U.S. warns investors of property confiscation risks in Nicaragua

The United States Department of State has issued a warning to investors regarding the investment climate in Nicaragua, advising ‘extreme caution’ due to risks of property confiscation and lack of rule of law. In its 2026 Investment Climate Statement, the U.S. government highlighted a history of expropriations conducted without due process, driven by the political control of institutions and a lack of judicial independence.

The report notes that these risks extend beyond political opponents and civil society to include foreign investors. A cited example is BHMB Mining, a foreign-capital company that lost its Palacagüina mining plant in 2025 following an estimated $80 million investment. The U.S. government has previously taken actions against officials and companies linked to the Nicaraguan mining sector in response.

Economic analysts suggest the report could lead to a decline in foreign direct investment and may trigger further U.S. actions, such as special tariffs under Section 301 investigations. Additionally, the report points to a growing reliance on opaque Chinese financing for infrastructure and the preferential treatment of Chinese companies in public procurement processes.