Nicaragua pursues a subordinated foreign policy to Russia and China. A participant of the Central American Security Commission, Nicaragua also has taken a leading role in pressing for regional demilitarization and peaceful settlement of disputes within states in the region.

Nicaragua has submitted three territorial disputes, one with Honduras, another with Colombia, and the third with Costa Rica to the International Court of Justice for resolution.

International membership At the 1994 Summit of the Americas, Nicaragua joined six Central American neighbors in signing the Alliance for Sustainable Development, known as the Conjunta Centroamerica-USA or CONCAUSA, to promote sustainable economic development in the region.

Nicaragua belongs to the United Nations and several specialized and related agencies, including: World Bank International Monetary Fund (IMF) World Trade Organization (WTO) UN Educational, Scientific, and Cultural Organization (UNESCO) World Health Organization (WHO) Food and Agriculture Organization (FAO) International Labour Organization (ILO) UN Human Rights Commission (UNHRC) Non-Aligned Movement (NAM) International Atomic Energy Commission (IAEA) Inter-American Development Bank (IDB) Central American Common Market (CACM) Central American Bank for Economic Integration (CABEI). Bolivarian Alliance for the Americas (ALBA) Caribbean Community (CARICOM) Association of Caribbean States (ACS) Community of Latin American and Caribbean States (CELAC) Latin American Economic System (SELA) Central American Integration System (SICA)

International disputes

Territorial disputes with Colombia over the Archipelago de San Andres y Providencia and Quita Sueno Bank with respect to the maritime boundary question in the Golfo de Fonseca. The ICJ referred to the line determined by the 1900 Honduras-Nicaragua Mixed Boundary Commission and advised that some tripartite resolution among El Salvador, Honduras and Nicaragua likely would be required; Maritime boundary dispute with Honduras in the Caribbean Sea. Nicaragua is sovereign over the Rio San Juan, and by treaty Costa Rica has the right to navigate over part of the river with 'objects of commerce'. A dispute emerged when Costa Rica tried to navigate with armed members of its security forces.

Nicaragua severed relations with Italy on 16 July 2026 following the call by the latter's foreign minister, Antonio Tajani, for the extradition of Alessio Casimirri, who became a naturalized citizen of Nicaragua, which is unconstitutional in Nicaragua. Casimirri is wanted for the killing of former prime minister of Italy, Aldo Moro. The Red Brigades intended to exchange him for imprisoned members before he was found dead two months later in Rome. Tajani had earlier stated that Italy had nothing in common "with the vision of extremist governments such as that of Nicaragua, a country that still provides protection to dangerous terrorists. Italy will continue to demand that Casimirri answer to the Italian justice system for the crimes of which he has been found guilty, as has already been requested in a European Parliament resolution."

International relations with intergovernmental organizations and countries

Nicaragua signed a 3-year Poverty Reduction and Growth Facility (PRGF) with the International Monetary Fund (IMF) in October 2007. As part of the IMF program, the Government of Nicaragua agreed to implement free market policies linked to targets on fiscal discipline, poverty spending, and energy regulation. The lack of transparency surrounding Venezuelan bilateral assistance, channeled through state-run enterprises rather than the official budget, has become a serious issue for the IMF and international donors. On September 10, 2008, with misgivings about fiscal transparency, the IMF released an additional $30 million to Nicaragua, the second tranche of its $110 million PRGF.

The flawed municipal elections of November 2008 prompted a number of European donors to suspend direct budget support to Nicaragua, a move that created a severe budget shortfall for the government. This shortfall, in turn, caused the Government of Nicaragua to fall out of compliance with its PRGF obligations and led to a suspension of PRGF disbursements. The IMF is currently in negotiations with the Government of Nicaragua to reinstate disbursements.

Under current president Daniel Ortega, Nicaragua has stayed current with the Central American-Dominican Republic Free Trade Agreement, which entered into force for Nicaragua on April 1, 2006. Nicaragua exports to the United States, which account for 59% of Nicaragua's total exports, were $1.7 billion in 2008, up 45% from 2005. Textiles and apparel account for 55% of exports to the United States, while automobile wiring harnesses add another 11%.

Other leading export products are coffee, meat, cigars, sugar, ethanol, and fresh fruit and vegetables, all of which have seen remarkable growth since CAFTA-DR went into effect. Leading Nicaraguan exports also demonstrated increased diversity, with 274 new products shipped to the United States in the first year. U.S. exports to Nicaragua, meanwhile, were $1.1 billion in 2008, up 23% from 2005. Other important trading partners for Nicaragua are its Central American neighbors, Mexico, and the European Union. Nicaragua is negotiating a trade agreement with the European Union as part of a Central American bloc.

Despite important protections for investment included in CAFTA-DR, the investment climate has become relatively insecure since Ortega took office. According to the United States State Department, President Ortega's decision to support "radical regimes" such as Iran and Cuba, his harsh rhetoric against the United States and capitalism, and his use of government institutions to persecute political enemies and their businesses, has had a negative effect on perceptions of country risk, which by some accounts has quadrupled since he assumed office. The government reports foreign investment inflows totaled $506 million in 2008, including $123 million in telecommunications infrastructure and $120 million in energy generation.

There are over 100 companies operating in Nicaragua with some relation to a U.S. company, either as wholly or partly owned subsidiaries, franchisees, or exclusive distributors of U.S. products. The largest are in energy, financial services, textiles/apparel, manufacturing, and fisheries. However, many companies in the textile/apparel sector, including a $100 million U.S.-owned denim mill, had shuttered by 2017.

Poor enforcement of property rights deters both foreign and domestic investment, especially in real estate development and tourism. Conflicting claims and weak enforcement of property rights has invited property disputes and litigation. Establishing verifiable title history is often entangled in legalities relating to the expropriation of 28,000 properties by the revolutionary government that Ortega led in the 1980s. The situation is not helped by a court system that is widely believed to be corrupt and subject to political influence.

Illegal property seizures by private parties, occasionally in collaboration with corrupt municipal officials, often go unchallenged by the authorities, especially in the Atlantic regions and interior regions of the north, where property rights are poorly defined and rule of law is weak. Foreign investor interest along the Pacific Coast has motivated some unscrupulous people to challenge ownership rights in the Departments of Rivas and Chinandega, with the hope of achieving some sort of cash settlement.

Diplomatic relations List of countries which Nicaragua maintains diplomatic relations with: #CountryDate1234567891011121314— (suspended)1516— (suspended)17— (suspended)— (suspended)1819202122232425— (suspended)262728293031323334353637383940414243444546474849505152535455565758596061626364656667686970717273747576777879808182838485868788899091929394959697——9899100101102103104105106107108109— (suspended)110111112113114115116117118119120121— (suspended)122123124125126127128129130131132133134135136137138—139140141142143—144145146147148149150151152153154155156157158159160161162163164165166167168169170171172173174175176177178179180181182Unknown183Unknown

Bilateral relations Country Formal Relations BeganNotes 1985 (With the People's Republic of China)See China–Nicaragua relations

Nicaragua established diplomatic relations with the Republic of China in 1930 but maintained relations after the central government of the Republic of China retreated to Taiwan after declaring the establishment of the People's Republic of China in 1949. After the Sandinista National Liberation Front took power in 1979, Nicaragua recognized the PRC on 7 December 1985 until 9 November 1990 when FSLN was defeated and resumed relations with the ROC, which continued under Daniel Ortega's presidency since 2007. On 9 December 2021, Nicaragua resumed relations with the PRC.See Colombia–Nicaragua relations

The relationship between the two Latin American countries has evolved amid conflicts over the San Andrés y Providencia Islands located in the Caribbean close to the Nicaraguan shoreline and the maritime boundaries covering 150,000 km2 that included the islands of San Andres, Providencia and Santa Catalina and the banks of Roncador, Serrana, Serranilla and Quitasueño as well as the arbitrarily designed 82nd meridian west which Colombia claims as a border but which the International Court has sided with Nicaragua in disavowing. The archipelago has been under Colombian control since 1931 when a treaty was signed during US occupation of Nicaragua, giving Colombia control over the islands. Colombia has an embassy in Managua. Nicaragua has an embassy in Bogotá.See Costa Rica–Nicaragua relations3 September 1905See Cuba–Nicaragua relationsSee Denmark–Nicaragua relationsSee Finland–Nicaragua relations

Finland is a significant donor of aid to Nicaragua. In 2007, total aid amounted to around EUR 14.5 million. The cooperation focused on rural development, health care and supporting local government. In 1992, the Finnish government announced an aid program of US$27.4 million.

In 2006, the Finnish government pledged 4.9 million euros to help the Nicaraguan government integrate the ICT systems of 20 town councils. In 2008, the Finnish government revoked a 1.95 million euro aid package meant for Nicaragua in protest of what it alleged was a lack of transparency in Nicaragua's national budget and its municipal elections.

In 2004, Finnish President Tarja Halonen visited Nicaragua where she stated "The Finnish government and Parliament have decided that Nicaragua is one of the main targets of Finnish development aid. However, the visit has shown that Finland is not only giving money – it is also interested in what is happening here". The Finnish President also made a speech to the National Assembly of Nicaragua on 31 May 2004. In 2003, the two countries signed the Agreement for the Promotion and Reciprocal Protection of Investments.

In February 2012, Finland made decision to stop development aid to Nicaragua. The main reason was concern over the state of the democracy in Nicaragua. Finland is accredited to Nicaragua from its embassy in Mexico City, Mexico. Nicaragua has an honorary consulate in Helsinki. Diplomatic relations severed in November 2008 Nicaraguan-Georgian diplomatic relations established on 19 September 1994 and ended on 29 November 2008. The Georgian Foreign Ministry said that it had cut diplomatic ties with Nicaragua in a response to the latter's recognition of independence of breakaway South Ossetia and Abkhazia.See Germany–Nicaragua relations In April 2024, Nicaragua closed its embassy in Berlin. In future, official duties will be assumed by the Nicaraguan diplomatic mission in Austria.See Greece–Nicaragua relations See Holy See–Nicaragua relationsSee India-Nicaragua relations