The U.S. Department of State’s Investment Climate Statements help U.S. companies make informed business decisions by providing up-to-date information on the investment climates of more than 170 countries and economies. They are prepared by our embassies and consulates around the world and analyze each economy’s openness to foreign investment. Topics include:
Openness to, and Restrictions upon, Foreign Investment,
Investment and Taxation Treaties,
Legal Regime,
Industrial Policies,
Protection of Property Rights,
Financial Sector,
State-owned Enterprises,
Corruption,
Labor Policies and Practices,
Political and Security Environment, and
U.S. International Development Finance Corporation (DFC) and Other Investment Insurance or Development Finance Programs
Each statement provides a starting point for U.S. firms and offers a point of contact at the relevant U.S. embassy or consulate abroad.
These reports are also a resource for foreign governments to create business environments that ensure fair treatment for the United States and our companies and investors.
To access the full Investment Climate Statement, visit the U.S. Department of State Investment Climate Statements website.
2025 Nicaragua Investment Climate Statement Executive Summary:
Investors should be extremely cautious about investing in Nicaragua. Under President Daniel Ortega and Vice President Rosario Murillo, Nicaragua continues to suspend constitutionally guaranteed civil rights, detain political prisoners, seize private property, and disregard the rule of law, creating an unpredictable investment climate rife with reputational risk and arbitrary regulation.
After committing widespread electoral fraud and jailing opponents, the Ortega-Murillo regime secured a fourth consecutive presidential term in November 2021. The regime has revoked the legal registration and expropriated the assets of more than 3,600 nonprofit organizations – including environmental advocacy groups, private universities, the country’s leading graduate business school, Catholic-linked charities, the Red Cross, and organizations that provide free dental and health care to impoverished children – ostensibly for being at high risk of money laundering and terrorist financing. In February 2023, shortly after expelling more than 200 political prisoners to the United States, the regime stripped the former prisoners of their Nicaraguan citizenship, removed them from the civil registry, froze their bank accounts, and seized their properties.
The regime increased its repression of the Nicaraguan private sector in 2023, revoking the legal registration and expropriating the assets of 19 of the nation’s leading business chambers. Business chambers had for decades played a crucial role in Nicaragua’s private sector as advocates for the business community and commercial policies. Individual businesses must now engage directly with Nicaragua’s authoritarian government, often at greater cost for firms and from a weaker negotiating position.
In 2020, the National Assembly approved six repressive laws that alarmed investors. Some of the most concerning include: a foreign agents law that requires organizations and individuals to report foreign assistance and prevents any person receiving foreign funding from running for office; and a consumer protection law that could prevent financial institutions from making independent decisions on whether to service financial clients, including OFAC-sanctioned entities. Tax authorities have seized properties following reportedly arbitrary tax bills and jailed individuals without due process until taxes were negotiated and paid. Arbitrary fines and customs inspections prejudice companies that use or sell imported products.
Nicaragua further increased its control over civic spaces in 2024, granting the Ministry of Interior (MINT) the authority to authorize, control, and monitor all public artistic events or shows. The regulation warns against “political” references, authorizes MINT to issue sanctions for failure to comply, but does not specify what actions are considered an infraction.
In response to the Ortega-Murillo regime’s deepening authoritarianism, almost all international financial institutions have stopped issuing new loans to Nicaragua, and most external financing will wind down by 2025. A deepening partnership with the People’s Republic of China (PRC) has led to promises of investment and trade.
Despite repression and growing poverty, Nicaragua continues to show stable macroeconomic fundamentals, including a record-high $5 billion in foreign reserves, a sustainable debt load, and a well-capitalized banking sector. Independent forecasts predict Nicaragua’s $17 billion economy will grow about 3.5 percent in 2024. Inflation decreased to 6 percent year-on-year in December 2023. The price of a basket of typical consumer goods and services – a key measure of inflation’s impact on the general population – rose to a record high of $540 per month in December 2023, more than double the minimum wage of $240. The formal sector still has some 120,000 fewer jobs than its 2017 peak, and Nicaraguan families now earn 20 percent less on average in real terms than in 2017. Following an unprecedent wave of hundreds of thousands of Nicaraguan migrants emigrating to the United States in 2022 and 2023, remittances rose to a new record of $4.7 billion in 2023 – or about 30 percent of Nicaragua’s GDP – driving local consumption spending and generating significant government tax revenue.
Nicaragua’s economy still has significant potential for growth if investor confidence can be restored by strengthening institutions and improving the rule of law. Its assets include ample natural resources, a well-developed agricultural sector, and ready access to major shipping lanes. The United States is Nicaragua’s largest trading partner – it is the source of 30 percent of Nicaragua’s imports and the destination of 55 percent of Nicaragua’s exports.
To access the full text of the 2025 ICS, visit the U.S. Department of State Investment Climate Statements website.