5 Things to Know Before Investing in Nicaragua

Posted by Addison Craig on Jun 8, 2020 5:05:11 PM

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The Las Perlas Oceanfront Village at Gran Pacifica

Over the years Nicaragua has been on the up and up and has been morphing into what Costa Rica once was all those years ago, before it became the popular vacation destination it now is. Globally people are realizing that and are trying to take advantage of the opportunity to buy in the area, but unfortunately sometimes things can go wrong. You need to remember that this is a different country and therefore you need to do a bit more research than you regularly would when making an investment in your home country.

It can be a scary thing to buy property or invest in a country that you have never done so in. It’s easy enough for someone to tell you that it’s the smart thing to do but the execution can be difficult and it may lead you to unfavorable situations if you do not do your proper research. We’ve put together a list of 5 things that are important to understand before starting the process of buying real estate in Nicaragua in the hopes that you can start your research here and then move forward to finding your perfect property, and hey, maybe it will even be at Gran Pacifica.

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The view from one of the residences at Gran Pacifica

 

1. Restrictions are minimal 

One thing that can surprise people is that in general foreigners are not going to find themselves restricted in many ways in what they can buy or how they can do it. The only real restriction to mention is one that concerns border security. Foreigners cannot buy within 5 KM of any international border, and if they would like to buy anywhere between 5 KM – 15 KM they must get an approved permit. Realistically in Nicaragua there are so many other places to buy, be that in the forest or by the ocean, that are not within 15 KM of any border. Basically, this small restriction becomes inconsequential once you really look at what the rest of the country has to offer and at the price at which you can get oceanfront property in the country.

In the last decade Nicaragua privatized most of its monopolies which has made for a largely reduced amount of government intervention for foreign investors. The law allows for 100% ownership in every economic sector, and actually once you look further it’s clear that the policies that are put in place by the government are actually there to encourage foreign investment.

 

2. The government wants foreign investment

In some countries you may find that there are hoops and hurdles to navigate with the government when wanting to buy property as a foreigner, but Nicaragua actually incentivizes it because they understand what this type of foreign investment can do for the country. In April of 2000, the Nicaraguan government put into place Law No. 344 which is the Law for the Promotion of Foreign Investments. This law was put into place so that foreign capital and domestic capital could be regarded as equal and it recognizes the foreign investor’s right to own and use property without limitation which cannot be said for other countries. Law No. 344 promises the following to foreign investors:

  • No minimum or maximum investment amount to qualify
  • Full currency convertibility
  • Access to financing in Nicaraguan banks
  • Full international ownership
  • No discriminatory treatment against your investment
  • Full protection of intellectual property rights, patents, and brands
  • Freedom to expatriate all capital and profits

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One of the beautiful residences at Gran Pacifica

 

3. You will need a realtor/ consultant

In Nicaragua you will not have the luxury of being able to find all available listings on a website like MLS, so unless you are familiar with Nicaraguan real estate and can speak Spanish fluently, it would be smart to hire a realtor. This person is incredibly important for the whole process and they can make or break the experience so be sure to do your due diligence on who you decide to go with. Find someone who you can trust and as well who has been trusted by others in the past.

 

4. Pick the right attorney

In Nicaragua, rules regarding conflict-of-interest are essentially non-existent, so it is important that you know who you are working with. An attorney that you have hired for yourself could be working for the seller at the same time, and not only that but they do not need to disclose this to you even if you ask them directly. Just like any other investment you do anywhere in world you need to do your due diligence and be cautious.

The attorney is essential though as there can be issues in Nicaragua where people attempt to sell properties that they do not actually own the title rights to. This is where an attorney would step in and protect you from these cases. The main rule of thumb is do your due diligence and you will be fine.

CincoAmigosPool (1)The pool at one of the Gran Pacifica residences

 

5. Fees you can expect when the purchase is finalized

As with any purchase of property there are fees associated when everything is finalized. Listed we have a few of the generalized ones:

  • Attorney fees
    • These will be 1% - 1.5% of the purchase price
  • Title Registration fees
    • 1% of the cadastral value with its maximum amount being 30,000 Cordoba (about $870 USD)
  • Transfer Tax/ Property Gains Tax
    • If the property is under $50,000 this will equal 1% of the total
    • If the property is between $50,000 and $100,000 this will equal 2% of the total
    • If the property is between $100,000 and $200,000 this will equal 3% of the total
    • If the property is over $200,000 this will equal 4% of the total

 

Start looking!

Realistically there are differences in all countries when it comes to the purchase of property and especially that in which is being done by a foreign entity; Nicaragua is no different. If there is any time to invest in this blossoming country, it is now. If you are a potential expat, there are many communities for you to feel right at home in, and if you’re looking for a vacation property, there are waterfront homes for a fraction of what they would cost in the United States and Canada.

If you have any questions, please feel free to contact one of our Property Consultants so that they can get you started on the path to success! And if you are a realtor wanting to dip their hands into the world of international real estate, feel free to contact our International Referral Real Estate Program for more information!

 

 

If you’re the type of person who plans their trips and vacations to a tee, then these are expeditions and experiences that you be sure to add to your itinerary; a trip to Nicaragua wouldn’t be complete without them. While you’re stuck at home, imagine yourself going to places like these and imagine yourself soaking in the outdoor air. But then make those dreams a reality in your near future.

If Nicaragua interests you, a free handbook with additional information can be found here

 

 ECI Development delivers affordable luxury residence and resort communities in Central America, providing our clients with various premier lifestyle options from the Caribbean to the Pacific. ECI delivers inspired residences for adventurous souls.

Coupled with over 20 years of inherent corporate social responsibility in the communities where we work, ECI Development is building a sustainable business that is going to be around for the next 100+ years.

Addison Craig

Written by Addison Craig

Addison Craig is a Communications Intern with ECI Development who is getting to experience the charms of Central America first hand. She graduated from The University of Victoria with degrees in Sociology and Environmental Studies. In her free time she enjoys exploring wherever it is she finds herself and practicing yoga here and there.

Topics: Nicaragua, Investing in Nicaragua, Real Estate in Nicaragua, Vacationing in Nicaragua, buying land in Nicaragua, moving to Nicaragua, Real Estate in Central America, Real Estate in Latin America