Nicaraguan Gov. to Give Tax Exemptions to Chinese Companies
The creation of Special Economic Zones rewards investors with tax, customs, port, border, and administrative incentives.
HAVANA TIMES – The regime of Daniel Ortega and Rosario Murillo proposed on October 29, 2025, the creation of the Belt and Road Special Economic Zones (SEZs) as a special system of tax, customs, port, border, and administrative incentives for companies that invest in the country.
The proposal is set out in a Law for the Creation of Belt and Road Special Economic Zones, presented by Nicaragua’s ruling couple, Daniel Ortega and Rosario Murillo, and submitted to the National Assembly, which is controlled by the Sandinista government.
According to the text, the initiative will offer fiscal and customs benefits to companies operating within the Belt and Road SEZs, including a 100% exemption from all taxes on their economic activities.
The proposal includes:
- A 100% exemption from the payment of Income Tax (IR) on economic activities for ten years, renewable indefinitely every ten years.
- A 100% exemption from tax on dividends earned from economic activity for ten years, also renewable indefinitely every ten years.
- A tax exemption for non-resident foreigners on interest from loans, commissions, fees, and payments for legal services rendered abroad or in Nicaragua.
- An exemption from all import duties and consumption taxes on goods and services destined for operations within the SEZs.
- An exemption from the Value Added Tax (VAT) on local purchases and imports of goods and services.
Other benefits include total exemptions from indirect taxes, sales or selective consumption taxes, property transfer taxes (on both movable and immovable property), and municipal taxes.
The initiative establishes that these incentives will apply to “public, private, mixed, national, or foreign legal entities operating within the Belt and Road Special Economic Zones in sectors such as manufacturing, agroindustry, technology, and value-added services.”
Although the text does not explicitly mention Chinese investments, the commercial zone bears the name of the Belt and Road, the global strategy launched by Chinese President Xi Jinping in 2013 to expand China’s economic and political influence through investments in various regions.
On August 1, 2024, Nicaragua and China inaugurated a direct maritime trade route under the Belt and Road framework, seeking to capitalize on the Free Trade Agreement between the two countries.
Ortega and Murillo’s son in command
According to the initiative, the Special Commission overseeing the Belt and Road Special Economic Zones will consist of seven officials and be chaired by Laureano Ortega Murillo, the presidential advisor for Investment Promotion, Trade, and International Cooperation — and the son of the dictatorial couple.
The other six members will include:
- The President of the Central Bank of Nicaragua,
- The Ministers of Development, Industry, and Trade (MIFIC),
- The Minister of Finance and Public Credit (MHCP),
- The Minister of Transportation and Infrastructure (MTI),
- The Attorney General,
- The Executive Director of the National Free Zones Commission (CNZF).
These Belt and Road SEZs will be administered by the National Free Zones Commission (CNZF), which will be authorized to grant permits, issue licenses, and oversee company operations.
Between January and May 2025, imports from China reached 783.1 million dollars, consolidating the Asian nation as Nicaragua’s third-largest supplier, accounting for 15.7% of total imports. By contrast, Nicaraguan exports to China represented only 1.9% of the country’s total export destinations (about 69 million dollars), lagging far behind traditional markets such as the United States and Central America.
Despite the much-publicized Free Trade Agreement (FTA) with China, the United States remains Nicaragua’s main trading partner, absorbing nearly 40% of Nicaraguan exports. This trade relationship could be jeopardized if the Trump administration’s proposal to withdraw Nicaragua from DR-CAFTA moves forward.
The FTA between China and Nicaragua, signed on August 31, 2023, came into effect on January 1, 2024, granting immediate zero-tariff access to 71% of the products Nicaragua currently exports, including beef, gold, sugar, seafood, honey, rum, chocolate, harnesses, and textiles, among others.
Nicaragua hopes China will become one of its main suppliers of raw materials, inputs, capital goods, consumer goods, machinery, and equipment, as well as a buyer of Nicaraguan agricultural exports and an investor in the installation of companies in free trade zones.
First published in Spanish by Confidencial and translated and posted in English by Havana Times.