Costa Rica is located in Central America. It occupies an area in excess of 31,000 square miles and is the most prosperous and stable country in the region. There are many reasons to invest in Costa Rica.
What is the GDP of Costa Rica?
In 2018 the Costa Rican Gross Domestic Product (GDP) was US S60.1 billion.
How many free trade agreements does Costa Rica have in place?
Costa Rica is a signatory to thirteen trade agreements that cover 80% of the nation's international trade.
How much of the Costa Rican GDP is comprised of manufacturing?
The Costa Rican manufacturing sector is composed of 40% manufacturing.
For how long does Costa Rica grant income tax exemption for companies that locate in the country's free zones?
Companies that locate in Costa Rica's free zones are 100% exempt from income tax for ten years, and 50% exempt for the following four years.
According to the World Bank, Costa Rica is a success story in terms of its development. It is classified as a high-middle-income country that has experienced sustained economic growth for the past twenty-five years. It’s Gross Domestic Product (GDP) growth in 2018 was a respectable 2.7%, while its per capita GDP stood at US $11,630.67. It is noteworthy to mention that over the last several years, Costa Rica has managed to reduce its total poverty rate from 22.3% to 20.5%. Companies that invest in Costa Rica benefit from its economic stability.
In addition to the aforementioned, in recent years, the dollar’s interest and exchange rates have remained stable, as well. This has built confidence in consumers and debtors, as well as in individuals and companies that have come to invest in Costa Rica.
Because of an influx of foreign capital, the country has managed to diversify its export base and change the structure of goods and services that it sells to its overseas trading partners. In recent years, medical devices have become Costa Rica’s largest exported items. Also, very important is the fact that the country now has free trade agreements in place that govern its commercial relations with 49 separate nations. As a result, 87% of Costa Rican exports go to countries with which it has a free trade relationship.
Many International Companies Have Decided to Invest in Costa Rica
Major companies such as Sony, Proctor and Gamble, Baxter, St. Jude Medical, Coca Cola, Hewlett Packard, Amazon, Dole, IBM, Sikes, Western Union, and others have already invested in Costa Rica.
According to officials from the Costa Rican Chamber of Commerce, in addition to manufacturing, services comprise a significant portion of the national economy. Today this sector represents approximately 40% of Costa Rica’s Gross Domestic Product (GDP).
In addition to manufacturing and services, tourism has also experienced significant growth in recent years. To accommodate a growing number of visitors, twenty-two airlines fly into Santa Maria International Airport on a daily basis. They provide direct connections with scheduled flights to thirty-six international destinations. Additionally, Daniel Oduber Quiros International Airport in the city of Liberia, Costa Rica has flights to seventeen destinations world-wide.
There are a Multitude of Reasons to Invest in Costa Rica
Costa Rica is among Latin America’s most preferred destinations for foreign direct investments. Among the reasons that are that the country provides:
- An excellent business climate based on a recognized tradition of democracy and economic and political stability;
- A young, talented and highly bilingual workforce;
- A network of free trade agreements that covers eighty-seven percent of Costa Rica’s exported goods;
- A preferential trade platform that provides access to one-third of the world’s population and two-thirds of global GDP;
- A strong infrastructure: More than 90% of the country’s energy production comes from renewable resources;
- An enviable quality of life in one of Latin America’s safest countries;
- A business community that includes the presence of 200 multinational companies;
- A fiscal regime that does not impose limitations on the transfer of funds associated with an investment, as well as a lack of restrictions on reinvestment or repatriation of profits, royalties, or capital;
- An environment that respects and protects intellectual property rights;
- A network of Costa Rican Free Zones that provide tax exemptions for:
- Imported raw materials, capital goods, parts and components, materials for packing, containers, and any material or product that is required for a company to operate in a free zone;
- Imported machinery, equipment, their accessories, and parts, as well as company vehicles;
- Imported oils, lubricants, and gas that is required for a company to operate;
- Imported products for commercial or industrial samples.
Additionally, companies that decide to invest in Costa Rica will receive 100% local tax exemptions on:
- Company capital and/or net assets;
- Property taxes for ten years starting on the date the company
begins to operate in the country;
- Local sales and consumer taxes (goods and services);
- Utility taxes;
- Overseas remittances.
Companies investing in Costa Rica are also exempt from:
- Income taxes for a period of eight years in a metropolitan area, and a 50% exemption for an additional four years;
- Income tax for twelve years in free zones located outside the country’s metropolitan areas, and a 50% exemption for an additional six years.
Those parties that are considering an option to invest in Costa Rica, are invited to contact the experts at the Central American Group by submitting the contact form that is included below:
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