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On Wednesday, October 29, 2025, the regime of Daniel Ortega and Rosario Murillo proposed the creation of Special Economic Zones (SEZs) of the Belt and Road, as a special regime of tax, customs, port, border, and administrative incentives for companies investing in the country.
The proposal is set out in a draft law for the Creation of Special Economic Zones of the Belt and Road, presented by the husband-and-wife “co-presidents” of Nicaragua, Daniel Ortega and Rosario Murillo, and submitted to the National Assembly, which is controlled by the ruling Sandinista party.
The draft law would provide fiscal and customs benefits to companies operating in the Belt and Road Special Economic Zones, including 100% exemption for all their economic activities, according to the text.
It proposes a 100% exemption from the Payment of Income Tax on Economic Activities (IR) for 10 years, renewable every 10 years indefinitely.
It also includes a 100% exemption from the payment of taxes on dividends generated from economic activity for 10 years, renewable every 10 years indefinitely.
Additionally, it provides exemptions from taxes and fees for non-resident foreigners on: interest from loans, commissions, professional fees, and payments for legal services provided abroad or in Nicaragua.
The proposal also grants exemptions from all taxes, customs duties, and consumption taxes associated with the import of goods and services for their operations, as well as Value Added Tax (VAT) exemptions on local purchases and imports of goods and services.
Other benefits include full exemptions from indirect, sales, or selective consumption taxes; full exemption from taxes on the transfer of movable and immovable property; and full exemption from municipal taxes.
The draft law establishes that these incentives will benefit legal entities—public, private, mixed, national, or foreign—that operate in the Special Economic Zones of the Belt and Road in sectors such as manufacturing, agro-industry, technology, and value-added services that support domestic production.
Although the text does not directly mention Chinese investments, the commercial zone bears the name “Belt and Road,” the global strategy launched by Chinese President Xi Jinping in 2013, which seeks to expand China’s economic and political influence through investments in different regions.
On August 1, 2024, Nicaragua and China inaugurated a direct maritime trade route under the Belt and Road Initiative, aiming to take advantage of the benefits of the Free Trade Agreement (FTA) between the two countries.
Ortega and Murillo’s son in charge
According to the draft law, the Special Commission in charge of the management of the Belt and Road Special Economic Zones (SEZs) will be composed of seven officials and headed by the Presidential Advisor for Investment Promotion, Trade, and International Cooperation, a position held by Laureano Ortega Murillo, the son of the ruling couple.
The other six members will be the president of the Central Bank of Nicaragua, the heads of the Ministry of Development, Industry, and Commerce (Mific), the Ministry of Finance and Public Credit (MHCP), the Ministry of Transport and Infrastructure (MTI), the Attorney General, and 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 have the authority to grant approvals, issue permits, and oversee the operations of companies operating within the zones.
Between January and May 2025, imports from China reached $783.1 million, consolidating the Asian country as Nicaragua’s third-largest supplier of goods, with a 15.7% share of total imports. In contrast, Nicaraguan exports to China accounted for only 1.9% of the country’s export destinations ($69 million), far behind traditional markets such as the United States and Central America.
Despite the promoted FTA with China, the United States remains Nicaragua’s main trading partner, accounting for nearly 40% of exports. This trade could be affected if the Donald Trump administration’s proposal to withdraw Nicaragua from DR-CAFTA goes forward.
The Free Trade Agreement (FTA) between the Asian giant and Nicaragua, signed on August 31, 2023, came into effect on January 1, 2024, immediately granting access to that market for 71% of the products Nicaragua currently exports at a 0% tariff, including beef, unrefined gold, sugar, seafood, honey, rum, chocolate, harnesses, and textiles, among others.
Nicaragua expects that 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 that it will invest in setting up companies in free trade zones.
With information from EFE
