Retirement Countries – Thailand vs. Nicaragua

Having visited Thailand a year ago and Nicaragua quite recently, and having been a reader of Stickman reader submissions for some time, I thought it might be useful to make some comparisons.

For American retirees, there have been successive waves going first to Mexico, then Costa Rica, and more recently Panama. As each of these countries has become more expensive, snowbirds have sought the next cheap paradise. Now it seems to
be the turn of Nicaragua, which since the defeat of the Sandanista government and the slow recovery from hurricane Mitch (1999) has been welcoming foreign investment, tourists, and expatriates.

In this regard, Nicaragua can be contrasted sharply. Foreigners can own land and obtain permanent retirement residence visas easily, and need show only a monthly income source of $400 per month, plus $100 more for each additional family member.
Retirees can import their household goods duty-free plus one car every five years. No taxes are imposed on income earned outside the country. Those on a retirement visa cannot hold normal salaried jobs, however.

For those interested in starting a tourism-related business, Nicaragua has passed a very favorable “Law 306”, which provides tax incentives. These benefits include no tax on business income for 10 years, no import duties for
business goods, among others. If starting a B&B in retirement seems attractive, this law makes it feasible. <I WISH Thailand would allow foreigners to do this. Man, the benefits to the economy would be significant – Stick>

Real estate is cheap by most standards. Some of the US franchises (e.g., Century21) are present in Nicaragua, and as well purchasers can obtain title insurance from a US-based company. Property taxes are imposed at 1% of the property value
annually, but the value is set at the purchase price and is only re-assessed when the property is sold. Therefore it’s quite interesting to buy vacant land and then build, or to purchase property needing renovation.

The local currency, the Cordoba, is currently trading at about 18 per dollar. I found that almost anywhere I could make purchases with dollars. Generally smaller bills are accepted, but change is given in Cordobas. One pleasant fact is that
the same exchange rate is given pretty much everywhere. I was able to exchange dollars for Cordobas in my hotels and get the full rate, which was actually slightly better than what banks provide.

The Pacific coast is undeveloped, and beachfront lots are inexpensive by any measure. There are several resort and condominium developments being built now, but in the interim the infrastructure is still second-world. Surfing is popular with
visitors.

In common with Thailand, the vast majority of inhabitants are poor, primarily concentrated in agriculture. Unemployment is high, and so you can hire a gardener, a cook, or a housekeeper for around $150/month. For most anglophones, Spanish
is easier to learn than Thai.

The capitol, Managua, has a similar latitude to Bangkok. In the semi-arid Pacific area, there are two seasons, wet and dry. In the 9-month dry season daytime temperatures climb into the 90s during the day and fall into the pleasant low 70s
in the evenings. During the wet season, the climate is subtropical, with rain showers and thunderstorms during the day. Temperatures still range from 70-90, but the humidity is much higher.

The airport in Managua is new and quite modern. It’s a 2 hour flight from Miami and 3 hours 45 minutes from Atlanta. At immigration you pay a 5 USD arrival fee. There was no departure tax to be paid when I left, although I’m
not sure if one was included in the ticket price. Airport security is equivalent to that in US airports, with the inclusion of a search of carry on bags just before boarding.

Rental cars are available from well-known companies such as Avis, Hertz, Dollar, etc. I rented a small Toyota “Yaris” sedan with standard transmission and AC for $185 per week. I didn’t take the collision coverage, which was almost
double the rental amount and not full-coverage.

Managua itself is not an exciting city, having grown as a sprawl from small beginnings. There is one section that contains most of the large business hotels, shopping, cinemas, and good restaurants. Outside of this area I didn’t consider
venturing.

Having covered the good things about Nicaragua, I must admit to some deficiencies vs. Thailand.

Generally the native cuisine is not extraordinary, being generally quite bland and based on meat, rice, and beans. There are a good variety of restaurants in Managua, but outside the capitol pickings are somewhat limited. Food is quite cheap.
For example, a local beer generally costs about $US 1 at restaurants. A good steak dinner can be had for less than $10.

The road system is limited, with fairly good roads linking Managua with the other main cities of Granada and Leon. The transportation system for locals consists of buses, many of which seem to be surplus school buses from the north. There
are many taxis in the towns, but not up to Bangkok standards. And last but not least, there is not the naughty nightlife that is found throughout Thailand.

Recently Daniel Ortega was elected President of the country, causing some trepidation. Ortega was the leader of the Sandanistas when they ran the country in the 1980s, and took a populist line with the voters. He was elected with less than
40% of the votes, so he has less than a mandate to make radical changes. In addition, he and the former Sandanista leadership got rich when they were previously in charge, and now as businessmen are less than eager to kill the golden goose.

Given that the Thai government is making things more and more difficult for foreigners, someone looking for a plausible alternative might want to give Nicaragua a look-see. While Thailand is called the “land of smiles,” the
friendly people in Nicaragua certainly deserve it as much, if not more.

I went to visit a new development being constructed on the Pacific coast about 90 minutes outside Managua. This development, called Gran Pacifica, will eventually contain a mixture of condos and standalone houses plus a golf course. The first
condo building is nearing completion, as are a few of the houses. Given that the developer owns 2500 acres of land along 3 miles of beach, it’s hard to see how this won’t be very attractive to retirees and snowbirds, esp. once the
golf course in playable sometime in 2008. I expect other similar developments to spring up as well.

Stickman's thoughts:

A very nice submission this. Nicaragua sounds like a real option, especially for Americans. One thing that is almost never discussed about Thailand is its distance from every corner of Farangland.