Legal Market Overview
Nicaragua is still experiencing hardship in the aftermath of the 2018 socio-political crisis. Although the autocratic regime led by President Daniel Ortega and his wife and Vice President Rosario Murillo has not eased its grip on the country, legal firms noted a slow revival of the economy in the final quarter of 2019. The next presidential election is set to take place in 2021 and many harbour hope that it will bring an end to the second Ortega era.
At the time of writing, however, both the hesitant optimism and cautious rehabilitation of the Nicaraguan economy is seriously endangered by the global Covid-19 outbreak, up to the point of the destruction of all recent progress. The governing duo’s approach to dealing with the pandemic has only worsened the situation: Ortega and Murillo are reluctant to implement any real preventive measures and have ordered that large events and sports leagues, for instance, go full-steam ahead. Both the official case counts and death toll remain suspiciously low and citizen-run initiatives report considerably higher numbers. The lack of a proper response is particularly dangerous as the healthcare facilities in Nicaragua are limited.
Corporate and finance work has been particularly affected by the situation due to the fact that companies and projects in Nicaragua rely heavily on foreign business and investment. This flow of money has come to a sudden standstill during the pandemic, as investors return to their own shores. For December 2020, the International Monetary Fund predicts a GDP growth of -6.0%, another sharp increase from the growth of -3.879% in 2019.
The real estate scene, which had already taken a serious hit in the 2018 crisis, has also fallen victim to the economic slump caused by the global pandemic. Although the popular tourism and second home areas on the West Pacific Coast, namely San Juan del Sur and Tola, saw signs of recovery towards the end of 2019, most projects were soon after put on hold or cancelled altogether in light of the uncertain times.
Intellectual property practitioners report a largely unaffected market, especially with regard to regional and international clients, as they do not require a physical presence in Nicaragua to protect and enforce trade marks and other intellectual property rights.
The crisis has also given rise to more work in certain practice areas: as the government finds itself under increased financial pressure, it has significantly intensified its tax collection efforts. From a legal point of view, tax auditing and tax planning are therefore in high demand. There is a similar state of affairs on the contentious side of business, where firms note an upturn in dispute resolution matters. Assistance with debt collection as well as defence against government authorities are particularly sought-after services in this practice area.
Our 2020 coverage of the Nicaraguan market takes this recent development into account and hence dedicates a chapter to dispute resolution services for the first time this year. On top of that, we have also launched a ranking for energy and natural resources, where renewable energy, including wind and solar power, and project financing are trending topics.
Considering the size of the country and its economy, the Nicaraguan legal market is fairly crowded and therefore extremely competitive. Most Central American regional firm have offices in the capital of Managua, namely Aguilar Castillo Love, Arias, BLP, Central Law Nicaragua, Consortium Legal, García & Bodán, Latamlex Nicaragua, LatinAlliance Nicaragua and Lexincorp.
The number of firms operating solely in Nicaragua is substantially smaller, with full-service firm Alvarado y Asociados the key local player. Boutiques such as Guy José Bendaña-Guerrero & Asociados, Bendaña & Bendaña and Estudio Caldera, S.A. are active in intellectual property law.
Furthermore, global heavyweight Dentons Muñoz has established a presence in the country, as has Ibero-American leader ECIJA Castillo & Fiallos. Both firms launched their operations by joining forces with local offices over the course of 2018.
Navarro Amador & Asociados is the only firm to appear in our Nicaragua rankings for the first time this year. Founded by Amilcar Navarro in 2016, the firms focuses on legal services in the corporate field.