The Advantages of Investing in Costa Rica, Latest OECD Member
• Costa Rica became the organization’s member number 38 and the fourth in Latin America, last May 15th.
• Joining the organization is a clear acknowledgment that Costa Rica meets the most demanding world standards including those related to foreign direct investment.
“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” Aristotle’s words are an example of a beacon that Costa Rica has followed for a long time: work in pursuit of excellence. A sample of that was a major milestone in the history of Costa Rica’s foreign direct investment (FDI) when INTEL set up its operations in the country in 1996. This opened a broad successful path reflected today on the presence of more than 320 multinational companies in Costa Rica.
This event joins another milestone that Costa Rica proposed more than eight years ago: be part of a group with the highest standards, the
Organization for Economic Co-operation and Development
(OECD). The process itself took over five years and the approval occurred on Friday, May 15, 2020.
FDI is a winner in this process. Belonging to the OECD is a clear acknowledgment that the country meets the most demanding world standards and demonstrates to domestic and international investors that its policies follow the best practices in areas such as corporate governance, investment, competition, financial markets, and public administration.
As a member of the OECD, Costa Rica reinforces its FDI seal of quality based on four main reasons:
1. Ongoing evaluation: Costa Rica’s economic data is monitored by the OECD, which provides trustworthy, comparable statistics for setting objectives and progressing.
2. Development reports: Costa Rica will have specific reports on hand that can be requested to the OCDE, which is also a forum for discussion and analysis of different issues.
3. Impartial advice: The country will have evidence-based advice from the OECD.
4. Greater trust: Meeting public policy standards as a member of the OECD, reinforces a greater trust from external investors.
The OECD declaration about international investment and multinational companies provides an open, transparent setting for international investment and feeds the positive input that multinational companies are able to achieve progress economically and socially. The 47 adherents to the declaration represent 82% of the outgoing global FDI flow: 62% of the incoming foreign direct investment flow: 73% of the entering stock and 87% of the outgoing stock.
Furthermore, as part of the evaluation process for joining the OECD, Costa Rica had a series of intermittent reforms introduced to the free trade zone program. Therefore, the fact that this incentive system for FDI meets the international criteria and standards applicable to international transparency and taxation was ratified.
“The OECD’s invitation to Costa Rica reinforces the country’s free zone regime firmness for investing in the country. Its internationally acknowledged seal of excellence continues to be outstanding so any investor may be sure that, by investing in Costa Rica, the incentives provided under the standards are 100% in line with the highest international requirements and good practices,” explained Jorge Sequeira, Managing Director of CINDE.
He added: “CINDE celebrates that Costa Rica is OECD’s 38th member. This reinforces the country's guiding star as a destination-oriented toward human talent, innovation, and sustainability.”
Joining the OECD also included a series of internal reforms that leveled the playing field based on the organization’s standards. The approved changes include opening more investment possibilities such as: setting up branches to operate under the same conditions as the banks that were already established in the country. Also, major steps were taken continuously to facilitate the establishment of companies, as well as on the regulatory improvement and to ensure that the Free Trade Zone regime meets all of the regulations requested by the OECD without breaching any restriction.
Lastly, and to endow the country even more as it relates to investment, CINDE, along with the Ministry of Foreign Trade and the Export Promotion Agency of Costa Rica, are honing their new strategy for promoting the attraction of investors based on what we call the triple propeller: people, planet, and prosperity surrounded by a world scene where companies will bet even more on strategies involving reshoring and nearshoring, which provides Costa Rica, even more, a proven advantage over its competitors by complying with the international OECD standards.