Nicaragua

Nicaragua is the largest state in Central America by area. From the west it is washed by the Pacific Ocean, and from the east by the Atlantic.

General information

The official name of the country — Republic of Nicaragua. The state occupies an area of 129,494 km² (96th in the world). The population is about 6.851 million (as of 2021). Nicaragua — one of the most sparsely populated countries in Central America and second only to Belize in this respect.

Nicaraguans — the main population of Nicaragua, is about 87% of the country's inhabitants. In addition to ethnic Nicaraguans, the republic is also inhabited by various Indian peoples of the Macro-Chibcha family, as well as Jamaicans and Antillanos.

Ethnic composition of the local population:

• Mestizo 69%
• White 12%
• Blacks, mulattos and sambo 14%
• Indians 5%

The official language of Nicaragua — Spanish. The inhabitants of the country speak a regional version of Spanish, which is also used by the Indians settled in the west of the country (they have already largely lost their native languages). All other Indians, except for their native languages, know the West Indian dialect of the English language. The same dialect is also common among the population of African and mixed origin in the east of the country.

Most of the Nicaraguan population is Catholic — about 90%. West Indians — mostly Protestants (a significant number are Moravian Brethren).

The official currency of the country is the cordoba.

Managua — capital of the Republic of Nicaragua. The city is the industrial and financial center of the country. Many major national and international companies are headquartered here. Managua is also the main social and political center of Nicaragua. In the capital there are offices of all national banks, including the Central Bank of Nicaragua. In the capital, due to the growing economy, the demand for commercial real estate is growing, which provokes its construction, however, in recent years, due to political instability in the country and the start of a recession in the economy, the demand for real estate is falling, and there is practically no construction of new real estate.

The center of the intellectual life of the country is Leon, where the university, founded in 1812, is located. The population of the city is 190 thousand people. The railroad connects Granada (88,000), a city on Lake Nicaragua, with the Pacific port of Corinto. Other major cities — Masaya (100 thousand), Chinandega (110 thousand) and Matagalpa (68 thousand). All these cities are located in the western part of the country. The largest city on the Caribbean coast — Bluefields with a population of 20 thousand people.

The territory of the country is administratively divided into 15 departments and 2 autonomous regions.

History, geography, culture, mentality

In ancient times, the territory of Nicaragua was inhabited by Indian tribes. In the XVI century. it was captured by the Spaniards, who turned its western part into their colony.

In 1821, Nicaragua declared independence from Spain, from 1821 to 1823 it was part of the Mexican Empire, and then — to the Central American Federation, since 1838 — independent state.

From the middle of the XIX century. a struggle flares up between the elites of the two largest cities in the country — Leon (Liberal Party) and Granada (Conservative Party). To fight the conservatives, the liberals invited American mercenaries under the leadership of W. Walker, who in 1857 seized power in Nicaragua by force (recognized by the United States as the legitimate president of Nicaragua). By the combined efforts of the Central Asian states, W. Walker was expelled.

In 1893-1909. in power was the liberal S. Santos Zelaya, who annexed the east coast of Nicaragua. Tensions with the United States led to the invasion of the country by American armed forces and the overthrow of S. Santos Zelaya.

In 1912-1933. Nicaragua was occupied by US troops, which were later withdrawn from the country at the end of the guerrilla war under the leadership of A. Sandino. After his assassination in 1934, the dictatorship of the Somoza family was established in Nicaragua. The struggle of the Nicaraguan people under the leadership of the FSLN led to the fall in 1979 of the regime of the last dictator. The agrarian reform was carried out in the country, the nationalization of banks, parts of industrial enterprises, etc. These measures provoked opposition from the so-called. US-backed Contras. In 1979-1990. there was a civil war in Nicaragua.

In the general democratic elections of 1990, the Sandinistas lost to the candidate of the liberal opposition V. Barrios de Chamorro. For the next 15 years, moderate liberal governments were in power. In 2006, the leader of the FSLN, D. Ortega, won the presidential election and holds this post to this day.

Nicaragua has access to both the Pacific y and the Atlantic Ocean (Caribbean Sea). On land, Nicaragua is bordered by Honduras to the north and Costa Rica to the south. Nicaragua has four major natural areas within its diverse landscape. Most of the country is occupied by a mountainous region narrowing to the south — Nicaraguan highlands.

From the east, it is joined by a second area, framing the Caribbean coast, a wide strip of lowlands known as the Mosquito Coast. The Caribbean coast of Nicaragua is low-lying, mostly swampy and abundantly overgrown with mangrove forests and almost impenetrable jungle. This area has never attracted the attention of the Spanish conquistadors for its fertile farmland or gold deposits, therefore, areas of flora and fauna characteristic of pre-Columbian America have been preserved here.

The third area is formed by the lowland stretching along the southern land border of the country across the isthmus from the Gulf of Fonseca to the southeast to the Caribbean coast, and the fourth — volcanic zone of western Nicaragua, with numerous active volcanoes. The latter is the most populated, both because of the fertile volcanic soils, and because of the more favorable — dry and not as hot as on the east coast — climate.

Most of the means of transport and communication is concentrated in the western part of Nicaragua. Intensive construction of roads began in the 1940s, now their total length in the country is about 30 thousand km, mostly without hard surface.

Because the east coast has a rainy season for nine months out of twelve, and there are practically no paved roads, the east coast is cut off from the western part of the country for most of the year. The local population uses local rivers for movement, which abound in the east of the country.

Nicaraguan culture is a mixture of Spanish and Amerindian heritage. Most Nicaraguans continue to honor the Indian gods and preserve the traditions of their ancestors, mixed with elements of the colonial era. Such cultural genres as dances, music, literature and painting are widely developed. Every year Nicaragua hosts international festivals of jazz and poetry.

Pride of Nicaraguan culture — the poet Ruben Dario (1867-1916), the founder of Spanish-American modernism, who had a great influence on the development of Spanish-language poetry. The direction of Nicaraguan painting in the "naive" style is world famous.

Each locality in Nicaragua celebrates the day of its guardian angel once a year — "Fiesta Patronal". During one of these holidays, for example January in San Sebastian and July — in Santiago, you can see a lot of colorful folklore performances and masquerade processions. Mass religious processions take place during Holy Week, among them the processions in the former capital of Nicaragua, Leon, stand out for their scope.

The distinctive people of Nicaragua are very proud of their roots — they are all descendants of the mysterious tribes of the pre-Columbian era. The extraordinary temperament inherited from the Spanish colonialists, sociability and hospitality form the basis of the national mentality. The guest is greeted very cordially, while often setting the table for the last savings.

The church plays a huge role in the life of the local population, but this does not prevent Nicaraguans from honoring Indian gods, celebrating pagan holidays and using traditional musical instruments made from animal horns.

Power

State of Nicaragua — presidential republic. The head of state and government is the president, who is elected for a term of 5 years. In October 2009, the Supreme Court of Nicaragua overturned an article of the Constitution that limited the presidency to a single 5-year term.

The highest legislative body of the country — unicameral National Assembly of 92 deputies. 90 deputies are elected by direct universal suffrage for a 5-year term; of which 20 — according to the national list, 70 — from districts and autonomous regions. The deputies are also the president who ruled the previous five years, and the presidential candidate who received the largest number of votes after the winner in the last election.

Economy

The basis of the economy of Nicaragua is the agricultural industry and, to a lesser extent, the mining sector. Industrial production is represented by sewing enterprises concentrated in "free economic zones" and metalworking. Main export commodities: meat, coffee, gold, peanuts, sugar, beans, tobacco, dairy and seafood.

The main exports are cane sugar, citrus fruits, coffee, bananas and tobacco. The main food crops are beans, rice and corn. The main branches of animal husbandry are cattle breeding and pig breeding.

Nicaragua is poor in explored minerals. Salt, gold and silver are mined (previously copper was mined). The manufacturing industry is based on the processing of agricultural raw materials and the food industry. There is also an oil refining industry.

The main part of electricity is produced at fuel oil and diesel thermal power plants. However, there are two HPPs in Chinandega Department with a total installed capacity of 98 MW, in Rivas Department — two wind farms with a combined capacity of 80 MW, on top of the Momotombo volcano since the 1980s. there is a GeoPP, another small GeoPP operates in the San Jacinto Tisate area.

As of 2022, Nicaraguan merchandise exports reached $3,651.8 million, up 11.1% year-on-year from 2021, according to the Nicaraguan Export Processing Center.

According to the release, Nicaragua ships to 125 countries with markets in Latin America, the Caribbean, Europe and Asia.

In 2022, the country exported $1,653.5 million worth of gold, coffee, beef, tobacco, beans, cheese, and lobster to the United States of America in 2022.

In the Central America and Caribbean region, Nicaragua has exported goods to El Salvador, Guatemala, Honduras, Costa Rica, Panama, Puerto Rico and the Dominican Republic. The main export commodities included beef, coffee, gold, cheese, beans and alcoholic beverages, among others.

Average GDP growth rates over the past 25 years — 3.7% per year. In 2022 — 4.3% (according to the results of the 2nd quarter). It is believed that Nicaragua's GDP is decimated by two crises of the 21st century — The Great Recession of 2009 and the coronacrisis.

The country has adopted a National Plan to Combat Poverty for 2022-2026 and a plan for production, consumption and trade. The latter was launched at the end of 2022, and among its main landmarks — increasing labor productivity and training the agricultural workforce.

In 1999, a "free economic zone" was created in the country; ("Zona de Comercio Justo"). In 2006, a Free Trade Agreement was signed with the United States and Central America. On February 23, 2007, Nicaragua joined the Bolivarian Alliance for the Peoples of the Americas (ALBA).

Nicaragua is an active participant in the integration processes in the Central American region and is a member of the Central American Integration System organization; (Sistema de la Integración Centroamericana, SICA), consistently developing trade and economic relations with other states of the Central American isthmus. Nicaragua is also a member of the Commonwealth of Latin American and Caribbean States (Comunidad de Estados Latinoamericanos y Caribeños, CELAC).

On December 10, 2021, the country restored diplomatic relations with China, broken in 1990, on January 13, 2022, a memorandum of cooperation was signed between Nicaragua and the One Belt project one way».

From 2022, the IRI (Food and Agriculture Organization of the Poor Nations) supports the National Rural Investment Program of Nicaragua 2022-2031, aimed at reducing poverty and achieving sustainable development. In particular, it supports investments in the dairy and coffee value chains. The country attaches great importance to the implementation of this Initiative, and it is expected to continue work on it in 2023. The "Wide Milk River" is designated as its priority areas. (Vía Láctea Ampliada) for the dairy industry and the "Northern Coffee Production Zone" for coffee.

Nicaraguan Canal

Nicaraguan Channel — a grandiose project to create an alternative to the Panama Canal in Central America.

The alternative channel was supposed to be twice as wide and deeper than the Panama Canal, which would significantly relieve maritime traffic. The length of the route is 278 km. The canal was promised to be built by the Chinese company HKND in 2014. For Nicaragua, one of the poorest states in America, the significance of the project can hardly be overestimated. Although the canal would have belonged to the Chinese, the treaty provided that the route would become the property of the Latin Americans after 50 years. China also allowed the participation of Russian investments. The essence of the program was to use the Nicaraguan canal for the transportation of Venezuelan oil by the Chinese, which is 70% owned by Russian oil companies.

The idea met with fierce resistance from the United States and local opposition, which opposes the actual sale of land to China. The collapse of the stock market in the Middle Kingdom in 2015-2016 added to the problems, there was not enough money for expensive projects. By 2017, the HKND company went bankrupt, official Beijing stopped supporting the project. The Panama Canal remained the only short route between the Pacific and Atlantic oceans.

Today, due to the political situation in the world, there is a very high probability that the Nicaraguan Canal project will be resumed. At a press conference following his visit to Nicaragua, Russian Foreign Minister Sergei Lavrov said that Russia was interested in the project, which was planned by the Spanish conquistadors and which would make Nicaragua a prosperous transit country.

Ties with Russia

Bilateral trade and economic relations were mainly developed in the 80s of the last century during the first time the Sandinistas were in power. The trade turnover between Russia and Nicaragua in 2019, according to the Federal Customs Service (FCS) of Russia, amounted to 67.9 million US dollars (an increase of 26.7% compared to 2018). Russia's exports to Nicaragua amounted to $51.9 million, and Russia's imports from Nicaragua — 16 million dollars. In the structure of Russian exports to Nicaragua, the main share of deliveries falls on food products and agricultural raw materials, chemical industry products, metals, machinery and equipment, and mineral products. The structure of Russian imports from Nicaragua consists of food products and agricultural raw materials.

 Since 2017, the Russian-Nicaraguan joint venture Mechnikov has been successfully operating in Managua. for the production of influenza vaccines. In April 2019, commercial production of this drug began.

 Practical cooperation is developing within the framework of an agreement between the Government of the Russian Federation and the Government of the Republic of Nicaragua on cooperation in the exploration and use of outer space for peaceful purposes. In April 2017, the ceremony of commissioning the first Russian GLONASS ground station in Central America took place in Managua.

The cooperation between the subjects of the Russian Federation and Nicaragua is developing further. In particular, through the dealership in Managua «Samtok — Autos Rusos» Russian company OOO «Echo-export» (Privolzhsky Federal District) deliveries of engineering products of UAZ enterprises continue (off-road vehicles), "KAMAZ" (garbage trucks) and "GAZ" (trucks) and construction equipment. In 2017, a framework agreement of intent was signed between the Southern Federal University and the National University of Nicaragua. Since 2018 LLC "Ruzoil Promproekt" (Central Federal District) manufactures composite rebar in Nicaragua, which is supplied to various construction sites in the country. As a result of negotiations between the Nicaraguan delegation and the leadership of the administration of the Siberian Federal District and the Novosibirsk Region, in 2018, the Nicaragua trading house was opened in Russia, which supplies Nicaraguan coffee to Russia.

In addition, the intergovernmental commission on trade, economic, scientific and technical cooperation is working productively, joint projects are being implemented in the field of healthcare and space, overcoming the consequences of natural disasters, training and advanced training of personnel. On March 29, 2023, an agreement was signed in the capital of Russia on cooperation between Moscow and Managua in the field of the use of atomic energy for peaceful purposes.

Following the meeting of Nicaraguan Foreign Minister D. Moncada and Russian Foreign Minister S. Lavrov at a press conference in Russia — S. Lavrov stressed that Moscow and Managua have a very good basis for a qualitatively new stage in the development of economic and investment relations and "our bilateral strategic partnership." Lavrov also noted that during the talks, the parties expressed satisfaction with the supply of automotive equipment, fertilizers, food from Russia, and cooperation in the implementation of transport infrastructure projects.

Business climate

Company registration in Nicaragua

Which legal form should I prefer?

Overview of the main organizational and legal forms:

Establishment (branch of a foreign company established in one of the legal forms listed below)

• Separate legal entity
• Limited company or spin-off of business operations in Nicaragua
• When establishing a permanent establishment in Nicaragua, its profits are subject to income tax in accordance with the laws of Nicaragua
• To form a company, it is necessary to submit accounting reports prepared in accordance with the laws of Nicaragua to the Registrar of Companies. All reports are confidential unless one of the partners requires them to be made public during the course of the trial.

Anonymous partnership

• Provides disclaimer and highlighting of Nicaraguan business operations
• Provides a long-term view of local business
• Partnership profits are subject to income tax
• Can be considered as national despite being created abroad
• Must be registered with the Registrar of Companies and the municipality
• There must be a legal representative in the country

Joint Limited Partnership

• As a rule, it is created by several participants (partners) between whom there is a high degree of trust
• Members are jointly and severally liable, but may limit their liability
• Accounting statements are not disclosed

Limited Liability Partnership

• Some partners are personally and equally liable, while others — liability in the amount of their shares.
• Profits are shared equally.
• It may be necessary to provide a guarantee for joining, as the partner covers the company's debts if necessary.
• The financial statements are not disclosed.
• The company must be registered with the Registrar of Companies and the municipality.

Investment climate

Why is it profitable to invest in Nicaragua?

• Tourists visit the country.
• Foreigners can freely purchase property in Nicaragua.
• This is the cheapest land in Central America.
• Instability in the country gave rise to a period of large discounts.

Nicaragua offers citizenship and residency by investment, the citizenship by investment (CBI) program in Nicaragua allows foreign investors to obtain a second citizenship and passport in exchange for financial investment in this country. This is usually done in the form of a charitable donation or real estate purchase. After the investment is made, the investor is granted citizenship and a passport of the country in a short time.

Business and investment support structures

The Government of Nicaragua is committed to creating a favorable investment environment and attracting foreign investors, which is reflected in a number of laws and programs aimed at supporting investors and facilitating the investment process.

The country has several laws that are designed to support investors and facilitate the investment process.

• One of these laws — Law on National and Foreign Investments (Ley de Inversiones Nacionales y Extranjeras), which was passed in 2000. This law creates a favorable environment for investment, providing investors with equal rights and protection from arbitrary actions by the government or other institutions.
• In addition, there is a law on tax incentives for investments (Ley de Incentivos Fiscales para la Inversión), which provides tax incentives and credits for taxes on income, property and other types of tax liability in order to attract foreign investors.
• Nicaragua also has a Free Trade Zone Law (Ley de Zonas Francas), which provides investors with a number of benefits, such as tax incentives, exemption from customs duties, and other incentives to attract foreign investors.
• Finally, Nicaragua also has a Foreign Investor Guarantee Law (Ley de Garantías para los Inversionistas Extranjeros) which ensures that the rights of foreign investors are protected and provides mechanisms to resolve any disputes that may arise between investors and the government .

There are several authorities and organizations in Nicaragua that support foreign investors and work to create a favorable investment environment in the country.

One of the main authorities involved in supporting investors is the Investment Promotion and Export Agency (PRONicaragua). It was created by the government of Nicaragua to promote and attract foreign investment in the country. PRONicaragua provides advisory support, assistance in obtaining permits and licenses, as well as information on tax incentives and other benefits for investors.

Nicaragua also has the Confederation of Associations of Entrepreneurs (COSEP), which represents the interests of the business community and works to create a favorable investment environment. COSEP works with the government and other stakeholders to improve the business and investment environment.

In addition, there are industry associations such as the Association of Textile and Clothing Producers of Nicaragua (ANITEC), the Association of Coffee Producers of Nicaragua (PRODECOOP) and others that work to develop specific sectors of the economy and facilitate the process of investing in these sectors.

There is also a Trade Representation of Russia in the country. The sales office is located in Managua. The activities of the trade mission are aimed at developing economic ties between Russia and Nicaragua, promoting Russian export projects and attracting investments and advanced technologies to the Russian Federation.