Free Trade Zones Attracted 64.3% of Foreign Direct Investment in Costa Rica in 2024

Costa Rica continues to consolidate its position as a premier investment destination in Latin America, thanks mainly to the performance of its Free Trade Zone (FTZ) regime. In 2024, this model attracted 64.3% of the total foreign direct investment in Costa Rica, a clear indicator of its pivotal role in the country’s economic growth.

Free Trade Zones: A Proven Catalyst for Growth

According to the latest data from PROCOMER and the Central Bank of Costa Rica, the FTZ regime brought in an additional $531.6 million in FDI compared to the previous year. This robust increase solidifies the free trade zones as the principal engine behind the nation’s economic expansion. The regime’s comprehensive framework—characterized by tax incentives, streamlined regulatory processes, and support services—has made it highly attractive for multinational companies.

The success of the FTZ model is evident not only in the sheer volume of investment it attracts but also in the transformative impact it has on the country’s productive landscape. It enables companies to enter and expand in Costa Rica while contributing significantly to job creation, innovation, and export growth.

Medical Devices Lead the Charge

Among the sectors thriving under the FTZ regime, medical devices stand out. In 2024, this sector experienced a 14% year-over-year growth, translating to $1.091 billion in exports. Now accounting for 44% of Costa Rica’s total exports, the medical devices industry has become a strategic pillar of the national economy.

Costa Rica has become a global hub for advanced manufacturing, especially for Class II and III medical devices. Due to its political stability, high-quality talent pool, and well-developed infrastructure, global giants have established operations in the country. This sector’s success underlines the FTZ regime’s effectiveness in channeling foreign direct investment in Costa Rica in 2024 toward high-value, knowledge-intensive industries.

A Surge in Investment Projects

The favorable investment climate in Costa Rica is further evidenced by the record number of new foreign investment projects initiated in 2024. The country welcomed 61 new investment projects and 100 reinvestments from 23 countries, illustrating international interest and investor confidence in maintaining and expanding existing operations.

These projects span a variety of industries, including advanced manufacturing, knowledge-intensive services, logistics, and digital technologies. They have also contributed to employment growth and the development of specialized skills among the Costa Rican workforce, enhancing the country’s global competitiveness.

Rural Development: Investment Beyond the GAM

One of the most encouraging developments in foreign direct investment in Costa Rica in 2024 has been the expansion of FTZ activity beyond the traditional boundaries of the Greater Metropolitan Area (GAM). Historically, investment has been concentrated in urban regions, but this trend is shifting.

In 2023, areas outside the GAM reported a net negative investment of $38.2 million. In stark contrast, 2024 saw a turnaround, with these regions receiving $240 million in FDI. This change enabled establishing 16 new projects in rural areas, generating much-needed employment and stimulating local economies.

The decentralization of investment plays a critical role in ensuring equitable development across the country. It provides new opportunities for regions lacking the infrastructure or visibility to attract international businesses. This shift also aligns with national development goals aimed at reducing regional disparities.

Empowering Talent and Strategic Sectors

According to Ronald Lachner, president of the Costa Rican Free Trade Zone Companies Association (AZOFRAS), free trade zones have done much more than attract foreign capital. “Thanks to a highly competitive model, free trade zones enable significant investments and drive strategic sectors such as Advanced Manufacturing, Medical Devices, Knowledge-Intensive Services, and Logistics,” Lachner explained.

This model has also nurtured local talent. Companies operating within FTZs often require highly skilled professionals, prompting more significant investment in education and training. These efforts have created thousands of high-value jobs that significantly improve the quality of life for Costa Ricans.

Moreover, clustering firms within the same sector fosters innovation, knowledge transfer, and collaboration—key ingredients for sustained economic development. The role of free trade zones in strengthening strategic sectors underscores their value as an investment tool and a long-term development strategy.

Building Trust with Global Investors

Costa Rica’s ability to attract and retain foreign investors is rooted in its stable political climate, strong rule of law, and commitment to environmental sustainability. These qualities are crucial in a global environment where investors seek secure, responsible, and forward-thinking partners.

In 2024, the country’s performance in attracting foreign direct investment in Costa Rica again validated its reputation as a trustworthy destination for multinational companies. The volume and diversity of new and reinvested projects demonstrate strong satisfaction with the country’s investment climate.

Outlook for the Future

The outlook for Costa Rica remains promising. The country is well-positioned to sustain the momentum of foreign direct investment in Costa Rica in 2024 and beyond by continuing to invest in infrastructure, human capital, and innovation ecosystems. The government’s efforts to diversify the reach of FTZs and ensure broader regional development will likely yield long-term socioeconomic benefits.

As the global economy faces uncertainty, Costa Rica offers a stable and strategic location for companies seeking to expand in Latin America. The success of the FTZ regime in attracting foreign investment, developing local talent, and driving export-led growth stands as a model for others in the region.