4 facts you did not know about the free zones regime

November 13, 2015

The free zones industry is one of the most thriving activities of the national economy, representing 50 percent of total exports. This special fiscal regime houses approximately 170 companies, which currently manufacture footwear, automotive harnesses, apparel, medical devices and agro industrial products.

Here we present four facts you did not know about the free zones industry of Nicaragua:

• Nicaragua houses 13 percent of all Latin American industrial parks:
According to the Association of Free Zones of the Americas (AZFA), Latin America has more than 400 industrial parks, of which 49 are located in Nicaragua. Also, Nicaragua is placed among the countries with the highest number of industrial parks in Latin America, earning the third spot after Colombia and the Dominican Republic.

• Free zones generate over 900 thousand employments in Latin America, 12 percent of this jobs are in Nicaragua:
Currently, the free zone regime of Nicaragua generates over 100 thousand jobs. According to data issued by the National Commission of Free Zones (CNZF, for its acronym in Spanish), these jobs are mainly in the apparel sector with 67,174 jobs.

• For more than ten years, the country has been manufacturing automotive harnesses and medical devices:
Command Medical started operations in Nicaragua in 2005, having 10 years of successful operations in the country. Also, Yazaki, a harness and automotive part manufacturing company, located in the western region of the country, started operations in 2002 with 400 employees. Currently, the company is planning to expand its operations.

• Nicaragua is one of the main suppliers of apparel of the United States:
Nicaragua is the second country, within the DR-CAFTA Agreement, with the highest percentage of textile exports in 2014, according to the Office of Textiles and Apparel (OTEXA), of the Department of Commerce of the United States.

Without doubt, the free zones industry has been diversifying over the years as a result of the growing demand of different products and services. This diversification can be seen with the participation of sectors beyond textiles and apparel such as medical devices, automotive harnesses, tobacco, agro industrial products, outsourcing services, footwear, among many others. The country has updated its free zone law, aimed at strengthening the facilitation of the regime, fostering investments, generating employment and promoting the production of high value-added products that will benefit the country.