By Ian Wood - for Home:World

The politicians of Nicaragua know that the best way to build the country's economy is with the help of foreign investors. To that end Nicaragua is making every effort to make foreign investors comfortable bringing their companies to, or starting their own business in, Nicaragua.

Tourism Business

Tourism has become Nicaragua's top income generator. Ten years ago travel in Nicaragua was just for adventurous types. You may have found your best option for a place to stay was a hostal, an empty bedroom in someone's house, or tying a hammock between two trees.

Today, thanks in large part to government tax breaks, familiar hotel franchises like Holiday Inn have entered Managua and smaller, resorts have popped up in many other cities.

Nicaragua's natural beauty is drawing eco-tourists from around the world. Weather you're taking a boat tour of Las Isletas in Lake Granada, hiking Mombacho Volcano, canopying across treetops or surfing waves on the pristine Pacific coastline, the theme is always enjoy and respect your environment.

Law 306

In an effort to spur foreign investment in tourism, the Nicaraguan government created "Law 306" in 1999. This law is packed with incentives focused on making foreign investors comfortable bringing travel-based businesses to Nicaragua and maximizing their chances of success. Law 306 offers the most aggressive business incentives in Latin America. Here are some of the basics.

• Foreign investors enjoy every advantage that local investors do.
• New or improved hotels will pay no taxes on improvements and no income or real estate taxes for 10 years.
• New or improved restaurants, bars, nightclubs and casinos will pay no taxes on improvements and no real estates taxes for 10 years.
• Any business that is likely to bring in tourists may qualify for reduced or waived import taxes of capitol material like cars, furniture, cash registers etc.

Nicaragua has expedited the process for starting new businesses, cutting out much of the bureaucratic red tape that impeded investment previously. Now, it takes less than 45 days to get approval to start your business.

Nicaragua's development strategy is paying off. In 2004 its GDP, Gross Domestic Product, grew 5.2%, outpacing Mexico, Costa Rica and Brazil.

Economic Hotspots

Managua

The Capital City is ground zero for the economic boom in Nicaragua. Home to more than 25% of the population, this city has an abundance of human resources. It is also home to many Nicaraguans who fled the warring country in the 1980's and have returned with an advanced education, a strong work ethic and perfect fluency in English. These entrepreneurs have become some of the country's greatest assets and are very comfortable working with foreigners.

San Juan de Oriente

Most travelers would drive right past San Juan de Oriente. But locals know that this tiny town makes the most incredible ceramics in the country. Ceramics that are made locally for a few dollars are resold in the United States for more than $100! San Juan de Oriente is representative of a handful of small town in the area, each specializing in a different handicraft. Investors in Nicaraguan handicrafts may enjoy tax exempt status.

Granada

This colonial city is a favorite tourist and ex-pat destination. The homes in Granada have a rich Spanish-colonial feel and have steadily increased in value. Many of the homes are bought as investment properties, restored as second homes, or used for small businesses.

San Juan del Sur

Imagine having a home on the Pacific Ocean for the price of an apartment anywhere else! San Juan's proximity to Managua and Costa Rica, its virgin beaches and exciting nightlife have made it's a hot spot for land speculators and turn-key resort homes.

Legal Advice

The opportunities in Nicaragua do not without come without risk. The countries political history may make clear title to a property difficult to discern. Signing business contracts in Spanish requires your due diligence. The best advice is to find council that can help you understand local laws and make you feel comfortable with your investments.

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