Nicaragua remains a poor, underdeveloped nation with a history of political turbulence. This raises a number of obstacles for investors seeking to profit from Nicaragua's expanding tourism industry. Poor roads increase wear and tear on vehicles, limit tourist itineraries, and impose increased costs. There are also few hotels outside of Managua that meet international tourist standards. The street protests that Sandinista-aligned groups led last april and july damaged the nation's image as a tourist destination.
Future protests remain a possibility.
In a recent case, a land ownership dispute forced italian investors to put plans on hold for a 1,200 acre beach resort. Accordingly, prudent investors must consult a local attorney to carefully verify property titles before purchasing land. In addition, high taxes make gasoline expensive. It does, however, offer a ten year tax exemption for investments in new hotels and has a draft law pending in the National Assembly that would offer additional benefits for investors in the tourism industry. Good opportunities exist for entrepreneurs who are willing to make a long-term investment in Nicaragua's emerging tourism industry.