Costa Rica is a country in Central America known for its natural beauty and openness to visitors from around the world, however, what many don’t know is that it’s one of the fastest growing economies within Latin America and presents diverse opportunities for businesses looking to expand their operations. With strong economic growth, high education of levels, and booming tourism and service sectors, for many, Costa Rica is fast-becoming the Latin American commercial jurisdiction of choice.
In this article, we’ll take you through you a few of the many reasons as to why you should consider expanding your operations to Costa Rica.
Expand to Costa Rica – Strong Economic Development
Costa Rica is the second most prosperous country in Latin America, according to the Global Index of Prosperity. This index highlighted factors such as individual freedom, government stability, and health. Despite having a traditionalist society, Costa Rica is actually an extremely liberal country that prides itself on tolerance, equity, and respect. This development manifests itself in the economic sphere through GDP growth year after year. In the past 10 years, the country has seen steady economic growth of between 2.2% and 4.9%, laying the foundations for a strong economy. This has given rise to the development in a range of national sectors include tourism, professional services, and medical equipment exportation. The strength of these sectors has encouraged the growth in businesses looking to register a Costa Rica company.
Also, a curious topic of discussion in Costa Rican economic circles is the nations inflation rate. In 2018, Costa Rica had an inflation rate of approximately 2%, which is significantly lower when compared to the rest of Latin America in the same year, who averaged 6.05% (though it should be noted that Venezuela’s hyperinflation has had a significant effect on the overall Latin America inflation numbers).
Costa Rica is also one of the safest countries in Latin America. In a Gallup survey, Costa Rica ranked 7th among the safest countries in the region. And in 2017, The Global Peace Index of the Institute of Peace and Economics, Costa Rica was ranked at number two in Latin America and 35th worldwide. Costa Rica is one of the most established democracies in Latin America and is one of the few countries globally that does not have an active military force.
It is worth noting that Costa Rica grants temporary residency to foreign investors that invest more than USD$200,000 or more in Costa Rica (in local companies, projects etc). This can lead to permanent residency and even citizenship for those interested in moving to Costa Rica on a more permanent basis
Highly Educated Workforce
After the abolishment of the army, the national savings were transferred to education and allowed for the financing of free public education. Currently, primary and secondary education is not only free but also mandatory; this has led to a 98% literacy rate. By mandate of the Political Constitution, the four public universities of Costa Rica receive a general annual percentage of GDP. University classes are often taught by well-educated professors, many of whom have studied at recognized European or North American educational institutes. The public education system makes top-level higher education very accessible and even encourages all citizens to undertake studies. As a result, the labor force is highly-educated and thus attractive to foreign direct investors in a variety of sectors who require local staff to manage business operations. This, in addition to the high English fluency of the population, ensures that foreign companies looking to expand to the region have access to highly capable, trained and available human capital.
Clean Energy Leader
Costa Rica is a world leader in the installation and operation of renewable energy. In fact, 100% of power generated within the country is generated from five different renewable sources; hydropower, wind, geothermal energy, biomass and solar. This ensures that there is a ready supply of energy, thus, Costa Rica positions itself as a world leader in addition to providing a great location for the establishment of cutting edge services and technology associated with the renewable energy sector.
In Central America, Costa Rica has a National Center for Energy (called the ‘CENCE‘) that controls the flow of national electricity. This governmental organization guarantees renewable and quality energy and promotes Costa Rica as a leader of this growing sector.
Additionally, the country’s new president, Carlos Alvarado, announced the nations plan to become the first decarbonized country in the world. He calls it a challenging, but a beautiful task to abolish fossil fuels in the economy to make way for the use of renewable energies. After setting a record in 2015 for the most consecutive days of using solely renewable energy, Costa Rica is beating themselves by going 300 straight days using only renewable energy in 2018.
Great Healthcare System
The Costa Rican health system is world renowned. In 2017, the journal, ‘International Living’ ranked it as the second best health system in the world. With highly trained professionals and high-level facilities, medicine in Costa Rica is mainly developed publicly through the Costa Rican Social Security Fund, which is mixed with the private sector in some cases. In 2017, Costa Rica received more than 55,000 medical tourism visitors, of which around 44,000 came from the United States and Canada. These tourists can save up to 80% in costs of surgical procedures when compared to more developed countries.
Next Steps in the Costa Rica Expansion Process
With these and many other reasons, Costa Rica is considered great jurisdiction for starting or expanding a business too. In order to leverage the great potential that Costa Rica has, it is always advisable to work with local experts that can help support you with the key Costa Rica company formation steps. Here at the Biz Latin Hub, we understand the local Costa Rican business environment and we can help you to navigate its complexities. We pride ourselves on providing our clients with a comprehensive suite of market entry and back-office services that will allow them to successfully establish themselves in th region.
Now is the time to consider expanding your business expansion to Costa Rica. To get started, please contact the Biz Latin Hub team here.