Costa Rica can be a destination where you can find a lot of success. It is now the third-largest economy in Latin America thanks to its good business policies and growth strategy that seeks out foreign investment.
The country lies below the hurricane belt and has a beautiful tropical climate. The nation’s green brand was effectively marketed across the globe. Costa Rica’s political stability also promotes investment. It is Latin America’s longest-running democracy.
Costa Rica has broadened its economy over the past 20 years. It used to depend on agriculture, but now it is proud of its innovative manufacturing and business services industries.
Does Costa Rica Welcome Foreign Investors?
Foreign investors and businesses are welcome in Costa Rica. More than 250 foreign businesses operate in Costa Rica, including big corporations like Sony and Coca-Cola.
When starting a new business, foreign investors comply with the same regulations as domestic investors. You must have a passport and visa in order to operate a business in Costa Rica. Applying for temporary or permanent residency is recommended because tourist visas are only good for 90 days and are usually hard to renew.
Financing at a particular level speeds up permanent residency. For example, a $200,000 investment in business development or property acquisition can help you get your permanent residency. You can find the best business line of credit on FinImpact to help you out with financing your investment.
Also, you must live in Costa Rica for at least six months each year apart from the investment. If you fulfill these two requirements, you will be eligible to submit for permanent residency after three years.
However, launching a business does not grant you working rights in Costa Rica. The nation has laws in place to safeguard its labor. You must employ locals even though you can manage it by yourself.
5 Reasons to Invest in Costa Rica
Are you still doubting whether to invest in Costa Rica? Here are the top five reasons to do so!
#1: Market with Low Risk and Huge Profits
The Costa Rican government’s dedication to advancing the real estate industry has directly contributed to the country’s flourishing market. Although the costs are not as low as they were ten years ago, Costa Rica is still booming.
Investing in a market that is already established, where you can expect to make solid profits, has advantages over taking a chance on a market that is developing in an unpredictable manner.
And even though there is an ongoing disagreement over the worldwide market recovery, Costa Rica’s real estate market will likely succeed in the coming decades.
#2: Excellent Business Environment
Costa Rica is strategically located in Central America and presents investment opportunities for businesses looking to broaden their horizons and establish in a country with strong democratic institutions and continuous efforts to achieve fair and sustainable development.
The strong and extensive economic and political ties between Costa Rica and its trading partners support the growth of key sectors like education, culture, security, and multilingualism.
#3: Incredibly Low Taxes
Investment opportunities are even more tempting in Costa Rica because there is no capital gains tax and a 25% annual property tax.
Additionally, only income earned in Costa Rica is liable to income tax, and a sizable portion of this is considered deductible.
#4: Solid Infrastructure
Costa Rica has a large road network, two significant international airports, and three maritime terminals. The Juan Santamaria airport lies 5 kilometers from San Jose, the nation’s capital. It is ranked as the fourth-best airport in Latin America and the Caribbean.
Additionally, the nation has seven customs offices for foreign trade: at the borders with Nicaragua and Panama (Paso Canoas and Peas Blancas, respectively), the Atlantic and Pacific ports (Limón and Caldera), the Juan Santamaria International Airport, and the remaining two (Central and Anexión) located throughout the nation.
#5: Most of the Exports are Covered by Free Trade Agreements
The free trade agreements cover 87% of the exports. The nation also provides a variety of benefits and incentives to investors.
The current Free Trade Zones regime provides businesses with a full spectrum of incentives available in the nation, including incentives without time limit (100 percent exemption from import/export tariffs, general sales tax, withholding of royalties, benefits and dividends, interest tax, and stamps), several exemptions from income tax and some incentives with a time limit (exemption to property tax).
The Best Business Investments for Foreigners in Costa Rica
The following are expanding industries in Costa Rica that might be the most suitable for your investment.
- Manufacturing – This sector includes products related to the life sciences, such as pharmaceuticals, biotechnology, and medical equipment. In addition to light and complex manufacturing, this industry also involves food and agricultural technology.
- Health and Wellness – This category includes sustainable tourism, personal care, and nutraceuticals.
- Knowledge-Intensive Services – This sector covers software development and IT services. Also, it includes creative fields like engineering and design, animation and gaming, and digital marketing. Lastly, this sector covers corporate and business processes like consulting, supply chain, and technical support.
- Real Estate – Costa Rica is a popular retirement place due to its beautiful landscapes and affordable healthcare. Additionally, the booming tourist sector aids investors who own holiday homes in making rental money.
The Bottom Line
Despite being smaller than 75% of the US in terms of geography, Costa Rica has a higher biodiversity than the majority of the Americas. Additionally, it has a sound economic and banking system that has simply been strengthened over time by both domestic and foreign direct investment.
Investing in Costa Rica is undoubtedly a unique opportunity, but there are risks involved, so it’s crucial to do your research before moving forward.
