Business Enterprises in Costa Rica

Many around the world are aware of Costa Rica’s importance as an economy primarily dependant on tourism but few have the knowledge that it has the best social indicators in all of Latin America. Life expectancy is impressive, being 76 years for the average male and so are the literacy rate and the infant mortality rate at 95% and 1.3% respectively. The flourishing economy of Costa Rica is suggestive of a low unemployment rate and controlled inflation.

The economic progress of Costa Rica began after the trade liberalization process was initialized in 1985 when customs tariffs was decreased to 11% in general and hit a low of as low as 0% in case of raw materials and 1% on capital goods. All other tariff barriers were eliminated too. These conditions were naturally favorable for Direct Foreign Investment (DFI), which was seen to increase during this time and even later years. A huge leap occurred in this area between 1990 and 1997 when Direct Foreign Investment increased by nearly 200%. The Per Capita Income index records an upward movement and currently statistics prove that in terms of individual income, Costa Rica occupies second place in Latin America as a whole.

Since the investment situation is extremely favorable in Costa Rica, recent Governments have constantly kept up attempts of expanding business opportunities to the greatest extent possible. Legal agendas have changed with the incorporation of the Concession laws that not only ensure security in keeping with legalities but also establish administrative efficiency. Infrastructure is gradually going through a change what with the Juan Santa Maria Airport being considered as the greatest service provider for air cargo needs. Considerable development is also taking place in the telecommunications sector since this is what binds the various industrial areas together.

While the above reasons are predominantly responsible for the growth of high tech companies in Costa Rica, there are others as well. Companies can afford to flock to here because of the Free Zone Laws that offer tax holidays for as long as 12 to 18 years! High tech companies can also benefit from reinvestment incentives if they are able to extend the tax free period from 16 to 20 years. There is also another instrumental reason why companies choose Costa Rica as the site for development and this lies in the labour force being highly educated in general, as a result of which training them is not an issue for employers.

Costa Rica in recent years has seen a massive economic shift taking place as the traditional industries have lost the race to high tech industries. It is basically because of important factors such as an educated labour force, economic incentives and developed infrastructure, that Costa Rica has flourished the most in Latin America. Famous companies that have chosen Costa Rica to expand their business include Intel, Acer America, DCS Communications (ACATEL), BAXTER Healthcare, Panasonic, Hitachi, Siemens and many more.