Foreign Direct Investment in Latin America(FDI): Costa Rica Racks Up US$3.533bn Through Q3 2025

Costa Rica has once again proved itself to be one of the most attractive destinations for foreign direct investment in Latin America. According to the new report by the Costa Rican Foreign Trade Promotion Agency (Procomer), the country recorded US$3.533 billion in FDI between January and September of 2025, an increase of 4.5% when compared with the same period of 2024.

Costa Rica’s performance during the first nine months of 2025 comes at a time when global capital flows are being described as cautious due to financial tightening and the reconfiguration of supply chains.

Manufacturing the Most Important Sector for FDI

Once again, manufacturing was the largest destination for foreign investment in Costa Rica, taking up US$2.856 billion or over 80% of total FDI between January and September of 2025. This continues the trend of Costa Rica successfully attracting high-value-added manufacturing investment over the last few years, specifically in sectors like medical devices, advanced electronics, precision manufacturing, and life sciences, where the country has been a regional leader in FDI.

Costa Rica continues to offer multinational corporations a combination of skilled and educated workforce, strong IP protections, political stability, and integration into global value chains. Additionally, Costa Rica has an advanced manufacturing ecosystem with strong linkages between multinational corporations, local suppliers, universities, and technical training institutions.

A Tough Year Made to Look Easy

General Manager of Procomer, Laura López, explained that, given the current international environment marked by financial adjustments, investors’ prudence, and value chain reconfigurations, Costa Rica obtaining positive investment flows should be considered as reflecting the resilience of its investment proposition.

“The fact that, in an environment of caution, financial adjustments, and value chain reconfigurations, we are achieving positive flows speaks to the strength of Costa Rica’s value proposition. However, this does not mean that the competitiveness challenges we have identified are not real,” López said.

Costa Rica’s favorable investment performance through the third quarter of 2025 is especially important because the larger context is one of weak foreign direct investment in Latin America and across the world.

Competitiveness Issues Remain Present

In that regard, and despite being a very competitive country to invest in in the areas of advanced manufacturing and services and the regional benchmark for foreign direct investment in Latin America, López also acknowledged that Costa Rica cannot be complacent.

Competitiveness gaps in areas such as logistics costs, infrastructure bottlenecks, and labor shortages must be addressed for Costa Rica to continue with its economic growth over the long term. In addition, Costa Rica must continue with efforts to streamline procedures and lower the cost of doing business, improve infrastructure, logistics, energy, and communication services, and diversify export sectors.

Attracting and Keeping Existing Investors

Notably, Costa Rica’s investment strategy is not solely about attracting new companies to the country. Instead, it’s also focused on encouraging companies already in Costa Rica to reinvest and expand, according to López. That is, Costa Rica’s “number one challenge will be to continue improving the conditions so that the companies that choose Costa Rica as an investment destination continue to reinvest and expand their businesses in the country, and look at Costa Rica as a reliable partner in the long term,” López said.

Reinvestment is one of the most important goals of investment promotion efforts, as it helps a mature investment destination like Costa Rica, where many multinational corporations are already present and have been present for a long time, achieve growth.

Expansion projects tend to involve high-value activities such as R&D centers, product design, and advanced process engineering, all of which generate higher wages and more spillover into the rest of the economy.

By Investment Regime: Free Trade Zones Dominate FDI

By investment regime, free trade zones (FTZ) continued to be the largest beneficiary of FDI in Costa Rica in 2025, capturing 64.9% of the total during the first nine months of 2025. Costa Rica’s FTZ regime has long been one of the cornerstones of its investment attraction efforts, given that it offers tax incentives, streamlined customs procedures, and a stable legal framework.

Costa Rica’s extensive network of free trade agreements is also very important for the operation of companies in free trade zones, as these agreements offer companies preferential access to some of the most important markets in the world including the United States, the European Union, and Asia, in particular as companies seek to diversify their production locations and reduce geopolitical and supply chain risks.

Definitive regime companies, that is, those located outside of free trade zones, accounted for a still notable 14.5% of total FDI through September 2025. This is a sign of the continued relevance of Costa Rica’s domestic market, which also plays a role as a regional hub for Central America and the Caribbean.

Tourism and Real Estate

Tourism and real estate continued to make up an important share of Costa Rica’s FDI in 2025. Tourism accounted for 8% of total FDI in Costa Rica, while real estate represented 7.8%. These sectors are likely to continue attracting investors due to Costa Rica’s strong international brand and recognition, political stability, and reputation for sustainability and quality of life.

Tourism demand has been primarily driven by projects focused on sustainable tourism and high-end offerings that play to Costa Rica’s environmental credentials and ecotourism model. Real estate investment has been in residential, mixed-use, and logistics real estate in areas connected to export manufacturing and services.

Increasing Number of Countries Investing in Costa Rica

A different dynamic that Procomer also highlights is the diversification of the countries of origin of investments in Costa Rica. In 2025, Costa Rica attracted at least 55 new FDI projects, of which 25 originated from outside the United States, which has historically been the largest source of foreign investment in Costa Rica.

Projects also originated from countries like Mexico, the Netherlands, and Spain, among others, which is a sign that Costa Rica is finding more appeal from Europe and other Latin American investors. Diversification like this helps Costa Rica to avoid becoming too dependent on any single source of investment and makes the country more resilient to economic shocks from outside.