Nicaragua seeks gateway role for Thai products
NICARAGUA is promoting itself as a springboard to Central America for Thai investors. "Nicaragua clearly has competitive advantages in terms of labour costs and the 10-year tax-exemption policy. Manufacturing has been benefiting from the country's distin
The minister asked the chairman of the Federation of Thai Industries (FTI) to encourage investors to do business there. The FTI vowed to send an educational tour to Nicaragua and conduct further study missions to the country.
The objectives of Castellon’s mission were to promote and strengthen the commercial relationship with Thailand, which is more than 30 years old, and to attract Thai companies to the manufacturing, trading and services industries in Nicaragua.
The mission is seeking joint ventures for exporting to key markets like the United States, Mexico and South America, where Nicaragua has free-trade agreements.
Privileges are available for investors in duty-free zones, such as a tax exemption for up to 10 years for the manufacturing for export of such products as apparel, textiles, agricultural products and footwear. A 60-per-cent reduction from the tax rate required by law will be offered in the 11th year of investment.
Customs duties will be waived for the import of machinery, equipment, moulds and raw materials. Exemptions will also be given for excise and local taxes on the sale and export of goods. Another competitive advantage is the labour pool, with 3.2 million Nicaraguans aged under 39 and the minimum wage equivalent to only Bt26 per hour.
Nicaragua is considered the centre of Central America with an open sea stretching out to the Indian and Pacific Oceans. The country has abundant natural resources, such as gold, silver, copper, forests and fish. Its fine leather can be made into products for export.
The country has natural attractions, which are impressive and safe for travel. Nicaraguan natural sites are listed among the world’s top 10 destinations. The government has hastened the promotional campaign for Nicaraguan natural attractions, resulting in an increase of international tourists entering Nicaragua for holidays.
Long journey ahead
On the other side, Nicaragua has a long journey ahead in terms of agriculture, particularly rice and rubber farming, while Thailand has expertise and skills in such fields.
FTI chairman Supant Mongkolsuthree said commerce between Thailand and Nicaragua continued to grow every year. Nicaragua is one of the countries spotlighted by Thai investors. The meeting with Castellon unveiled interesting offers and information useful for the consideration of investment in Nicaragua.
Jak Chamikorn, honorary consul for Nicaragua, said Thailand’s exports to that country had grown from US$71.16 million in 2012 to $90.54 million in 2013 and $102.97 million (Bt3.465 billion) last year. Nicaragua’s exports to Thailand had climbed from $2.22 million in 2013 to $2.88 million last year.
Nicaragua has imported various Thai merchandise, such as automobile and processor systems, canned seafood and livestock.
Cigars and coffee are considered prospective goods for import by Thailand that will promote better bilateral business ties.
