Costa Rica is a country open for business and particularly to foreign investment. The Costa Rican government and its laws specifically encourage direct foreign investment.
This attitude pro-business attitude is shared by the two major political parties and has been actively implemented since the early eighties. Over the past 15 years the continual improvement of conditions destined to attract foreign companies has been the "Costa Rican trademark".
To support this effort, Costa Rican Investment and Trade Development Board (CINDE), a private non-profit organization, was set up to assist and guide investors and companies in the set up of their operations in Costa Rica.
A further step on this effort was the establishment of legislation to provide significant tax and operational incentives to companies in export related activities. These particular incentives are: the export contract, the free zone and the temporary admission system, all of which include total or partial tax exemptions and expedite customs clearance services among other simplified operational aspects.
Costa Rican laws, regulations and practices foster competition and do not discriminate between locals and foreigners, for the conduct of business. The only exceptions to this are the entities that are constitutionally precluded from total foreign ownership such as telecommunications, energy generation and insurance. Tax, labor, health and safety laws are also business and investment positive and are designed to help rather than to hinder.
This investment-friendly climate and government policy of making Costa Rica "the Silicon Valley of Latin America" has enticed commercial leaders such as Acer, Microsoft, GE, Abbot Laboratories, Continental Airways and Intel Corporation to make sizable investments here, both financially and physically, with major production and distribution facilities.
Western Union has chosen Costa Rica to host its Latin American regional operations center.
Costa Rica is now earns more from high technology exports (electoronics, pharmaceuticals and software) than from coffee, bananasm, pineapples or even its lucrative, thriving tourism industry.
The World Bank has given Costa Rica an excellent bill of overall political and economic health. The bank lauded the country as possessing "one of the most stable and robust" democracies in Latin America. It went on to praise the Costa Rica's "healthy economic growth rate" and "some of the best social indicators" on the continent.
The Economist Intelligence unit in March of this year listed Costa Rica as the 7th most politically and socially stable country on the planet - an ideal country in which to invest.
According to a report issued by the CINDE, thirty multinational firms set up new offices in Costa Rica in 2008, bringing $428 million in investment. A number of IT multinational companies (Intel, Microsoft) and pharmaceutical multinational companies (Abbot Laboratories, Johnson, Merck Sharp and Dome) have set up production units in Costa Rica. Companies such as Procter and Gamble, HP and Dell have also installed their regional customer service offices for the American continent in San José. In addition an important high quality textile industry has been developed.
The government maintains an open environment towards foreign investment especially in the high technology end. Generally speaking, foreign investment is concentrated in manufacturing (45%) and agriculture (25%, mainly banana and coffee interests). Other investments are placed in the railways, tobacco, communications, airlines, government bonds, and real estate. The US, Costa Rica's major foreign investor (78% in 1998), has interests chiefly in computer chip manufacturing, agriculture, petroleum refining, and distribution, utilities, cement, and fertilizers. The continued high level of trade with the US has been conducive to private foreign investment, especially in export industries. Investment incentives include constitutional equal treatment guarantees and free trade zones. Foreign direct investment in Costa Rica in 1998 was $530 million, or 5% of GDP.
Another industry that has been strongly flourishing in Costa Rica is the opening of medical equipment manufacturing companies. Foreign investors have not only found that Costa Rica’s political environment is stable and offers attractive incentives, but that the workforce is one of the most highly educated in the region.
Foreign investment is also strong in the real estate and hospitality industry. Costa Rica hotels have grown to include large exclusive beach resorts in the Northern Pacific Coast visited by high profile business people and Hollywood stars.
Costa Rica has enjoyed an average income that is among the highest in the region. And Costa Rica enjoys the fame as the Safest Latin American Country for Multinational Investment.
Now Costa Rica has already done so much and is ripe for foreign investment politically and physically. Costa Rica is building a competitive advantage for itself and the many high-tech companies who have chosen or are pondering the option to operate here. It is a country at a turning point in integrating itself into the modern world economy.
Costa Rica - the principal emerging economy in Central America
