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Foreign direct investment in Costa Rica has grown considerably during the past 20 years. Costa Rica, due to its nearshore facilities to the US has become a good alternative using lower cost labor for manufacturing and other business needs. This has led to the promotion of business incentives in Costa Rica which are designed to attract businesses who would like to invest their capital in Costa Rica
After the economic crisis that affected the majority of Latin American countries, including Costa Rica, the structural policies that were implemented locally in the early 80s accomplished a swift economic recovery. New trade regimes such as the Free Trade Zones were established. These served to attract a new wave of transnational companies. These companies use Costa Rica as an export platform of goods and services and benefit from the business incentives in Costa Rica.
Costa Rica has actively sought promoting exports of its manufactured goods through the creation of special incentive regimes which offer business incentives in Costa Rica. These business incentives in Costa Rica include the establishment of the free trade zone regime and enable companies to benefit when they choose to invest in Costa Rica.
 Business incentives in Costa Rica include Free trade zones, tariff exemptions for raw materials and capital goods, income tax payment, added value, asset, and municipal tax exemptions, and the possibility of selling up to 25% of the product in the local market (50% for service companies).
Currently business incentives in Costa Rica include nine different private free trade zones (AZOFRAS), the majority of which are located near San Jose, as well as to the two important main ports of entry, the Juan Santamaria Airport, the key highways and container terminals. Other benefits such as parks that provide fiber optics that allows high-level broadband and dedicated services for voice, data and video transmission are also offered as business incentives in Costa Rica.
The business incentives in Costa Rica related to the Free Trade Zones as well as Active Finishing Zones are also designed to facilitate the development of relations with suppliers established in Costa Rica.
Business incentives in Costa Rica related to The Free Trade Zone law offer an incentive and benefit package (granted by the Costa Rican government) to those companies that perform new investments in the country and comply with certain requisites. Among these basic requisites are to perform an initial capital investment of at least $150,000, if installation occurs in an industrial park, or $2,000,000 for those companies wishing to install outside the parks (only manufacturing plants).
The area designed for these purposes is called “Free Trade Zone” and is an area without a resident population. This area is authorized by the Government of Costa Rica. The entity responsible for managing this zone is PROCOMER. Procomer receives applications to classify companies for the free trade zone status.
There are business incentives in Costa Rica for companies such as:
- Companies that manufacture, process and assemble goods to be exported or re-exported.
- Companies that only delivery, re-pack or re-distribute non-traditional goods to be exported or re-exported.
- Companies that export services to companies or individuals established abroad or under the Free Trade Zone Scheme.
- Companies that manage parks dedicated to company installation under the Free Trade Zone scheme.
- Research organizations. Companies dedicated to research and technology improvement.
- Companies dedicated to the operation of piers, dry or floating docks to build, and ship repair and service.
If you are seeking business incentives in Costa Rica or if you are considering investing in Costa Rica, Contact Us today.
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