Coastal Dreaming

Good data points for property and business investors in Nicaragua.   

Straw Bale construction workshop coming to Nicaragua in April!  Slide show of a workshop from Sept 2010:

More tourists came to Nicaragua in 2010 than ever before, and the country continues to gain in status as an outstanding place to visit, retire and live. These developments are supported by Nicaragua’s growing economy and increasing international investment in the country. 

A few stats:

• 1.01 million foreign visitors came to Nicaragua during 2010, an increase of 8.4 percent over the previous year in which a gain of over 8.6 percent was recorded
• The average stay was 7.3 days, and income generated from tourism was expected to rise nearly 5 percent to $360 million
• Approximately 60 percent of tourists came from Central and South America in 2010, with the remainder from the United States, Canada and Europe.

Yet another sign of the tremendous investment potential of Nicaragua.  See the full article here.

1. 1 million Tourists in 2010

2. New Marina Development

3. A New Airport scheduled for development

4. A Vacation rental site focused on Nicaragua

5. The First Season of Survivor Nicaragua

6. A World class surf company stations in Northern Nicaragua

7. The Global Peace Index

8. Government sponsored tourist marketing program

All great signs of how things are changing in this amazing country even with the down economy.

National Geographic Article:

In two small villages on Nicaragua’s Mosquito Coast, a project to improve electricity service had a remarkable side benefit—household energy use actually dropped nearly 30 percent. When efficient compact-fluorescent (CFL) light bulbs were added to the mix, energy savings surpassed 40 percent.

The effort cut costs and brought longer hours of daily electricity service to the people of Orinoco and Punta Marshall, while demonstrating how improving energy access to poor people around the world can go hand-in-hand with reducing fossil fuel emissions, say the authors of a new study.

“It shows that you can meet development objectives for the poor and climate objectives for all of us at the same time,” said Daniel Kammen, chief technical specialist for renewable energy and energy efficiency at the World Bank, and co-author of an analysis published Thursday in the weekly journal Science.

Read the entire article here.

The approximately 76 million members of the baby boomer generation show a great interest in retiring to Central America. Most of these retirees will head for Mexico, Costa Rica, Nicaragua, Panama, Colombia, Belize or Brazil, all of which have beautiful beaches that thousands of Americans have already discovered.

But only a few of these countries are focused on developing a state-of-the-art national infrastructure. One that is likely to develop into a strong economy, with a burgeoning tourism market, yet boasts affordable property prices today that stand to increase many times in the near future. The one country that does have this is Nicaragua. Here’s why Americans will start retiring to Nicaragua:

Bargain house prices
About two hours from Managua and half an hour from the Costa Rican boarder, the foundations are being set for a jet-set oceanfront destination in a small fishing village called San Juan del Sur. This peaceful pueblo holds the attraction of being close to major towns, accessible to tourism, has delicious restaurants, gorgeous beaches close-by, and an affordable quality of living. Beachfront home sites start at $125,000 and ocean view homes as low as $150,000.

Beachfront availability
Whether in California or Florida, beach front property is always a valuable investment. Nicaragua is no different. Most of the current retiree’s who have purchased there plan to live in the US for the summer months and escape to their Nicaraguan getaway for the winter. They are always shocked and delighted to hear that it would cost them about 1/20 the price of buying a frontline beach house in Florida to buy a similar property in Nicaragua.

Domestic help
American retirees to Nicaragua can afford a standard of living that they could never imagine having in the United States. Live-in maids for example cost less than $200 a month in many parts of the country. Some homeowners have sent their maids to culinary courses so they can learn to be gourmet cooks as well. Having someone to cook a gourmet meal, clean after a party, take out the trash, pick up the groceries, and do the laundry means that homeowners can truly enjoy their retirement, and spend more time on the beach!

Healthcare
Indeed, foreign residents, expatriates and tourists are finding that the quality of health care in Nicaragua far exceeds expectations. You can find excellent
personalized care as well as highly-trained, English-speaking doctors and state-of-the-art facilities. Most people are truly amazed at the diversity and level of quality care you can find if you know where to look.

High-quality care is not only accessible in country, but reasonably priced as well, with a wide range of coverage options for foreigners that can cover everything from maternity costs to international MedEvac insurance (which costs about $250 a year) to ensure that in case of an emergency (such as the need for open heart surgery) you’ll be airlifted by jet to Houston or Miami from Nicaragua. Even out-of-pocket health expenses are uncommonly affordable by international standards. Inaugurated May 31, 2004, the $23-million Hospital Metropolitano Vivian Pellas is being billed as the most modern, state-of-the-art private hospital in all of Central America.

Vibrant culture
Nicaragua’s myriad cultures and traditions make it a fascinating and rewarding place to live. Active retirees can look forward to local festivals, holidays, eco tours, surfing, sports fishing, golf, tennis, horse-back riding, and of course, deserted beaches—in other words, Nicaragua offers much more than a 55yr+ gated community in the desert.

Investment potential
While prices in Costa Rica, Panama, and Belize have already peaked, Nicaragua has an excess of available oceanfront property. A basket of recently passed measures mean that prices will rise soon. Developers are buying beachfront property and investing hundreds of millions of dollars into small and large projects. Buying in Nicaragua today is similar to buying property in Costa Rica in the 1980s. Prices can only move up from here.

Safety
Safety in Central America is only a challenge in certain well-known dangerous areas, namely, the slums of El Salvador and Guatemala. A recent study by the Inter-American Institute on Human Rights and a survey of police forces in the Americas show that Nicaragua is the safest country in Central America and one of the safest countries in the world. Recent studies also point to Nicaragua’s low reported crime rate — lower than in Germany, France or the U.S.

Distance and access
Nicaragua is closer than you might think – a short 2 hours by plane from Miami, 3 hours from Houston, and less than 6 hours from Los Angeles. And anyway, getting there is half the adventure—since you’re saving so much on property prices, why not fly first class?

Other Articles in this Series:

Reason #1 – Tourism

Reason #2 – Infrastructure Investment

Reason #3 – Investment Incentives

Reason #4 – Human Capital

Reason #5 – Market Access

Reason #6 – Legal Framework

With Nicaragua’s recent media fame from the reality TV show Survivor, there is a definite uptick on people looking a little more closely about this central American country.  Here is a short video talking about the perceptions about Nicaragua and reality.  You will mind many of these items scattered through our blog archives, and this offers a nice summary.

A nice video put together by the PRONicaragua Tourism Directive.  The beauty and diversity of the country is amazing and still relatively unknown, making it a great offshore investment opportunity.

Pretty interesting video on how the port of San Juan is expected to build out.  Its amazing the transformation this little town is going through and the upcoming Survivor series will only accelerate that. 

Law for the Promotion of Foreign Investment (Law No. 344)

The main legislation that governs foreign investment consists of Law No. 344 for the Promotion of Foreign Investments and its bylaws, as well as other sector-specific laws that provide incentives for investment.

Law No. 344 provides: a) equal treatment of foreign and domestic investment; b) eliminates restrictions on the way in which foreign capital can enter the country, and c) recognizes the foreign investor’s right to own and use property without limitation, and in the case of a declaration of eminent domain, to receive proper indemnification.  The law makes no distinction between acquisition, merger, takeover, or green-field investment. There are no restrictions in Nicaragua on converting or transferring funds associated with investments. Many transactions are freely and fully conducted in U.S. dollars. Remittances of investment capital, earnings, loan repayments and lease repayments are freely allowed through the private foreign exchange market operated by local financial institutions. The Law also contemplates:

• Total currency conversion
• Freedom to repatriate all capital and profits
• There is no pre-established minimum or maximum investing amount
• 100% international ownership permitted; there is no discrimination against foreign investors, whether it be on total ownership of the company or as shareholders.
• Prompt and fast depreciation of capital goods.
• National loans are accessible through local banks, according to their terms of approval.
• Property protection and security. The Nicaraguan law recognizes and guarantees the legal rights of national or international investors, property rights and the right to dispose freely of the goods, capital and the profits of the company (everything as established under the law).

On-going reforms of the judicial system and administrative procedures are expected to continue to improve the business climate and help attract increasing amounts of foreign investment into Nicaragua. Recent government actions have included successful performance under an IMF program that required a significant reduction in the budget deficit and provided new resources and debt relief; opening a "one-stop office" for investors in the Ministry of Development, Industry and Trade (MIFIC), and completion of a decade-long privatization program.

Nicaragua is a member of the Central American Agreement for the Protection of Industrial Property, and there is full protection under the law for intellectual property, including patents, trademarks and brand names. Nicaragua is also a member of the World Trade Organization and therefore adheres to the Agreements on the Trade Related Aspects of the Rights of Intellectual Property.

Nicaragua’s banking policies enable the free flow of financial resources to the private sector. Options to obtain credit include commercial and industrial loans, various types of credit lines, factoring, leasing, and bonded warehousing.

The Country has signed and ratified a total of 19 bilateral investment agreements with Mexico, Spain, Taiwan, Denmark, the United Kingdom, the Netherlands, Korea, Ecuador and the Dominican Republic, among others. The U.S.-Central America Free Trade Agreement (CAFTA), includes investment protection obligations that supersede provisions of traditional bilateral investment agreement.

Mediation and Arbitration Law (Law no. 540)

• The Law governs two methods alternate to the judicial process (Mediation and Arbitration) to expeditiously solve any dispute resulting from contractual relations.
• It can be used by both national and foreign investors, and by the State of Nicaragua to resolve differences on property and non-property assets.
• It applies both nationally and internationally, without detriment to the treaties, Conventions, covenant or any other instrument of International Law subscribed by Nicaragua.
• In the arbitration proceedings, the Court shall be composed of highly trained professionals who have special expertise in the area relevant for resolving the dispute, who are freely chosen by the parties, under the procedures previously agreed upon by the parties, and without their nationality being an impediment to act as such, unless the parties have so decided.
• Unless otherwise agreed by the parties, the maximum time established by law for the Arbitral Tribunal to issue its final award is 6 months starting from its creation date.
• Agreements reached by the parties through a Mediation process as well as arbitration awards resulting from an Arbitration process are final and enforceable without delay under the rules established by the Code of Civil Procedure of Nicaragua.

Other articles in this Series:

Reason #1 – Tourism

Reason #2 – Infrastructure Investment

Reason #3 – Investment Incentives

Reason #4 – Human Capital

Reason #5 – Market Access