Vessels sailing under the Nicaragua Country Flag are required to have on board this flag as part of flag state requirements that derive from maritime regulations in the International Code of Signals and the International Safety Management (ISM) Code. These codes are published by the International Maritime Organization (IMO) as an ongoing effort to reinforce maritime safety procedures and communications to the international maritime community. Fleet management companies and ship owners are responsible to ensure that each vessel in their respective fleets have the appropriate flag signage onboard to be in compliance. This flag is used to identify the flag state a vessel is sailing under and to communicate with other vessels under the provisions of the International Code of Signals.

The Nicaragua Country Flag may be recognized as three, equally proportioned horizontal stripes. The stripes appear as sky blue, white and sky blue from top to bottom. The National Coat Of Arms is represented directly in the center of the flag, sitting squarely in the white stripe. The Coat Of Arms is surrounded by a golden circle of text which reads, from left to right across the top, "Republica De Nicaragua", and across the bottom as, "America Central". The emblem inside the text is a triangle pointed upward. Inside the triangle are depicted five volcanoes, representing those that exist in Nicaragua. The Cap Of Liberty, a rainbow and the rising sun are also depicted, rising above the volcanoes. The Nicaragua Country Flag is designated to hold a proportional ratio of 3:5, height to length, respectively. It was officially adopted in 1971, but had been used in it's modern design since 1908. The white was originally intended to recognize the ideal of peace, while the blue colors were meant to pay tribute to the Pacific Ocean and Caribbean Sea.

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