THE BRIDGE TO SUCCESS IN COSTA RICA

Let’s get to know Costa Rica in more detail – starting with its fascinating market.

The Republic of Costa Rica has a population of over 5,1 million people and is one of the most economically and politically stable countries in Central America. It is also the only state in the area without a permanent standing army, following its abolition in 1948.

The country enjoys one of the highest standards of living in the region. Costa Ricans also enjoy a high life expectancy – an average of 79.28 years, as of 2020.

This prosperity and stability has led to a wealth of opportunities to the PR, media, and communications industries, with businesses open to growth and development and a vibrant media landscape to support public relations.

The country is an excellent hub for business and trade due to its geographical location at the heart of the Americas, with ports on both the Pacific and Atlantic coasts.

In fact, Costa Rica’s investment climate has been favorable for many years. Foreign direct investment is high, and has been a significant contributor to economic growth. 

In addition, the Costa Rican government has put in place measures to counter challenges faced by the country, including rising operating costs, a complex legal system, bureaucracy and infrastructure issues, and these actions have contributed greatly to the ease of doing business.

Freedom of the press and expression are highly valued in Costa Rica – unlike other Latin American countries which are marked by frequent violence against press representatives.  The country has “the best record of respecting human rights and free expression in Latin America”, according to Reporters Without Borders.

Costa Rica has a vibrant media sector, with a wide range of public and privately owned newspapers, television outlets and radio stations. The country is home to:

• eleven major newspapers
• eight major news portals
• and over 70 radio stations which legally broadcast nationwide.

Stability

Probably the most economically stable country in Central America, Costa Rica’s current GDP is around $54,35 bn  – the third highest in Central America. Despite an expected recession in Latin America following the global economic crisis, its economy is set to grow by around 2,3% in 2023, according to the OECD Economic Outlook.

Costa Rica remains one of the most attractive Latin American countries in which to do business. The country ranks 61st out of 190 international economies, as measured by the World Bank’s Ease of Doing Business Survey.

Easy of doing business

Starting a business in Costa Rica takes very little time, involving nine procedures over 22.5 days on average. Other Latin American and Caribbean locations take an average of 31.7 days.

Exportation

Costa Rica’s traditional agricultural exports of pineapples (the world’s largest exporter), bananas, coffee, sugar and beef still make up the backbone of the country’s commodity-based exports.

In recent years, a wider variety of industrial and specialized agricultural products, high-value-added goods and services such as medical devices have further bolstered Costa Rica’s exports. Its main industrial products are medical instruments, integrated circuits, orthopedic appliances, optical fibers, electronic components and food processing. 

These goods, along with pineapples, bananas, dairy products and coffee, are the country’s main export products, and are mostly sent to the United States, Netherlands, Guatemala, Mexico and Belgium.

Tourism economy

Tourism continues to add to the foreign exchange too, as Costa Rica’s impressive biodiversity makes it a prime destination for ecotourism. Foreign investors remain attracted by the country’s political stability and high education levels, as well as the incentives offered in its free-trade zones. 

As a result, Costa Rica has one of the highest levels of foreign direct investment per capita in Latin America. In 2021, FDI doubled to $3.2 billion, while several multinational companies have set up hubs in the country over the last few years. 

Costa Rica is the most visited nation in Central America, and the tourism sector is one of the fastest growing in the country, becoming the largest source of foreign revenue. On its own, it has earned more foreign revenue than exports of bananas, pineapples and coffee put together.

2 million foreigners visited the country in 2022, resulting in $ 1.48 billion in revenue. In 2021 tourism contributed 6% of the country’s GDP and was responsible for 150,000 jobs.

Attractive to investors

Investment is encouraged due to the country’s high standards of living, political and economic stability, and excellent educational system.

Costa Rica also has free trade agreements in place with the European Union, the United States, Canada, Mexico, China, Singapore, the rest of Central America and the countries of the Caribbean, among others. 

The US-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) came into effect on 1st January 2009 and has increased FDI in key sectors of the economy, including the insurance and telecommunications sectors, which have been opened up to private investors. 

The country was ranked second for innovation in Latin America by the World Economic Forum (WEF), and also provides one of the most attractive and cost-effective tax incentives of any country in the region.

San José is the largest city in Costa Rica, with a population of 1,462,000, and is home to more than 50 private universities. As a result, Costa Rica boasts the best education levels in Central America.

The capital is the seat of the national government, the focal point of its political and economic activity, and the country’s central transportation hub.

Although few people live in the city center, it is the most crucial business hub in the country. The city is known as the Silicon Valley of Latin America, and was named the Ibero-American Capital of Culture in 2006.