Costa Rica has been accepted as the 38th member of the Organisation for Economic Co-operation and Development (OECD) — an intergovernmental economic organization known informally as “the good practice club” due to its stringent demands for democratic and free market trade practices among its members.
The news will be welcomed by foreign investors operating in the country or looking to register a company in Costa Rica, with OECD membership demonstrating a level of compliance with international norms that will raise the profile of the country and deepen investor confidence, so can be expected to bolster foreign direct investment (FDI).
The OECD counts many of the world’s largest and most-developed economies among its members, and represented more than 60% of global gross domestic product (GDP) in 2019, and Colombia has joined the association since then. With Mexico joining in 1994 and Chile entering in 2010, that makes Costa Rica the fourth Latin American nation to be accepted by the group, alongside three of the region’s biggest and most business-friendly economies.
Announcing Costa Rica’s acceptance, OECD Secretary-General Angel Gurría lauded the country’s longstanding and broad-based commitment to implementing the norms necessary for membership, even in the face of global turmoil.
“We have been impressed that the cross-party commitment to OECD accession that we witnessed during the accession process continued into the ratification phase, despite the pandemic,” Gurría said.
Costa Rica’s acceptance into the OECD on May 25 marked the culmination of more than six years of efforts since the country began discussions regarding its accession, and came just days after Costa Rican President Carlos Alvarado signed-off on legislation to allow the country to complete the membership process.
“Costa Rica is one of the 20 most solid democracies in the world, it is one of the five countries in the world with the greatest freedom of the press and today we are among the 38 with the best practices in the world,” Alvarado said when marking the country’s accession.
Investing in Costa Rica, the OECD’s latest member
Costa Rica was already a popular destination for international investment before achieving recognition from the OECD, and boasts impressive levels of FDI considering the small size of this country of just over five million people.
The country has experienced exponential growth over recent years, with GDP more than quadrupling in the 20 years up to 2019, when it hit $61.8 billion (all figures in USD). That growth saw a concomitant rise in prosperity, with gross national income (GNI) reaching $11,700 per capita — a figure only exceeded in the region by Chile, Panama, and Uruguay.
The country also boasts the second-highest level of English proficiency in the region, as well as a growing professional services sector and tech ecosystem, making doing business in the OECD’s latest member particularly attractive.
The country also has a well-developed manufacturing sector, with pharmaceuticals, electrical machinery, and medical equipment among the country’s key export products. Many manufacturers are based in the highly-incentivised enterprise zones, of which there are more than a dozen around the country.
The United States is by far the largest recipient of Costa Rican goods, with Belgium, Guatemala, the Netherlands, and Panama also key destinations. With the country now accepted into the OECD, it will see greater interest among investors and can expect growth and diversification of its exports.
Biz Latin Hub can assist you doing business in Costa Rica
At Biz Latin Hub, our team of multilingual company formation specialists is equipped to help you get established in the Costa Rican market. With our complete portfolio of back-office solutions, including legal, accounting, commercial representation, and recruitment services, we can be your single point of contact for entering and doing business in Costa Rica, or any of the other 17 jurisdictions around Latin America and the Caribbean where we are present.
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