The Free Trade Zones in Costa Rica Contributed Over $12 Billion to the Economy in 2023

The Economic Impact of Free Trade Zones in Costa Rica

The study reveals that the $12.276 billion in production generated by businesses operating within Costa Rica’s free trade zones includes $5.621 billion in local purchases. This represents a 24% increase compared to 2022, illustrating how these zones contribute to export-driven growth and support domestic suppliers and services.

Manuel Tovar, Costa Rica’s Minister of Foreign Trade, emphasized in a statement that the free trade zones in Costa Rica “impact many sectors of our economy, not only by generating investment and quality employment but also by acting as a catalyst for local business opportunities and being an active contributor to the country’s well-being.”

The study also highlights Costa Rica’s excellent return on investment from its free trade zones. For every dollar that the country exempts from taxes for companies operating within these zones, Costa Rica receives $2.80 in return, leading to a net benefit of $1.80 for every dollar invested. This exceptional return reinforces the value of maintaining and expanding the free trade zone model in Costa Rica.

Job Creation and Workforce Development in Free Trade Zones

Another noteworthy aspect of the study is the substantial number of jobs created in Costa Rica’s free trade zones. Employment within these zones has grown at an average rate of 9% annually. By 2023, the zones provided direct employment to 186,658 people and indirect employment to 64,871 individuals. These numbers demonstrate these zones’ direct impact on job creation in the country, significantly enhancing the national labor market.

Minister Tovar added, “The sustained growth in local purchases, wages, and fiscal contributions shows how the free trade zones in Costa Rica are boosting international competitiveness while strengthening the economic and social fabric of Costa Rica.” This continuous growth also highlights the significant role of free trade zones in improving the country’s overall economic resilience.

Foreign Investment and the Role of Free Trade Zones

Regarding foreign investment, the businesses in Costa Rica’s free trade zones were responsible for $1.542 billion of the $3.788 billion in total foreign direct investment (FDI) that entered the country in 2023. This means nearly 40% of all foreign investment in Costa Rica was channeled into businesses operating within these zones.

The figures also demonstrate how Costa Rica’s free trade zones are a significant attraction for multinational companies seeking to establish a presence in Latin America. In 2023, 567 companies operated across 68 different free trade zones in the country. Of these companies, 65.8% are in the services sector, 25.6% in the industrial sector, and 8.6% in the agroindustry.

A Thriving Export Hub: Free Trade Zones as Key Export Drivers

The study also illuminates the vital role that free trade zones play in Costa Rica’s export economy. In 2023, 64% of Costa Rica’s total exports of goods were shipped by companies located within these zones. This emphasizes how free trade zones are vital for domestic economic growth and positioning Costa Rica as a critical player in global markets.

Furthermore, it is noteworthy that 59% of the businesses operating in Costa Rica’s free trade zones are foreign-owned, reinforcing the country’s attractiveness as a hub for international companies looking to access regional and global markets.

The Benefits of Free Trade Zones Beyond Economics

Apart from the economic benefits, the free trade zones in Costa Rica also contribute significantly to the development of specialized human capital. These zones serve as a platform for creating high-quality jobs and developing skilled workers, particularly in high-tech industries, manufacturing, and services.

Laura López, the General Manager of Procomer, emphasized that the free trade zones in Costa Rica are competitive advantages. She noted, “It fosters the development of specialized human talent and actively promotes the inclusion of thousands of women in the workforce. Moreover, these companies contribute to economic well-being by offering salaries 1.8 times higher than the national private sector average.”

This focus on skill development and gender inclusion is critical to building a sustainable and equitable economic future for Costa Rica. It ensures that the benefits of free trade zones are shared among the country’s population.

The Free Trade Zones in Costa Rica and Their Long-Term Potential

Looking ahead, the future of the free trade zones in Costa Rica seems promising. The continued growth in production, investment, and employment suggests that the country’s strategy of promoting and expanding these zones effectively drives economic development. The government’s ongoing commitment to improving the regulatory framework and incentivizing businesses will likely continue attracting local and foreign investment.

As Costa Rica is a regional leader in manufacturing, services, and high-tech industries, free trade zones will remain a crucial pillar of its economic strategy. The government’s efforts to expand these zones and integrate them more fully into the global Economy will ensure that Costa Rica stays competitive on the world stage.

Conclusion: Free Trade Zones as a Pillar of Costa Rica’s Economic Success

In conclusion, the free trade zones in Costa Rica have proven to be a vital component of the country’s economic model. They generate billions in production, attract significant foreign investment, and create thousands of high-quality jobs for Costa Ricans. Furthermore, these zones contribute to the development of specialized talent, promote gender inclusion, and strengthen the nation’s overall competitiveness. With continued support and investment, free trade zones will remain a key driver of growth and prosperity in Costa Rica for years to come.