Business opportunities in Costa Rica – Part 1

Costa Rica is known around the world for having an impressive variety of sectors that are showing growth, with large investment being pumped into the economy as a result. Examples of these industries include the exportation of coffee and bananas and a booming tourism industry. However, there are also business opportunities in Costa Rica in more modern service-based sectors as the country strives to respond to new market necessities.

The country continues to diversify its economy and attract investments across various sectors. Business opportunities in Costa Rica are huge, especially in emerging service-based industries, as the country adapts to evolving market demands and technological advancements.  The OECD forecasts significant economic growth for Costa Rica in 2024, reflecting the country’s efforts to diversify its economy and attract investments across multiple sectors.

This means more interest in how to register a company in Costa Rica, particularly in emerging service-based industries as the economy responds to changing market dynamics and embraces technological advancements.

Economic activity is mainly in the service sector, agriculture and tourism. Although these are the main sources of income for the country, with the emergence of better and more advanced technology in the last two decades or so, business opportunities in Costa Rica have started to develop in less traditional sectors.

Continuing on from Part 2: Exciting business opportunities in Costa Rica

Top business opportunities in Costa Rica

1. Tourism

For decades now, tourism has been one of the most important contributions to the Costa Rican economy. During the first quarter of 2018, the country registered income of $1.181 million, representing an increase of 7.2% compared to the same period in 2017. In 2019, tourism in Costa Rica represented 4.8% of the GDP.

Since then, this contribution has continued to grow, reflecting the importance of tourism as a key economic driver for the country. In 2021, tourism employment rose to 150,483 people, marking an increase compared to the previous year in 2020. This means there are many business opportunities in Costa Rica.

The tourism sector is greatly aided by a population with a good level of English and a high quality of life. Costa Rica has been ranked as one of the happiest countries in the world in recent years, and according to the latest study, holds the number one spot in Latin America. This high life index has played an important role in ensuring a constantly increasing number of tourists into the country.

Tourism categories in Costa Rica

1. Coastal: Costa Rica, as hinted at in the name, is a country rich in natural resources and has many areas of natural beauty. Furthermore, the country is a perfect destination for one of the most practiced and growing sports in the world, surfing. Owing to the strong tides that characterize many of the beaches, it has a growing reputation amongst surf enthusiasts. The country has twice hosted the World Surf Championship.
   
2. Ecotourism: Costa Rica’s abundant biodiversity makes it an ideal destination for eco-tourism. Costa Rica boasts a remarkable range of tourism offerings, highlighted by an extensive network of national parks and protected areas covering about a quarter of the nation’s territory. This impressive natural wealth makes it an exceptional destination for those seeking refuge from urban life and for nature enthusiasts.
   
3. Adventure tourism: Costa Rica is known for having vast mountain ranges and as mentioned, magnificent coastlines. Especially in mountainous regions, this allows for many adventurous sports such as ziplining, abseiling, rafting, etc. Monteverde is the main destination for this type of tourism.
   
4. Medical tourism: This new trend is growing in popularity due to the low cost of medical care in Costa Rica (similar to Mexico) compared with the high quality of professional doctors and private health institutions. Procedures such as dental surgery, plastic surgery and other minor operations are being sought after more and more by tourists who are also looking to combine a procedure with tourism.
   
5. Hosting conventions and conferences: The country recently sanctioned the building of the 5,600-capacity National Centre for Conventions and Conferences. This is the latest development in Costa Rica’s expansion into the world of conventions. An investment of USD$35 million, suggests there is a lot of business opportunities in Costa Rica.

2. Electronic component manufacturing

The growth of electronic component manufacturing dates back to the arrival of Intel at the end of the 20th century. It was a moment that firmly placed the country on the map in terms of good production and as a provider of innovative technological services. Over the years, Costa Rica increased global competition in these sectors, attracting global conglomerates to invest in the national industry.

In the last decade, Costa Rica has been one of the largest global providers of electronic components, shipping their products to some of the leading countries in the world. In 2010, Costa Rica became the US’ second largest provider of electronic components, providing over 10% of the products imported by the US.

Why is Costa Rica so competitive in electronic component manufacturing?

There are many reasons ranging from a stable political system to the population itself. See some of the main reasons below:

• A highly educated population, with almost no illiteracy, free primary and secondary education, and investment in professionals with careers in technology. These careers were supported by the government as a strategy to align the country amongst the most economically liberal and advanced in the world.
  
• Ease of finding skilled and bilingual labor is used at the moment of exporting and creating relationships with English-speaking or bilingual markets, making Costa Rica a Latin American leader in the sector. This is one of the biggest strengths in the country and has positioned the country as one of the Latin leaders.
  
• The political and legal climate of the country is incredibly favorable and open to exporting these products. There are various tax exemptions through customs-free zones, free market spaces which bring large amounts of business to the country, and the public, political and economic security to Costa Rica, especially when compared to other Latin countries.
  
• The eroding relations between Mexico and the US have also been crucial in boosting Costa Rica’s platform. With the former losing favor with the latter, business opportunities in Costa Rica have risen. Trade in this sector has doubled between Costa Rica and the US since 2000.

3. Driving innovation: Strategic investments

An example of the growth in the production of precision goods is the 15 million dollars announced by Microtechnologies this year. This investment will be used to develop a new, high-tech manufacturing plant and will represent a boost of 30% of its current locations. The US-based multinational has pledged to produce and assemble parts used in the automotive, medical and aerospace sectors.  

This sector is considered a non-traditional export market, compared to fruit or coffee, however, it has progressively become a strategic business opportunity and an important source of Foreign Direct Investment (FDI), as well as creating jobs domestically. One final benefit, is that the steady trajectory the world economy is taking, becoming more and more dependent on technology, the electronic component industry will only grow.

FAQs when doing business in Costa Rica

Biz Latin Hub can help you find business opportunities in Costa Rica

To start developing your company in Costa Rica, it is necessary to do some groundwork on the best investment opportunities in the country and to work out how to enter the market.

Don’t hesitate to reach out to our team that can offer localized expert support in a wide range of market entry and back-office services. Reach out to our bi-lingual Country Coordinator to see how we can support you in Costa Rica. 

Interested in accessing a Costa Rican market but are unsure where to start? Check out the video below and see how we can support you.