Nicaragua has become a leading destination for Foreign Direct Investment (FDI) in Central America, reaching a total of $2.535 billion in 2023, accounting for 21.4% of total FDI in the region. The country stands out globally for its strategic location, low labor costs, and business-friendly reforms, which make it a promising market with strong investment potential, especially in manufacturing and renewable energy sectors.

The Nicaraguan Ministry of Labor announced a 7% salary increase for workers in free trade zones, effective January 1, 2025. This raises the minimum monthly wage from C$8,746.46 (USD$236) to C$9,359.46 (USD$253). The move aims to improve job stability and enhance productivity in key industries such as industrial parks, tobacco, call centers, apparel, textiles, and agro-industry.

Despite this wage increase, Nicaragua remains highly competitive in labor costs within Latin America. While wages in free trade zones in countries like Costa Rica and Panama can exceed C$20,000 (USD$541), Nicaragua offers significantly lower labor costs, maintaining its appeal for foreign investment, particularly in labor-intensive sectors.

At Dentons, we provide expert advice to clients seeking to expand their operations and enhance business opportunities. Our combination of global reach and deep local knowledge ensures tailored-made legal and business solutions that drive success. Let us help you grow your business and optimize operations as your gateway to Latin America.

For further information contact:

• Edgard Torres: edgard.torres@dentons.com
• Mario Novoa: mario.novoa@dentons.com

Contributor: Emily Reyes