Increasing Chaos and Frustration Within FSLN Sandinista Party - A Time to Buy Real Estate in Nicaragua?

peterchristopher's picture

Sandinistas continue to confiscate properties in Nicaragua by quasi-legal means and also by mob vigilante squatting. Even Sandinista party financial supporters, however, are becoming the victims of the quasi-legal actions. When questioned by loyalists, Ortega and those close to him now respond that his own party is no longer answering to him and even he cannot stop the squatters. Is this the sign of the self-destruction of the Dictatorship of the Ortega-Mafia FSLN?

Can we now trust the real estate agents who claim that Nicaraguan property values are not down and there is no risk in a careful purchase of Nicaraguan beachfront property, like this gringa real estate agent in Nicaragua?

What can this mean when we contrast it with the image portrayed by leftist filmmakers in propaganda reels like the following, which pit the Ortegas as good guys against the bad guys of the Somozas, U,S., Chamorro, etc?

If unable to view video, click here for Sandinista Siempre to view at vimeo site


Unfortunately for those who are wishing that there remained an undiscovered paradise somewhere safe to invest their nest-egg, there is no longer any such place, and certainly not Nicaragua, and certainly not now. Whether the Ortegas are toppled or not, what remains certain is that there is no commonly accepted social contract in Nicaragua, and won't be anytime soon. There will always be those leftist "Sandalistas" like the filmmaker who produced the above who only talk to one set of people, who continue their symbiotic adulation/victimization relationship with the Communists on the surface level, and there will always be mob anarchy in Nicaragua underneath it that impoverishes its people economically, psychologically, educationally, and spiritually. If you would like to feed that, go ahead, it will take as much money or energy as you wish to sacrifice. But those future-dated checks will bounce.


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Defend it

yes you do as you would in any other country. Someone always wants what you have and will find one way or another in getting it.
You need to be on your toes, be smart, buy what you need , remember this is a poor country so if you buy a lot for your dream house and buy 20 more to invest, then maybe you are pushing it. You have to remember to give back and be a part of the community as well.
I fear US Banks...they too take your stuff and you need to defend yourselves from those woves too.....

Remember "Like is a Beach"


Committed To Nicaragua

Peter...You know me, I will always search for the positive. I also accept the negative but do not dwell on it.

Always nice to have diverse opinions

Having well-articulated differing opinions is so important. Maybe I'm right, maybe I'm wrong, maybe Jorge or Kevin is right or wrong, maybe we're all partly right, or maybe it's just a dice roll. Good that we have it out there. Kevin, not more than 10 miles south from your property still in Diriamba municipality, the local Sandinistas are squatting and stealing cows left and right at the bottom, just as the Ortegas are stealing foreign aid Somoza-style at the top. Have you not heard about that in the past month? However, problems though there may be, it could be worse. Freedom of expression, (as you point out) though not as embraced as in the states, is not as suppressed as in China or some other countries. And you're certainly right that the right of foreigners to visit and own property in Nicaragua has its appeal. Of course, then you have to defend it.

Good Article, Peter!

I am no expert, nor do I have an agenda. I am just a person with an opinion. You confirmed what I have felt for quite some time. It's crazy to buy property in Nicaragua. I always say, never gamble more than you can afford to lose. This seems like a bad bet to me. All you have to do is pay attention to the words and actions of Ortega. And if that is not enough, look at how poor the country is and talk to some of it's citizens. And then check out the bigger picture with Chavez at the helm.

My heart goes out to the Nicaraguans. Many are here, eeking out a better living in Costa Rica. I know a local Cuban who fought for the Sandinistas in the 1970s. He wouldn't buy property in Nicaragua today.

As for the previous comments on your article, anyone motivated by personal interest can find ways to back up their point of view.

Nicaraguan beachfront Properties still good

I have to agree on some of what is being said but the investment here is still worth the bother if you are facing Taxation from the US and Canada, Europe economic downfall now after the US. buying a beach from Lot here in my area is still less than 35,000

My clients are mostly from Canada and Europe and have bought lots and I have built their dream home (Villa)
We just closed on two more in October and plan to build two more villas in the area for these two other clients. Canadian and UK

What you must do is make sure the property is titled correctly and that it was not involved in a cooperative which was owned by many people for the purpose of growing food, now they are selling them , and this is where the problems start, I stay away from that kind of property.
I buy clean title, in this case its clean until 1897. One owner , never was a common property and the owners are some of the most respected people in Carazo.
Title Insurance is one option if you like that sort of thing. One of these were with American Title and the other was not . both closed with no problems and the letter of no objection from the attoney general was issued.

Carazo is 1.5 hours away from Managua and green and has water, unlike some of the SJDS properties

Fell free to vist the website below and write if you have any other questions.

Jorge Giraldez-Benard
Latin American Advisors Co. LTD
Managua, Nicaragua C.A.
Tel: 011 505 8825-8505

Providing feasibility studies for areas in Latin America and conduct research analysts.
Introduce European & U.S. developers seeking representation in LatinAmerica, Specializing in Nicaragua

Democracy in Action in Nicaragua

Nicaragua—a country that has had a robust democracy for 20 years—has recently been the subject of media reports touting alarmist messages. The idea of Nicaragua becoming a communist state has always gained widespread coverage in the media due to its incendiary nature.

The bottom line is that bad news sells and Nicaragua has frequently been the scapegoat of this unfortunate phenomenon. With Nicaragua’s challenging history, it can be easy to frighten readers in order to sell newspapers. Good news does not sell in the same way so the positive news from Nicaragua often does not make the headlines.

The fact of the matter is that Daniel Ortega has been in power for three years and the calamities that were forecast in the media have not come to pass. Land and private property has not been seized or expropriated. There has not been a violent political breakdown. Foreign investment continues to grow. Democracy is alive and well in Nicaragua.

Democracy in Nicaragua can be messy at times, but such is the nature of the democratic process itself, irrespective of the country. In a democracy the people have a strong voice and people do not always agree with one another. The important thing is that the expression of differing opinions is allowed and a healthy interchange of ideas is the result.

Far from being a communist state, Nicaragua has a stable, multi-party democracy and has had free and democratic elections since 1989. Nicaragua is now counted as one of the safest and most rapidly growing countries in Latin America. As you will read shortly, Nicaragua is also one of the most investment friendly countries in all of Latin America.

How Real Communist Countries Are Doing On The World Stage

For the sake of argument, consider Cuba and China for a moment. Unlike Nicaragua, Cuba and China are undoubtedly communist countries. So how are these communist countries fairing on the world stage?

Cuba, which is a dictatorship as well as a communist state, continues to have a record number of tourists arriving into the country. The demand is so robust that hotel chains are scrambling to build new resorts to meet that demand.

China is a communist state with a record of human rights abuse. Amnesty International and Human Rights Watch have documented myriad abuses of human rights in violation of internationally recognized norms. In addition, government control in China reaches into nearly every aspect of the public and private sector. The Internet is patrolled and material the government disapproves of is blocked from the public.

Despite all this, countries are eager to do business with China. In fact, countries from all over the world are lining up at China’s door.

Nicaragua on the other hand, is not a communist state and does not have a record of governmental control or crackdown on the private sector. However, Nicaragua has been tarnished with a brush that oddly enough has had little impact on the world’s desire to do business with other countries that actually fit the description.

The realities of doing business in Nicaragua are quite different than the perception that is put forth by the media. Nicaragua has strong forward momentum in the world of business simply because the political reality on the ground is decidedly pro-business.

The bottom line is that political grandstanding and negative reports sell newspapers. Those who are afraid to do business in Nicaragua due to alarmist media reports and words such as “communism” being thrown around when not appropriate, do themselves a grave disservice.

Doing Business in Nicaragua

Nicaragua is a country with a free-market economy, with stability achieved through sound management of fiscal, financial, monetary, and currency exchange policies. Policies intended to stimulate national and foreign investment have lead to Nicaragua’s strong and growing economy. Investors will find Nicaragua to be a country that has sustained economic growth and a substantial increase in private investment as well as exports.

According to Pro Nicaragua:

“In 2008, foreign direct investments (FDI) reached US$626.1 million, an increase of over 64% from 2008. This significant result speaks of the great advantages offered by Nicaragua to foreign investors, i.e. its strategic geographic location, a favorable investment climate, highly competitive costs, and a productive labor force. Furthermore, 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.”

In addition, in 2008—a year where many countries experienced a contraction in their economies—Nicaragua registered a GDP growth rate of 3.2%. 2008 also saw a 64% increase in foreign direct investment over the previous year.

Even more recently, Doing Business 2009, ranked Nicaragua as one of the top two countries with the most favorable conditions in which to conduct business in Central America. The report was based on business environment indicators including: starting a business, hiring and firing workers, enforcing contracts, getting credit, closing a business, registering property and protecting investors.

Nicaragua has good working relations with the United States and many other countries.
Nicaragua ratified Free Trade Agreements with major markets such as the United States, and the Dominican Republic (DR-CAFTA). Additionally, Nicaragua signed and ratified 19 bilateral investment agreements with Mexico, Spain, Taiwan, Denmark, the United Kingdom, the Netherlands, Korea, and Ecuador, among others. The U.S.-Central America Free Trade Agreement (CAFTA)

Nicaragua currently has agreements in place with businesses for the production of energy plants and for the investment of 650 million dollars, which will enable 450 new mega watts of power to be generated in the country. Carlos Slim, one of the wealthiest individuals in the world has invested significantly in telecom in Nicaragua, resulting in one of the most advanced systems in Latin America. There are call centers opening in Nicaragua that are capable of handing calls from around the globe.

Nicaragua is also pro-active in matters regarding the environment and sustainability. Law 532, The Renewable Energy Incentive Law, promotes green energy generation from renewable sources. The law provides exemptions of income taxes for up to seven years for qualifying projects. In addition, the law allows for the exemption of all municipal taxes on real estate and sales and registrations during the construction of a project for a period of ten years. Fixed investment in machinery, equipment, and hydroelectric dams will be exempted from all taxes and duties for a period of ten years as well. Nicaragua is taking concrete steps to put itself at the forefront of the renewable and green energy movement in Latin America.

Nicaragua has a Free Trade Zone that attracts manufacturing businesses from around the world and has resulted in the creation of 73,000 new jobs. The Free Trade Zones Law applies to export-oriented industries, including light manufacturing, agribusiness and contact centers. According to international agreements with World Trade Organization members, Nicaragua will be one of the few countries in the region able to provide free zone and other tax incentives to exporters after the year 2008.

In 1991, the Government of Nicaragua passed a series of laws called Free Trade Zone Incentive Laws, the purpose of which was to provide support for the Export Processing Zones. As favorable as the current laws are, they are presently being modified to provide even more benefits.

At this time, these laws currently provide a total tax exemption on income and property taxes; a total exemption on municipal taxes; a total exemption on taxes for machinery, equipment and raw material, and on transport and support services for the Free Trade Zones, and a total tax exemption on value added tax. Furthermore, all permits can be obtained in less than six weeks. Nicaragua is going the extra mile to attract and keep foreign investment by passing and implementing business-friendly laws.

In Nicaragua, 100% international ownership is permitted. Unlike many other countries, there is no discrimination against foreign investors, whether it is total ownership of a company or as shareholders. In addition, Nicaragua passed laws that ensure foreigners are able to not only realize profits but are able to remove their profits from the country if they wish to do so.

Law 344, which was created for the Promotion of Foreign Investments, is the main legislation that governs foreign investment in Nicaragua. Law No. 344 not only provides equal treatment of foreign and domestic investment but it also eliminates restrictions on the ways in which foreign capital can enter the country, and the law recognizes the foreign investor's right to own and use property without limitation or restriction.

As mentioned, foreigners can convert or transfer funds associated with their investments. Many transactions are conducted in U.S. dollars. Private foreign exchange market operated by local financial institutions allow for the remittance of capital, earnings, loan repayments and lease repayments freely and without restriction. In addition, the law contemplates total currency conversion, freedom to repatriate all capital and profits and no pre-established minimum or maximum amount of investment. National loans are accessible through local banks and law guarantees full property protection. In regards to private property, the Nicaraguan law recognizes and guarantees the legal rights of all investors, irrespective of nationality.

The new Coastal Law makes private property ownership in Nicaragua even more secure. The law consolidates previous laws and provides a clear standard and mandate for coastal real estate construction. As of June 5, 2009, the new coastal law establishes a clear and irrefutable set of rules that guarantee land ownership along Nicaragua’s sought-after lakes and coastlines. The law states that oceanfront land within 50 meters of the high-tide line is public domain, as is land within five meters of lakes and lagoons. Rivers are exempt. The new coastal law removes uncertainty. The law ensures private property ownership that is just a short distance from the high tide line, giving buyers access to the beautiful beaches that span the Nicaraguan coastline. The Coastal Law is not retroactive. For investors who built closer to the high tide line before the passage of the new Coastal Law, their private property rights will be fully respected.

In addition to securing private property rights and the right to own and build in coastal areas, Nicaragua has implemented new pension laws to attract retirees. Nicaraguan law 694 creates a retirement program that is second to none in the region. Those with retirements from a public or private institution are eligible to retire in Nicaragua with only $600 in monthly pension. Those with income from a stable source such as dividends are eligible with just $750 per month. Furthermore, the retiree’s spouse, children and parents are also eligible for just $150 per person. Retirees are allowed to import all household goods up to $20,000 completely free of import taxes. Even more impressive, retirees are also granted a tax exemption up to $200,000 for professional or scientific items, provided they are used for the benefit of Nicaraguan society.

Nicaragua has also removed previous visa restrictions in order to welcome more people into the country. Nicaragua has passed some of the most extensive and favorable retirement and tourism incentive laws in Latin America.

Nicaraguan Law 306, the Tourism Investment Incentives Law, allows qualified tourism projects to receive an 80% to 90% income tax exemption; a property tax exemption for 10 years and an exemption on import tax and value-added tax for the purchase of accessories, furniture, or equipment.

The law also provides tax exemptions for project implementation such as value-added tax on design and engineering and construction services and the exoneration of import duties and taxes and of the General Value Tax (I.G.V.) for the purchase of local construction materials and fixed building accessories. The tourist law also allows tax incentives for projects that undergo extensive expansions. Thus far, over 300 projects have been approved and will benefit from the Tourism Investment Incentives Law in Nicaragua.

Nicaragua has demonstrated repeatedly that it is an investment friendly country with vast potential and opportunities.


Kevin I. Fleming | Chairman

Grupo Mariana Family of Resorts
Managua, Nicaragua
(888) 484-4425 North America
(505) 2-276-5938 Nicaragua Office Tel

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