DOING BUSINESS IN NICARAGUA

Investement Framework

Business Climate
Financial and Fiscal System
Commercial entities
Investors Rights and Investment Laws
Trade Agreements

Trade Agreements

Central America- Dominican Republic and the United States of America Free Trade Agreement (DR-CAFTA)

Ratified by the government of Nicaragua on October 10, 2005 and by the United States of American on July 27, 2005. it was entered into force April 1, 2006.

This treaty consolidates and broadens the scope of benefits obtained trough the Caribbean basin initative. It improves the region´s potential for economic growth, and streamlines attraction of direct foreign investment, turning the region into a platform where foreign investors can access United States of America markets form Central American territory.

The Importance of the United States of America as Nicaragua’s Main Trading Center

The United States of America is Nicaragua´s main trading partner. A brief reference of its importance as trade partner reinforces the strategy that clarifies the fact that we cannot significantly increase our exports without relaying on a clear and safe framework of export facilities within our country. The United States of America is our major trading partner in terms of exports and imports, as well as foreign direct investment.

The trade balance between Nicaragua and the United States of America registered a positive growth on exports, 4.4% in 2005 in relation to 2004.

Balance of Trade Nicaragua / United States of America 2003/2004 (millions of U$)

Years	2004	2005	Growth 2004/2005
Exports	263.4	275.0	4.4
Imports	489.8	522.0	6.6
Balance	-226.4	-247.0	9.1

DR-CAFTA Objectives

• Consolidate and expand the Caribbean basin initiative
• Diversification of the available export offer
• Develop attraction for direct foreign investment
• Benefits to consumers with commercial opening
• Improvement of import conditions
• Elimination of non-tariff barriers in our regional trade toward the United States ,of America
• Quotas
• Promotes the applicability of national laws
• In-depth Central American Integration
• Chain-reaction with other free trade agreements
• Dominican Republic included in DR-CAFTA
• Intra-regional trade facilitation

Nicaragua´s Offer to the United States of America:

• Immediate access to 80% of industrial imports from the United States of America
• Free access for 55% of our agricultural trade with the United States of America, plus access through import quotas for 25% of our current agricultural imports
• Access to an equivalent value of 5% of our current trade through milk, pork and corn quotas
• In total, including additional access, Nicaragua offered immediate access to 85% of our current trade with the United States of America

Excluded goods: White corn for Nicaragua, sugar for the United States of America.

Quotas: Guaranteed minimum access for a product that allows the entry of certain volume of goods for a determined period of time with preferential rates.

 

For further information, visit the webside: http://cafta.mific.gob.ni

Central America – Chile Free Trade Agreement

Signed in Guatemala on October 18, 1999, specific negotiations are still pending.

Bilateral signatures are also awaiting; which include listings for tariff phase-out, rules of origin, and reserves in the service chapter, contemplated in an arrimetri treatment reflected in it's desgravation calendars.

Central America - Dominican Republic Free Trade Agreement

It was signed by the Presidents on April 16, 1998 in Santo Domingo, Dominican Republic. It went into effect on September 3, 2002.

Main Products Benefited

Fruit and vegetables, footwear, beef and processed or canned food.

Free Trade Agreement with Mexico

A bilateral agreement that entered into effect on July 1, 1998, Decree n.º 48-98, dated June 26, 1998, La Gaceta, Official Bulletin n.º 121, dated June 30,1998.
It encompasses, preferential treatment granted to Nicaragua.

Main Products Benefited

Beef, beans, fish, shrimp, fruit and vegetables

Negotiations in Process

• Free Trade Agreement Nicaragua - Taiwan
• Free Trade Agreement Central America - Panama
• Free Trade Agreement with Canada
• FTAA: Free Trade Area of the Americas

Partial Scope Agreements

• Colombia and Venezuela
• Preferential Treatment Agreements
• Caribbean Basin Initiative and the Caribbean Basin Trade Partnership Act (CBTPA)

The agreement known as the Caribbean Basin Initiative (CBI) is a unilateral program for tariff benefits granted by the United States of America to Central America and the Caribbean. This initiative has played a key role in streamlining trade and economic developments in the region. The program’s main objective is to increase investment, both national and foreign, in non-traditional sectors to diversify economies in the region’s countries and increase their exports.

The most recent legislation of the Caribbean Basin Initiative (officially known as the Caribbean Basin Trade Partnership Act – CBTPA), went into effect in October 2000, and allows clothing manufacturers a list to assemble in Central America and the Caribbean, import raw fabrics from the United States of America to be processed in a regional country, and manufacture clothing. These are exported tax-free entry for other products assembled or manufactured in the region, as long as they comply with the basic requirements of the country of origin.

Expansion of the CBI has increased commercial benefits in the original law initiative for the Caribbean Basin, in effect since October 1, 2000 up to September 30, 2008, or until the FTAA enters into effect.

Cámara de Agentes Aduaneros (CADAEN) : Nicaraguan Customs Agents Chal11ber (CADAEN) Bello Horizonte Rolter 2 c. al Sur 40 m. al Oeste Módulo n.º 5 Tel.: (505) 249-6998 cadaen@ibw.com.ni

Cámara de Industria Nicaragüense - Alemana  German Chamber of Industry in Nicaragua: Cine Cabrera 2 c. al Este Edificio La Merced Local n.º 6.
Tel: (505) 222-7829, 222-7075 - Fax: 222-7054 cicna@munditel.com.ni

Cámara Oficial Española de Comercio de Nicaragua: Spanish Official Chamber of Commerce in Nicaragua  Los Robles Restaurante Marseillaise ½ c. arriba Tel.: (505) 278-9047 - Fax: (505) 278-9088 gerencia.camacoes@cablenet.com.ni  camacoesnic@cablenett.com.ni

Cámara de la Pesca de Nicaragua (CAPENIC): Nicaraguan Chamberf of Fisheries (CAPENIC) Camino de Oriente Módulo B-2 7 Y 8 Tel.: (505) 278-7091 capencic@ibw.com.ni

Cámara Nicaragüense de la Construcción (CNC) Nicaraguan Chamber of Construction (CNC): Bolonia Aval Card 2 c. al Oeste 10 vs. al Sur  Tel.: (505) 2663363 -Fax: (505) 2683327 cncsecre@ibw.com.ni