillo. With the country still reeling from the effects of the anti-Ortega protests of April 2018 and the violent government crackdown (which left 300 dead and 100,000 fleeing persecution), the integrity of the elections has been called into question. In May 2021, the country’s congress, which is controlled by Ortega’s Sandinista National Liberation Front, chose new members of the Supreme Electoral Council, in order to push up the deadline to register political alliances and hobble any potential opposition coalitions. This is after the December 2020 passage of a law that allows Ortega to declare political rivals to be ‘terrorists’ and ‘traitors to the homeland’ and bar them from running for office.

The Ortega government’s much-criticised Covid-19 response (refusing to close shops and schools and infamously holding ‘Love Walk in the Time of Covid-19′ rallies) has given way to a vaccination programme via donations from the UN’s Covax programme, India and Russia. But with a limited supply of vaccines, a glacial roll-out and the omnipresent possibility of another wave of the virus, the future remains uncertain.

With Nicaragua’s GDP growth rate hovering around -2% in 2020, firms expect some recovery once the uncertainty surrounding the elections ends, and as the vaccine rollout progresses. Meanwhile, as firms split the difference between telecommuting and in-office work (they were never closed), business continues.

In the corporate and finance area, transactions have slowed, with some financial projects at a standstill. Firms indicate a rise in restructurings, mortgages and due diligence matters. Many stressed the importance of competitive pricing and the need for constant engagement with clients, often through webinars.

In relation to dispute resolution, firms reported an increase in clients preferring arbitrations over litigation proceedings, with hearings migrating to virtual platforms. Other teams have seen a rise in litigation, as a result of March 2019 changes to the tax regime, which increased the alternative tax rate for businesses that earn than $5m in gross annual revenue. Firms also predict a rise in breach of contract and other claims, all hinging on the resolution of the pandemic and clarity with regards to the political environment.

In the energy and natural resources area, firms report energy is on the upswing, highlighting projects like New Fortress Energy’s 300MW natural gas-fired power generation project, which has benefitted from a law passed by the Nicaraguan National Assembly in October 2020 providing extensive tax incentives for the project. Firms predict the energy matrix will continue to change with the potential arrival of carbon generation.

In the intellectual property sphere, pharmaceuticals, food and health remain reliable sectors. Teams indicate some frustration with trade mark office bureaucracy. The need to deliver vital documents in person, which has been affected by the pandemic, and the importance of maintaining a competitive price structure are chief among firms’ concerns. Firms envision a future rise of interest in the biotechnology sector, which will require further study of how patents in the area can be protected.

In the real estate sector, the second-home market has experienced a boom, with overseas clients buying residences sight unseen. Firms indicate purchases will be on the rise, with no waning interest on the part of foreign investors. But the same teams are quick to point out that all prognostications are subject to the 2021 elections.

Many regional firms are active in the Nicaraguan legal market, including Arias, Consortium Legal, García & Bodán, Aguilar Castillo Love, BLP, Central Law Nicaragua, Lexincorp, Latamlex Nicaragua, EY Law Central America and LatinAlliance Nicaragua. Meanwhile, Alvarado y Asociados is the most notable full-service domestic firm in the market, which also contains well-known intellectual property boutiques Guy José Bendaña-Guerrero & Asociados, Bendaña & Bendaña and Estudio Caldera, S.A.. In addition, global firms Dentons Muñoz and ECIJA Castillo & Fiallos have now established a presence in the country.