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Managua, Nicaragua ● 2016
PRONicaragua is the Official Investment Promotion Agency of the Government of Nicaragua.
• Information about Nicaragua and business opportunities
• Customized information packages
• Organization of site visits: meetings with companies and institutions
• Support with information on the structure of operational costs and fiscal charges
• Identification of options for locations for real estate
• Legal advice• Directory of suppliers of
related goods and services
• Support and facilitation
• Facilitate and expedite government procedures
• Support in facilitating the exporting process
• Information about business opportunities in the Caribbean Coast through our regional office PRONiCaribe
Assessment and decision making
Implementation of the project
Aftercare
OUR SERVICES
Capital Managua
Area 130,373.4 km2
Official Language Spanish
Population 6.2 million
Currency Córdoba
Exchange Rate
(2016 Average)C$28.62 = US$1.00
Time Zone UTC/GMT – 6 hours
Source: Central Bank of Nicaragua.
Región Central /Central Region
Región Pacífico/Pacific Region
Región Caribe/Caribbean Region
COUNTRY PROFILE
STRATEGIC LOCATION
Sources: Central Bank of Nicaragua, Ministry of Development, Industry and PRONicaragua. *Estimates Data
Gross Domestic Product US$12.69 billion (4.9% growth vs 2014)
GDP per capita US$2,027
Exports US$4.89 billion
FDI Inflows US$1.22 billion*
Gross International Reserves US$2.49 billion (2.35 times the monetary base)
Inflation 3.05%
Devaluation of Currency 5% annual vs. US Dollar
ECONOMIC PERSPECTIVE
6.797.46
8.49 8.38 8.74
9.7610.46
10.85
11.8112.69
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Bill
ion
US$
Gross Domestic Product
Min Zhu, Deputy Managing Director of the IMF, described Nicaragua´s economic growth as “excellent” as it has outperformed Latin America´s average growth rate of 1.2% and
Central America´s 2.2%.
Source: Central Bank of Nicaragua.
Real GDP Growth (%)
2011 2012 2013 2014 2015
6.2 5.1 4.5 4.7 4.9
ECONOMIC GROWTH
NICARAGUAGDP 2015: 4.9%Average of 5 years: 5.1
GUATEMALAGDP 2015: 4.1%Average of 5 years: 3.8%
Source: Central Bank of Nicaragua and IMF.
EL SALVADORGDP 2015: 2.6%Average of 5 years: 2.1%
COSTA RICA GDP 2015: 3.5%Average of 5 years: 4.0%
HONDURAS GDP 2015: 3.6%Average of 5 years: 3.5%
PANAMA GDP 2015: 6.0%Average of 5 years: 8.4%
GDP GROWTH IN THE REGION
Nicaragua maintains positive relations with different multilateral organizations such as theInternational Monetary fund (IMF), World Bank (WB), the Inter-American Development Bank(IDB), and the Central American Bank for Economic Integration (BCIE)
• On July 2015, Moody´s announced an improvement in thecredit rating of Nicaragua, going from B3 to B2.
• On December 2015: Fitch Ratings assigned B+ for the firsttime to Nicaragua with steady perspective.
• On February 2016: Standard & Poor's assigned B+ forcredit ratings, local and foreign currency. The perspectiveof the qualification is long term steady.
“¨The macroeconomic policies implemented by the Government of Nicaragua are positive, and shouldserve as an example for Latin America”
Min Zhu, Deputy Managing Director of the IMF
ECONOMIC STABILITY
0.280.38
0.63
0.430.51
0.97
1.281.39
1.45
1.22
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*
Bill
ion
US$
18% compound annual growth rate
According to preliminary statistics from 2015, the sectors that registered more FDI inflows were: telecommunications, industry, and commerce and services.
Source: Central Bank of Nicaragua, Ministry of Development, Industry and Tradeand PRONIcaragua.*Estimated data
EVOLUTION OF FOREIGN DIRECT INVESTMENT
1.992.33
2.74 2.62
3.45
4.36
4.82 4.745.14
4.90
0.00
1.00
2.00
3.00
4.00
5.00
6.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
US$
Bill
ion
14% compound annual growth rate
For 2015, total exports reached US$4.90 billion. The main export destinations were: the United States, Central America, Mexico, the European Union and Venezuela.
Source: Central Bank of Nicaragua.
EVOLUTION OF EXPORTS
8 1016
31
66 69
8 11 11
35
57
101
0
20
40
60
80
100
120
Nicaragua Costa Rica Panama Guatemala Honduras El Salvador
Homicide Rate in Central America(per every 100,000 inhabitants)
2014 2015
Mean L.A: 28.5
Sources: Commission of Police Chiefs and Directors of Central America, Mexico , the Caribbean and Colombia; World Economic Forum.
0.0
0.4
0.6
1.1
1.1
1.1
1.8
2.0
3.0
4.2
4.5
4.7
5.4
6.8
7.2
7.3
13.3
16.0
17.0
20.2
24.3
0.0 5.0 10.0 15.0 20.0 25.0 30.0
Canada
Brazil
Nicaragua
United States
Bolivia
Uruguay
Costa Rica
Argentina
Chile
Paraguay
Haiti
Colombia
Panama
Peru
Venezuela
Dominican Republic
Mexico
Jamaica
Honduras
Guatemala
El Salvador
Crime and Theft as a Main Problem to do Business in the Americas 2015
SAFETY INDICATORS
Demographic Indicators
Population under 39 years old 76.1% Unemployment* 6.7%
Labor Force* 3.2 million Underemployment 46%
Source: Central Bank of Nicaragua. *2014 third quarter estimated data
420459
493 504535
578624
674710
773
0
100
200
300
400
500
600
700
800
900
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Tho
usa
nd
of
emp
loye
es
Formal Employment
LABOR FORCE
MODEL OF DIALOGUE AND CONSENSUS
The Government of Nicaragua, the private sector and workers coordinate efforts and designstrategies to:
1. Promote economic development
2. Generate new decent jobs
3. Reduce poverty
Governmental entity chaired by the President with government and private sectorrepresentatives, to follow up on agreements and promote better working relationships.
The model of dialogue and consensus has been
included in the article 101 of the Political Constitution of
Nicaragua.
Signing of tripartite agreement between
government, private sector and union leaders to fix
minimum wage increases and social responsibility
strategies in the long term.
More than 100 laws passed by consensus with the Superior Council of the
Private Enterprise (COSEP).
Since 2007, the Government of Nicaragua set out to: Increase generation capacity, Expand
coverage, and Go green, as part of its key development strategies of the country.
Source: Nicaraguan Energy Institute (INE, for its acronym in Spanish). *Estimated data to September 2015
Installed Capacity: 1,346 MWInstalled Capacity: 819 MW Expected Capacity: 1, 666 MW
Installed capacity has increased 64% since 2007.Coverage has reached 85% of the national territory.
Thermal Renevable Energy
DEVELOPING THE ENERGY SECTOR
74%
26%
2007
90%
10%
2020
54%
46%
2015*
The Foreign Investment Promotion Law (344) offers investors fundamental guarantees such as:
• Full currency convertibility
• Freedom to expatriate all capital and profits
• Full international ownership
• No discriminatory treatment for foreign investors
• Full protection of intellectual property rights, patents, and brands
• Access to loans through local banks, according to their terms and conditions ofapproval.
Nicaraguan legislation allows the setup of companies with 100 percent of foreign capital; in other words, the participation of national partners is not necessary.
Additionally, the Mediation and Arbitration Law (Law 540) governs two alternate methods to the judicial process to expeditiously solve any dispute resulting from contractual relations between parties.
LEGAL FRAMEWORK FOR FOREIGN INVESTMENT
“Over the last five years, Nicaragua evolved from a 3.2% growth ratein GDP to 4.7%, and it is the nation – after Panama – with the fastestgrowth in Central America”.
Forbes México “Nicaragua, the new jewel of Business in Central America” –March 2016
Outsourcing Services in Nicaragua
OUTSOURCING SERVICES IN NICARAGUA
Source: PRONicaragua, Outsourcing Survey 2016.
Top Services Offered in Nicaragua: • Customer Services• Medical Billing• Back Office• Tech Support• Chat Services• Mobile and Web App Development• Software Development• Digital Marketing• Market Research
+7800 employees by 2015
22% average employment annual growth rate
US$ 80 million in FDI (2007-2015)
US$ 110.84 million in exports in 2015
TOTAL SALES: OUTSOURCING SECTOR
In the year 2015, sales totaled US$121 million, a growth of 32% when compared to the year 2014. Exports totaled US$110.84 million, a growth of 30.8% when compared to the year 2014.
$3.80 $6.97 $4.31 $7.16 $10.77
$73.23
$86.51
$95.87
$84.71
$110.84
$-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
2011 2012 2013 2014 2015
Mill
ion
US$
Local Sales Exports
Source: PRONicaragua, Outsourcing Survey 2016.
78%
22%
Percentage of Companies Exporting their Services
Yes
No
49%
12%
17%
15%
7%
Main Export Markets
USA
Canada
Latin America
Europe
Rest of the World
Approximately 78% of companies in the outsourcing sector export their services. The sector’s export markets have diversified throughout the years - Canada has grown from a participation
of 3% in 2014, to 12% in 2015.
TOTAL EXPORTS: OUTSOURCING SECTOR
Source: PRONicaragua, Outsourcing Survey 2016.
3548
4324
5626
6810
7882
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2011 2012 2013 2014 2015
In the year 2015, employees in the outsourcing sector grew 16% when compared to the year 2014. The average annual growth between 2011-2015 is of 22%
TOTAL EMPLOYEES: OUTSOURCING SECTOR
Source: PRONicaragua, Outsourcing Survey 2016.
The Industry has had a growing trend of providing services in English, thus Jobs in English have always outgrown Spanish jobs.
In the year 2015 English jobs experienced a growth of 4.84% when compared to the year 2014. Jobs in Spanish also saw a growth of 81%.
TOTAL EMPLOYEES BY LANGUAGE
3099
3655
4525
58476130
449669
1101 963
1752
0
1000
2000
3000
4000
5000
6000
7000
2011 2012 2013 2014 2015
English Spanish
Source: PRONicaragua, Outsourcing Survey 2016.
BUILDING A SOLID EDUCATIONAL FOUNDATION
Sources: National Council of Universities, National Technological Institute, América Economía and PRONicaragua.
#1In Latin America
Harvard-Affiliated
97%literacy rate
(2012)
173,997students enrolled in 49 universities
295,885students in 17 areas of technical
training courses
30,793students in 13
different technical careers
12bilingual high schools and 8
language centers
11bilingual colleges with more
than 4,000 enrolled students
1US accredited English Language University
Reverse Brain-Drain: Nicaraguans who have lived abroad with international career
experience and have returned to the country.
Source :PRONicaragua Study University Population 2014
32.9%
27.2%
15.8%
8.3%
3.8%
5.5%5%
Students Enrolled in Business
Accounting and Auditing
Business Administration
Marketing and publicity
Tourism
Global Business
Banking and Finance
Economics
28.8%
23.5%
20%
11%
9.4%
Economy and Business
Other Areas
Engineering and Architecture
Medicine
Law and Political Science
Universities Enrollment
HUMAN RESOURCE AVAILABILITY
Most Studied Bilingual Careers in
Nicaragua:
• Business Administration
• Finance
• Global Business
• Strategic Marketing
• Pre- Engineering
• Software Engineering
• Industrial Engineering
• Biology
• Psychology
Source: Bilingual population Study PRONicaragua 2014.
Language Programs:
• The United States Embassy in Nicaragua offersEnglish programs both for teachers and studentswho would like to learn the language. In total,both programs have +1,200 graduates.
• On average, more than 2,200 students graduateevery year from English Language Centers fromspecialized English courses, such as businessvocabulary for careers and vocabulary for callcenters, TOEFL, SAT, GRE, and GMAT.
• 52.7% of students graduated are between theages of 15 to 25 years old, 26.5% are older than 25years old and 20.9% are younger than 15 yearsold.
+38% of students of bilingual careers arefrom Managua.
BILINGUAL HUMAN RESOURCE AVAILABILITY
23%
23%
12%
9%
9%
6%
6%
4%4%
4%Social Networks
References
Job Banks & Agreements with Universities
Job Fairs
Press
Street Adds
Recruitment Agencies
Radio
Billboards
Others
The main recruitment methods in Nicaragua are referrals and social media. The third most common methods are Job Banks and university databases.
RECRUITMENT METHODS
Source: PRONicaragua, Outsourcing Survey 2016.
BENEFITS FOR EMPLOYEES
44%
42%
39%
39%
25%
22%
8%
Meal Subsidy
Uniforms
Discount Cards
Night Transportation
Life Insurance
Others
None
Source: PRONicaragua, Outsourcing Survey 2016.
On average, 44% of companies provide food subsidies to their employees, 42% uniforms and 39% discount cards and transportation services.
National Holidays **
Morning Shift
48 Hours
Mixed Shift
45 Hours
Night Shift
42 Hours
Labor Shifts
Fringe Benefits Costs for the Employer
% of Ordinary
Gross Income
Vacation 8.33%
Christmas bonus – 13th month 8.33%
Severance Pay 8.33%
Holidays 3.01%
Social security 18.5%
INATEC (Technological Institute) 2.0%
Total 48.50%
1st year of labor 1 month of salary
2nd year of labor 1 month of salary
3rd year of labor 1 month of salary
4th year of labor 20 days of salary
5th year of labor 20 days of salary
6th year of labor 20 days of salary
Total 5 months of salary
Termination Compensation
1. January 1st2. Holy Thursday3. Good Friday4. May 1st 5. July 196. September 147. September 158. December 89. December 25
** Managua has two Holidays more in Ausgust 1st and 10th
LABOR LAW
Free Zones Incentives Law (Law 917)
• Income tax 1
• Import taxes for machinery, equipment, andraw materials
• Municipal tax
• Sales tax
• Capital and property tax
• Real state taxes
1Valid for 10 years with the possibility to be extended once with previous authorization.
Nicaragua offers significant fiscal incentives under the free zones regime for industrial companieswith an export – oriented focus.
100% of exemption in:
ATTRACTIVE FISCAL INCENTIVES
COMPETITIVE & MODERN TELECOM INFRASTRUCTURE
• Fully privatized telecommunications
sector
• Multinational carriers
• Reliability and redundancy
• Fiber optic & digital switching;
Metropolitan area fiber networks
• International private leased circuits
(IPLC)
BPO/KPO
BPO/KPO JOBS
380 580998 876
1638
30553580
4424
57426014
0
1000
2000
3000
4000
5000
6000
7000
2011 2012 2013 2014 2015
BPO/KPO Spanish BPO/KPO English
When compared to 2014, BPO/KPO companies experienced a growth of 4.73% in Jobs in English, and a growth of 86% in Jobs in Spanish. The sector continues to provide more services in English to foreign clients.
Source: PRONicaragua, Outsourcing Survey 2016.
BPO/KPO EXPORTS
$73.23
$85.92 $92.74
$83.20
$107.36
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
2011 2012 2013 2014 2015
US$
Mill
ion
In the year 2015, BPO/KPO exports totaled US$107.36 million, a growth of 29% when compared to the year 2014.
Source: PRONicaragua, Outsourcing Survey 2016.
BPO/KPO SERVICES OFFERED IN NICARAGUA
Source: PRONicaragua, Outsourcing Survey 2016.
18%
15%
12%
9%
9%
9%
7%
6%
5%
3%
3%2%
1%1%Customer Service
Sales
BackOffice
Chat Services
Collections
Technical Support
Data Processing
Social Media Management
Telemarketing
Digital Marketing
Lead Generation
Shared Services Center
Patent Design and Development
Finance Services
PositionSalary Ranges
Without Fringe Benefits
Site Director $1,200 - $5,000
Senior Operations Manager $1,000 - $4000
Operations Manager $1,600 - $3,500
IT Manager $375 - $3,000
Human Resources Manager $540 - $4,000
Recruitment Manager $1,000 - $3,000
Trainer $700 - $1,800
Recruiter $500 - $1,100
Coach $600 - $900
Senior Supervisor $550 - $1,400
Supervisor $500 - $950
Quality Control $450 - $950
Bilingual Agent $450 - $750
Spanish Agent $220 - $610
SALARY RANGES FOR BPO/KPO
Source: PRONicaragua, Outsourcing Survey 2016.
ITO
44
75
101 105116
69
89103
87
114
0
50
100
150
200
250
300
2011 2012 2013 2014 2015
ITO English ITO Spanish
ITO JOBS
When compared to 2014, ITO companies experienced a growth of 10% in Jobs in English, and a growth of 31% in Jobs in Spanish.
Source: PRONicaragua, Outsourcing Survey 2016.
ITO EXPORTS
Source: PRONicaragua, Outsourcing Survey 2016.
$0.59
$3.12
$1.51
$3.58
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
2012 2013 2014 2015
US$
Mill
ion
In the year 2015, ITO exports totaled US$3.58 million, a growth of 136% when compared to the year 2014.
Compared to 2014, the top 3 services remain the same. However, there’s a slight increase in the percentage of companies developing mobile applications.
ITO SERVICES
Source: PRONicaragua, Outsourcing Survey 2016.
13%
13%
12%
12%8%
6%
6%
5%
5%
4%
4%
3%3%
2% 4%Mobile Application Development
Web Application Development
Custom Software Development
Web Page Design
IT Consulting
Search Engine Optimization
Data Base
Web Hosting
Cloud Services
Technical Support
SEM and SEO Campaigns
Testing and Quality Assurance
Web Analytics
Remote Assistance
Others
11%
10%
10%
9%
9%9%
5%
6%
6%
5%
5%
5%
4%3% 3%HTML5
JAVA
JavaScript
PHP
CSS
SQL
XML
.NET
Asp.Net
C#
Python
Ruby
Objective-C
C++
Others
PROGRAMMING LANGUAGES USED BY ITO COMPANIES
Source: PRONicaragua, Outsourcing Survey 2016.
SALARY RANGES FOR ITO
Source: PRONicaragua, Outsourcing Survey 2016.
PositionSalary Ranges Without Fringe
Benefits
Project Manager $800 - $1,200
Senior Developer $500 - $2,500
Junior Developer $400 - $1,200
Programmer $500 - $1,800
Programmer Analyst $385 - $1,500
Programmer Architect $500 - $2,000
Graphic Designer $300 - $1,000
Web Developer $400 - $2,000
2D/3D Animator $400 - $1,000
3D Modeler $700 - $700
Technical Support $500 - $800
A Competitive CostStructureLow labor costs + generous fiscal incentives+ FTAs with main international markets
High degree of social cohesion resulting from dialogue between the Government, the private sector and workers
Pro-business government that understands the value of foreign investment and supports their successful development.
High levels of personal safety and great quality of life.
NICARAGUA’S VALUE OFFER
“Over the last five years, Nicaragua evolved from a 3.2% growth ratein GDP to 4.7%, and it is the nation – after Panama – with the fastestgrowth in Central America”.
Forbes México “Nicaragua, the new jewel of Business in Central America” –March 2016