As one of Central America’s crown jewels, Costa Rica is a country on the up. With a rising GDP and more foreign direct investment (FDI) than ever before, Costa Rica is a key location for international expansion, with entrepreneurs from all four corners of the globe establishing a presence within the country to utilize its strong economy and well-educated workforce.
Below, we’ve put together some of the biggest reasons why Costa Rica continues to impress business investors and offer our advice on incorporating a new business in the country to maximize profitability and add an additional revenue stream to your organization.
Paving The Way in Sustainability
For businesses considering expanding into Costa Rica, green energy and eco-projects are a key industry where growth and demand are at an all-time high. After announcing ambitions to become a carbon neutral country by 2021, Costa Rica managed a record-breaking 300 days using only renewable energy toward the latter end of 2018, beating its own 2015 record in the process. Thanks to government energy plants and private investments, the country has paved the way for sustainable energy, encouraging others to take a leaf out of its books.
As of October 2018, electricity generated from water, biomass, sun, wind, and geothermal energy accounts for more than 98 percent of the energy produced in the county, but there is still a need for additional energy sources and innovations to take the country to 100 percent. As a business that manufactures eco-friendly motor vehicles or charging points, creates solar panels or offers funding for businesses wanting to become carbon neutral, there are endless possibilities to grab a slice of the market and appeal to eco-conscious consumers.
Costa Rica continues to impress on an environmental front after launching a new virtual currency, that’s designed to encourage recycling and reduce waste in the country. After an experiment in 2017, the scheme is now being rolled out across the country, and the ‘circular economy’ project offers money in exchange for glasses, plastic bottles, and tin cans. Across the country, more than 4,000 tons of waste is produced every day, and 80% of waste that’s sent to landfill could be recycled, so there are new opportunities for businesses wanting to get into both private waste management, recycling schemes, and other green initiatives.
Thriving Technology Sector
As a foreign entrepreneur, your first thoughts of Costa Rica may be its stunning rainforests and warm and welcoming climate, but its high-powered technology sector is putting the country on the map for a whole different reason. Across IT software development, research, and development of new technological products, financial technology, the manufacturing of electronics, and medical technology (also known as MedTech), Costa Rica has been able to export more than 4,300 technology product and service lines to 150 countries.
Thanks to years of growth and generous tax incentives to foreign investors, more than 300 high-tech companies have a presence in Costa Rica, and a quarter of those are Fortune 100 organizations. The World Economic Forum has ranked Costa Rica as the number one spot for innovation in Latin America, and technology hubs like San José are fueling innovation.
It’s thought that the country’s educational system and flow of STEM graduates (science, technology, engineering, and maths) are helping the country to stand head and shoulders on the technology front, and encouraging companies such as Amazon to invest. As of 2019, Amazon has more than 6,000 employees in Costa Rica, not only in distribution and customer service but in a research and development hub aiding its Latin American growth.
Another advantage of Costa Rica is in its trade agreements, with the country securing deals with key markets around the world. As well as treaties with Central America, Canada, CARICOM, Chile, China, the Dominican Republic-Central America-United States (CAFTA-DR), the European Free Trade Association and the Association Agreement between Central America and the European Union, Costa Rica also has several bilateral investment agreements with nations including Germany, Spain, the Netherlands, Taiwán, the Czech Republic, Switzerland and Qatar, offering businesses a unique position on the world stage.
As the United Kingdom looks for new trading partners post-Brexit, Latin American countries like Costa Rica will be at the top of the list, and several key Latin American figures have already expressed their interest in a unique trade deal – but that’s just one country. Costa Rica is a proactive nation and works hard to connect the dots between it and other territories, and is currently securing treaties such as the Alianza del Pacífico, the Acuerdo sobre Comercio de Bienes Ambientales (EGA), the Acuerdo sobre Comercio de Servicios (TiSA), and the Centroamérica y la República de Corea. As one of its close allies, Israel is another contender for a future trade agreement, after Director of Costa Rica’s Trade Office, Dyana Cordero, announced plans to meet with Israelis to discuss a potential agreement.
Progressive Political Landscape
You only have to look at the political chaos in countries such as Venezuela to see why some foreign investors are put off expanding overseas. The good news, however, is that those who wish to incorporate a company in Costa Rica can do so without worry, as the country is home to one of the most stable and secure governments and political landscapes across Latin America.
Indeed, in the summer of 2018, Costa Rica’s Supreme Court announced that its same-sex marriage ban was unconstitutional, and must be changed within 18 months, a clear sign that the country is swaying towards Western values, attitudes, and ideals both in the business world and in the way society behaves. With new President Carlos Alvarado working hard to improve public security, law enforcement, and foreign investment, the future looks bright.
Incorporate in Costa Rica with Biz Latin Hub
With a strong business plan and the right products or services, Costa Rica could be the ideal location to expand your business too. Whether you’re a CEO with offices on all four corners of the globe, or a startup business ready to take your organization to the next level, enlist the help of the professionals at Biz Latin Hub when launching a business.
To find out more about the wide range of services available to you, and to speak to one of our local Costa Rican business experts, send an email to [email protected] today.