Nicaragua: Multi-Sectoral Agreement to Attract Investment

Entrepreneurs, unions and the government have agreed to maintain the lowest wages on the isthmus and attract companies to Free Trade zones.

Wednesday, March 18, 2009

Thus far in 2009, several free trade zone companies, such as Dasol Textiles and Premier Textiles, have shut down operations in the country. These are added to the ones that shut down in 2008, such as the Taiwanese Company Nien Hsing. Estimates on the number of jobs lost since 2008 range from 13,000 to 20,000.

In response to this situation, employers, unions and the government have agreed, according to the article in, "to fix salary increases for the next three years, so that companies can have a clear projection of payroll costs and employees can ensure a gradual, predetermined increase." The article stresses that "this measure will allow Nicaraguan salaries to remain the lowest in Central America which, according to the private sector, will give ‘the country more competitiveness.’"

The article in La Prensa of Nicaragua also incorporated views and perspectives about the free trade zones from several business leaders and government officials.

More on this topic

Textile School for Free Trade Zones

June 2014

In Nicaragua a proposal has been made to create a training center to improve the labor performance in free zones and attract more foreign investment to the sector.

In order to improve employees skills and increase the productivity and competitiveness of enterprises, the National Commission of Free Zones (CNZF) is proposing the creation of a textile school, where ongoing training on production techniques would be provided for the sector.

Nicaraguan Free Zones to Export 13% More

April 2011

Authorities expect free zone exports to reach $1.7000 million in 2011, 13% more than in 2010.

Alvaro Baltodano, executive director of the Free Zone Corporation, added that they have experienced sustained growth since 2009.

Regarding new investments, he added that they expect foreign companies to invest around $1.000 million in 2011, especially in infrastructure, energy and communications.

Textile Factory Closes Temporarily in Nicaragua

March 2009

The US textile company, Cone Denim, temporarily closed its 850-employee plant in Nicaragua.

The denim manufacturing plant, International Textile Group, was inaugurated in the middle of last year with an investment of $100 million.

Alvaro Baltodano, president of the Free Trade Zones Corporation of Nicaragua, in an article in, said that "Code Denim executives stated that it was a ‘temporary closure’ and that it will resume its operations in 'a few weeks.’"

Business nervous over closing of Nicaragua's maquilas

June 2008

An announcement about the closing of various plants of the international consortium Nieng Hsing has raised anxieties in Nicaragua's business community about the future of the free trade zone and its 14,000 workers.

Nieng Hsing, which has operated in Nicragua since the 1990s, has already closed five of its plants.

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