Costa Rica is undoubtedly an interesting location for any business owner, either local or expat. There are obvious choices within the tourism industry – medical tourism, vacation tourism and eco-volunteer tourism. Why not open a Turnkey eco-lodge or bed and breakfast; perhaps an import-export business, U.S. franchise, or even open a restaurant or bar, consulting firm, or a specialty shop catering to North Americans? Not your cup of tea? This tiny country’s economy has transformed over the past decade, moving away from its longtime dependence on agriculture to a bright new future based on technology and microprocessor production and tourism. Costa Rica has been dubbed the “Silicon Valley of Latin America,” and has attracted commercial giants such as Amazon, Panduit, Microsoft, GE, Acer, Abbot Laboratories, Western Union, Continental Airways and Intel Corporation. So what are the benefits of owning and operating a business from Costa Rica?
- Economical pay – That’s right. Minimum wages in Costa Rica average at $3 per hour and covering your employees benefits are a fraction of what the costs are in other countries: like the USA, where an employer might pay as much as $13,000 for an annual premium for employer-sponsored family health coverage; according to the 20161 Employer Health Benefits Survey; or like Italy, where the government takes care of the healthcare, but the average business owner pays on average 43.4% in labor tax and contributions, according to the World Bank at doingbusiness.org. Costa Rica can offer an affordable solution to having employees. FYI the unemployment rate in Costa Rica is very low in comparison to the United States due to strict Labor Laws, they like to grant 90% of all jobs to Costa Ricans, allowing any corporation to hire 10% of its employees from anywhere in the world.
- Location – In addition to its political, social and economic stability, Costa Rica enjoys a strategic location and preferential market access, a highly educated workforce as well as infrastructure geared to import-exports. Business travelers will enjoy an advanced telecommunications system, modern infrastructure and an excellent array of hotels and restaurants while visiting or working in Costa Rica.
- Free Trade Zones – With 2 free trade zones known as Zona Francas, and 1 under construction, the Commercial sector, both public works and private works is strong in Costa Rica, showing a constant rise each year in expenditures, Government projects in 2016 maintained stability due to the financing of large developments such as the Reventazón Hydroelectric Plant in the Caribbean region and the City Mall in Alajuela. 2017 already has 14 real estate commercial projects underway – one of which is Escazú Village in which there is an investment of over $100 million, according to Colliers International. According to CentralAmericadata.com, 3 private medical centers are planning to invest $55 million in the renovation and construction of infrastructure in the next 5 years. In the district of San Rafael Escazú, San José province, an application was filed to construct a project called “Oficentro GTU” and according to the document a global investment is foreseen of $34 million. All of this positive expansion in the economy will undoubtedly boost Medical Tourism, jobs and real estate development and sales again during and upon completion.
- Business Incentives – The Costa Rican government provides incentives, usually in the form of tax exemptions and grants, for business in the following industries: tourism, forestry, agriculture, and certain import/exports. There is also AMCHAM – the Costa Rican – American Chamber of Commerce and The US Embassy also has an entire office dedicated to assisting US Expats with business operations, imports and exports.
- Banking – There are over 20 privatized banks and 3 National Banks to chose from and opening a corporation is fairly simple and takes about 3 months with assistance from an attorney.
- Digitization – Great news! Records for tax registrations are digitalized so any permitting and licensing neccesary to start the business are available through and online digital platform, including construction permits, buiklding permits, sanitary permits and property transfers. Trademarks, Insurance, Municipal taxes and any and all services can be paid electronically.
Costa Rica has been building a competitive advantage for itself and the many high-tech companies who have chosen to operate here. It is a country at a turning point in integrating itself into the modern world economy. Those doing business here will have the inside track. The World Bank has given Costa Rica an excellent bill of overall political and economic health publicly stating that Costa Rica is “one of the most stable and robust democracies in Latin America.” It went on to praise Costa Rica’s “healthy economic growth rate” and “some of the best social indicators on the continent.” So what are you waiting for?