Reasons to Invest in Costa Rica

 A recent study by the Miami Herald rated Costa Rica the 27th safest country for investment of 140 countries surveyed. If you are not impressed by Costa Rica’s ranking, consider that the United States was ranked only 22nd. Another recent study found Costa Rica to be the least corrupt country in Latin America.

  In addition, U.S. business magazine Fortune ranked San José Latin America’s fifth best city in which to do business and placed it within the 25 best cities in the world. According to the report, Fortune considered the city’s ability to create opportunity for its residents, its business climate and how well it can satisfy the business needs of companies that invest here. San José ranked tops in the quality of its labor force, its business environment and the lifestyle it offers resident executives and investors.

 Let us review a few of the reasons why Costa Rica has such magnetism for qualified foreign investors. First, and perhaps most important, is the enduring political stability. In fact, The World Bank recently selected Costa Rica as the most stable country in Latin America. As you already know, Costa Rica has had a strong, democratic government without interruption since the 1940s and an excellent centralized banking system. The trend towards an open economy and possible trade pacts with such nations as the United States and Mexico are conducive to investment in Costa Rica. Privatization of many state-run institutions will undoubtedly help economic growth in the future. There are also no government expropriations or interference, unlike in many Latin American countries.  

 Costa Rica is easily accessible from all parts of the world by land, sea or air. Outstanding phone and Internet systems link Costa Rica internationally to other parts of the world. Also, let’s remember that investors in Costa Rica have equal rights and laws to protect them. Regulations for conducting business in Costa Rica are the same for both local and foreign corporations. Both can fully own and control local corporations, as well as real estate without any access limitations or restrictions. Many opportunities await foreigners who start new businesses previously nonexistent in Costa Rica. In addition, the cost of labor is low.

 Additional reasons for investing in Costa Rica are: asset protection (creditors, judgments, liens, bankruptcy and divorce), privacy from individuals and governments and fewer taxes (income tax, inheritance tax, estate taxes and probate fees).

 Presently Costa Rica boasts one of the five hottest real estate markets in the world. The boom is expected to continue given all the country has to offer investors, its natural beauty, growing popularity and the coming of age of the Baby Boomers.

  Many attractive incentives are available to foreigners investing in Costa Rica. Investments of $50,000 or more in an approved project qualify the investor for legal residency. However, it is not necessary to become a resident to own or manage a business. Anyone who owns a business can import some items used to operate it and get a tax break on some of the usual duties. Contact the incentive section of the Costa Rican Tourism Institute (ICT) for more information about incentive programs.

 Tourism is now the leading industry in Costa Rica. Numerous opportunities exist in this field. However, sometimes there can be a lot of red tape and competition. Small hotels and bread-and-breakfasts were good investments a few years ago, but there may be a surplus of them now. We have a good friend who refurbished an old building and turned it into a small hotel in 1990. He has done very well only because he has been in the country for a while, knows all the ropes, and was a pioneer in the field.

 Foreigners can invest with Costa Rica’s nationalized banking system or private banks. Interest rates are higher than in the United States and there are many attractive savings accounts and time deposit programs from which to choose. There are some degrees of bank secrecy, liberal money transfer regulations, and favorable tax laws for foreigners.