Starting a business in Costa Rica can be a great opportunity to explore exciting markets in one of the most attractive commercial jurisdictions in Latin America. With strong sectors, including the service industry, electronic components, and tourism, Costa Rica has a range of diverse markets that are of significant interest to smart foreign investors.
However, as in any new country, it is necessary to have at least a sound knowledge about how the business culture works before entering the local marketplace.
Costa Rica has witnessed consistent gross domestic product (GDP) growth over the last half-century, totaling a GDP of $61.77 billion in 2019 (all figures in USD). The Central American nation has also seen a rise in gross national income (GNI) — considered a key indicator of general prosperity — which more than tripled in the last 20 years to reach $11,700 per capita in 2019. That figure places the country as an upper-middle-income nation, based on international standards.
Costa Rica is known for being one of the most developed nations in Latin America, and is a major recipient of foreign direct investment (FDI) in the region, altough it is relatively small in size. The country is also a popular destination among ex-pats and tourists from the United States and Europe. Additionally, Costa Rica has some of the lowest crime statistics in Latin America.
If you are considering starting a business in Costa Rica or are already present in the country, read on to what you should take into account when doing business there. Or go ahead and contact us now to discuss your options.
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Business etiquette in Costa Rica and the Central American region
While Costa Rica is a part of the Central American region and shares a lot of its culture and customs due to geographical proximity and shared history, there are points of differentiation that are important to each of the countries in the region. Despite similarities, it is important to treat every Central American country as unique.
‘Tico’ business culture in Costa Rica
Ticos (Costa Ricans) are globally known for being friendly, peaceful and generally relaxed; such characteristics are also prevalent in the business culture.
There is nothing Ticos appreciate more than modesty. Humility is one of the most important values when dealing with Costa Ricans and it directly translates into the business culture. While this doesn´t mean you can´t be proud of and talk up your business, it does mean that this should be done moderately. Do not exaggerate and try not to talk directly about how much you are making unless it is directly related and relevant to the business meeting.
Doing business in Costa Rica – Be patient
Costa Rican´s live a ‘pura vida‘ lifestyle, which literally translates to a pure life, and is a slogan for a relaxed and peaceful society. You must be patient when dealing with public employees and institutions as there can be high levels of bureaucracy in some public institutions. Make sure to be thorough in everything you do (i.e legal procedures, visa applications) to avoid delays and complications.
If you´re dealing with someone new, be prepared to establish a relationship first and to have various encounters before closing a deal. In Costa Rica, as with other Latin American countries, individuals prefer to form a relationship with an individual before they engage in business dealings. Costa Ricans are curious and ask general and unspecific questions regarding your business; it will be up to you to offer specifications. Learn to read their level of interest to see how much you should talk about your business or whether to leave it for a more formal setting at a later date.
The importance of networking in Costa Rica
Costa Rica is a very small country with a population of only 5 million people. As such, in the business world, it seems as though everyone knows each other. This is even truer when operating in a particular business sector. Be respectful and honest to all people you have encounters with and try to maintain a good relationship with the people surrounding you. Business reputation and word spread fast in Costa Rica, especially in tight circles.
Language – learn it!
Even if Costa Rica boasts a high English fluency amongst the general population, try to use simple/straightforward language in meetings conducted in English and allow for clarification and rephrasing when possible to avoid miscommunication of any kind. Learning Spanish or even trying on a few words or phrases will go a long way towards establishing a more trusting relationship with a potential business partner.
When talking Spanish, Costa Ricans tend to speak with more technical vocabulary. Make sure to ask for the meaning or to rephrase the sentence if you don´t understand – this will be seen as you taking an interest in the meeting specifics.
Business attire when doing business
Costa Ricans usually dress smart for business meetings, especially when the nature of the meeting is more formal. However, it should be noted that informal meetings do not require formal dress attire. Men usually dress in dress pants and long sleeve shirts, often interchanging a tie for a jacket, with most public employees dressed in a suit. Women´s clothing varies according to the setting, from simple pants to more elaborate dresses and accessories, according to how formal the occasion is.
Like many countries in Latin America, punctuality is not a strong suit of the Costa Rican population. While many businessmen stay true to the established meeting time, many others will be delayed for any reason and can often be up to 30 minutes late. For this reason, it is better to foresee the worst case scenario. See below some important notes regarding business meetings in Costa Rica.
- Be flexible.
- Be prepared to wait for people to arrive.
- Meetings can run longer than scheduled due to delays.
Try to confirm the time of the appointment with as much notice as possible. This will show your commitment to the success of the meeting in addition to reducing the chance of the meeting being delayed or postponed.
Biz Latin Hub can help you to do business in Costa Rica
While Costa Rica is a very easy going country, it is always better to work with a local partner who is knowledgeable about the country´s business culture and proceedings.
Biz Latin Hub is the trusted local partner of many individuals and companies who has expanded their operations to Costa Rica and Latin America. Get in touch with our team of experts today and we will help you and your business expand in Costa Rica.
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