remains one of the safest and most attractive country for
foreign investment in Latin America.The Costa Rican government,
its ministries and financial institutions maintain a decidedly
pro-U.S. and continental stance in regard to financial security
and tax laws.
Doing Business in Costa Rica
aim is to entice primarily high-tech corporations to take
advantage of Central America's most educated, computer literate
and disciplined workforce, along with the modern production
infrastructure the country is currently creating. The economy
is being transformed from its longtime dependence on coffee,
bananas and cattle raising to one centered on microprocessor
production and high-tech telecommunications services.
climate and government policy of making Costa Rica "the Silicon
Valley of Latin America" has enticed commercial leaders such
as Acer, Microsoft, GE, Abbot Laboratories, Continental Airways
and Intel Corporation to make sizable investments here, both
financially and physically, with major production and distribution
facilities. Western Union has chosen Costa Rica to host its
Latin American regional operations center. In 1998, for the
first time ever, Costa Rica is poised to earn more from high
technology exports than from coffee or bananas or even its lucrative,
thriving tourism industry.
The Costa Rican-American Chamber of Commerce
AmCham is an important resource for anyone
interested in doing business in Costa Rica.
Bank has given Costa Rica an excellent bill of overall political
and economic health. At its annual conference in El Salvador
this year, the bank lauded the country as possessing "one
of the most stable and robust" democracies in Latin America.
It went on to praise the Costa Rica's "healthy economic growth
rate" and "some of the best social indicators" on the continent.
Rica is one of the most vocal supporters of continental free
trade, and already has its own agreement with Mexico and other
countries of the region. Costa Rica's numerous free trade
zones and tax holiday opportunities are extremely enticing.
They offer benefits such as exemption from import duties on
raw materials, capital goods, parts and components; unrestricted
profit repatriation; tax exemption on profits for eight years
and a 50 percent exemption for the following four years.
done recently for the Ministry of Foreign Trade (COMEX) projects
that by the year 2005, Costa Rica's export earnings will amount
to $15.7-billion, about four times the current figure. Intel
will be leading the way; its exports, from the three manufacturing
facilities the processing giant is building here, are expected
to reach an annual $3.5-billion by the year 2001.
companies will spur the export boom, while traditional exports,
such as coffee and bananas, will fall in percentages of overall
figures, but in terms of revenue, will continue to grow.
Rica is building a competitive advantage for itself and the
many high-tech companies who have chosen or are pondering
the option to operate here. It is a country at a turning point
in integrating itself into the modern world economy. Those
doing business here will have the inside track.
way for potential investors to begin their search is to travel
to Costa Rica and find out firsthand about the favorable business
climate and opportunities. There are direct flights to San
José from many cities in the United States and Canada. For
all accommodations and tourism inside the country, there is
no better service than Travel Web, which you can easily contact
by phone at our toll-free number or on-line.
the more knowledgeable and helpful sources of information
on investing and doing business in Costa Rica is the Costa
Rican-American Chamber of Commerce (AMCHAM), composed over
1,500 representatives from more than 330 multinational and
the Costa Rica Investment and Development Board, has been
officially commissioned by the government of Costa Rica to
be the main promoter and advisor to foreign investors. CINDE
is a private, nonprofit organization that provides complete
and updated information on the economy and the business environment
in Costa Rica, and helps in the initial contact with potential
investors. It has an office in New York to provide tailor-made
services. PROCOMER, the Foreign Trade Promotion Institute,
can help exporters understand relevant legislation, acquire
export permits, seize the advantages of market opportunities
and chart their way through related fields of endeavor. CADEXCO,
the Costa Rican Exporters Chamber, provides information to
entrepreneurs, private and public institutions on export procedures
and requirements; trade barriers and how to overcome them;
how to sell products abroad; information on export credit
lines and export contracts, international prices, etc.
Rica's Internet services are the most readily available and
sophisticated in Central America. Informática Internacional,
the country's longest-serving private sector Internet services
company; is one of the leading providers of Internet services
nationwide. Through its diverse client base and wide range
of products and services, Informática has ways to improve
any business, personal communications needs, or assist in
the electronic marketing of products and services. Through
Informática, corporations and individuals planning to settle
in Costa Rica can acquire Internet domains and E-Mail addresses
in the country even before making the actual physical movement.
and private companies, local or foreign, can own land and
property in Costa Rica. Few restrictions apply, the most important
being physical occupancy and a 50-meter limit from the beach
on oceanfront property. Potential real estate investors, and
their lawyers, must first go to the National Registry for
a title search, to the Ministry of the Environment and Energy
for an environmental impact study, the local municipality
for zoning laws and building permits, and then perhaps to
other ministries and institutions for pertinent information.
There are some excellent Real Estate agents who can find you
the property you want. In addition, pick up The Golden Door
to Retirement and Living in Costa Rica. It covers all aspects
of living and investing in the country, and is required reading
for anyone thinking of living full- or part-time here.
government of Miguel Angel Rodríguez has assumed a constitutional
and legislative commitment to deregulation and privatization
through a national consensus process. Instead of simply selling
off state owned companies and institutions to the private
sector, Costa Rica has opted for a phased opening up of areas
such as telecommunications. For example, ICE, the Costa Rica
Institute of Electricity, which today holds a constitutional
monopoly in the field, will not be sold - the various telecommunications
services will be offered as concessions, and ICE will become
just another player in this modern, competitive branch.
information on the privatization of Costa Rica, read the Latin
America Weekly Report article entitled Costa Rica Moves
More Slowly, Seeking Consensus
Starting Business in Costa Rica
doing business in a foreign country can be daunting--Costa
Rica is no exception. Like many small countries, the business
environment in Costa Rica is controlled by a few entrenched
interests. However, the opening of the global marketplace
has put pressure on those entrenched interests to yield to
outside investment and investors. Costa Rica, a peaceful democracy
for decades, has a history of actually inviting foreign investment.
An example of this is that it is relatively simple to begin
a business in Costa Rica. What one does after a business is
begun is an entirely different matter.
Rica is an enchanting place to live. Of course, there are
some internal problems, but there are problems everywhere.
Costa Rica is centrally located between two of the largest
consumer markets in the world and, with all the neat, new
technology, business can be done from here as easily as from
Peoria, Illinois or Patagonia, Argentina! Costa Rica's government
is as stable as one could want (in Central America) and the
Costa Rican people are simply "a cut above."
Rican corporate legal system is like the country itself--"user
friendly." Incorporating here is painless and suggested as
the first step to doing any other kind of business. With a
smattering of business sense, a rudimentary grasp of Spanish,
a bit of ready cash, and the desire to become a global power
(!), anyone can be a recognized business entity.
of a business venture in Costa Rica, as in most other jurisdictions,
comes in a variety of packages:
Anónima (S.A.) is probably the most popular. Comparable
to the "Inc." in the United States, the S.A. confers upon the
holder(s) the right (and obligations) to do corporate business
in Costa Rica.
Partnership (Razón Social)
Liability Company (Sociedad de Responsabilidad Limitada)
the process of establishing a business entity is a legal one,
seeking the help of a qualified commercial attorney is a wise
first step for those not familiar with the Costa Rican legal
system. Most commercial sections of embassies or consulates
can recommend a qualified attorney; the Yellow Pages of the
phone book, under "ABOGADOS," is another place to look; recommendations
from those who have gone before can also prove useful. In
any event, almost any attorney with a specialty in Commercial
Law will have the capacity to get you incorporated and on
your way to doing business here in the land of eternal spring.
some Latin American countries, it is not obligatory to have
a native Costa Rican as a partner in the establishment of
any type of business entity. In certain instances, having
a Costa Rican partner is a good idea; however, do not be pressured
into accepting a native partner if you would rather not.
example, to start a Sociedad Anónima (S.A.) at least
two stock holders must be named, and there must be at least
three officers: President, Secretary and Treasurer. One person
can hold various offices. A fiscal should also be named--in
theory, this position is the corporate Comptroller. There
also must be a designated Resident Agent, a person responsible
for Judicial and Administrative notifications which might
arise during the life of the corporation. The Resident Agent
must be a resident of Costa Rica though not necessarily an
a corporate name is important. The name of the corporation
must be in Spanish and unlike any other name already in use.
Before the registration of the corporation, the attorney responsible
for the work should check the registry carefully to determine
the uniqueness of the chosen name. The corporate name will
be the exclusive property of the company. Simultaneously with
the registration of the corporation, a Cédula de Persona
Jurídica will have to be requested. Analogous to a federal
tax number, the Cédula de Persona Jurídica allows the
corporation to operate freely in the market(s) defined in
the corporate charter.
new tax laws just passed by the government, keeping corporate
books up to date has become very important. These books--Minutes
of the Board of Directors’ meetings, Minutes of the Shareholders’
meetings, Registrar of Shareholders, and three accounting
books (Mayor, Inventario, and Diario)--must be kept
up-to-date, accurately reflecting the activities of the corporation.
Under the new tax law, if any tampering with the books is
found, the corporate officers face fines and/or imprisonment.
of incorporation, from beginning to end, runs between $300.00
and $600.00, depending on the attorney. It pays to shop around.
Incorporation in Costa Rica by a foreigner requires that an
amount equal to the total nominal value of the stock available
be deposited in a special colones account with the government.
This deposit is refundable the minute the corporation becomes
takes between two and three months. No corporate business
can take place before the process is complete. Should a person
be in a hurry, some attorneys have new, clean corporations
duly registered and ready to go. Cost for these is about the
same, but there is no choice of names. A bit more overall
caution should be exercised if this route is chosen.
environment in Costa Rica is changing rapidly. New laws impacting
on every aspect of corporate life have recently been passed
and more are on the way. The strictness of these laws reflect
the government’s desire to restructure its house in such a
way as to address the internal needs of the Costa Rican people
as well as those of the visitors this beautiful country attracts.
In a country with the reputation of being somewhat unstructured,
these new laws represent, basically, a new way of life for
of the changes in the business community, Costa Rica is still
an attractive place in and from which to do business. Hopefully,
the new laws will deter some unscrupulous people, whether
nationals or foreigners, from doing business here. Costa Rica
is a beautiful, democratic and peaceful country. If you decide
to do corporate business here, remember that.
Working Your Way Through Paradise
this is paradise, why work? For one thing, not working,
even in paradise, gets old after a while--most of us need
something constructive to do to occupy our time. Work is also
useful in helping one eat, a habit many of us have held onto
since childhood. Even in paradise, one must eat!
to Licenciada Teresita Alfaro Molina, head of the Work Permit
Section in the Labor Ministry, if you come to Costa Rica as
a tourist, you'd better stick to being a tourist--it's against
the law to change your status from tourist to worker without
some pretty convincing convincing! And, it's against the law
(both the law governing immigration and foreigners, and the
labor code) for a tourist to work for pay in Costa Rica.
is exceptionally knowledgeable in the area of foreigners working
in Costa Rica. Before assuming her current post, she worked
for 12 years with the Immigration Department's Labor section,
approving applications from nonresidents for work permits.
She indicated that it is common for nonresidents to spend
a few weeks vacationing here, fall in love with the country
and then wish to stay and work.
unemployment figures for Costa Rica hover around 4.5%, one
of the lowest in Latin America. Even during times of slow
economic growth, Costa Ricans work, and they work hard for
relatively low wages. Neither the government nor local business
want foreigners coming to this beautiful country taking jobs
away from its motivated, well-trained residents.
nonresidents can receive work permits fairly easily, but only
a select few. These include:
figures - to play or coach a particular team in a particular
(includes show-biz types who visit Costa Rica for performances)
of any religion
of ticos(as) in the process of applying for citizenship
workers (for the harvests of certain crops)
(but really only if it’s necessary in their study program,
and then for only four years)
permits are issued for six months, but can be extended for
up to two years.
group of foreigners permitted to work in Costa Rica are the
owners and stockholders in registered Costa Rican companies.
If you own stock in any corporate business in the country,
you may work in any capacity in that enterprise. I’ll have
more about this in my upcoming article on getting your residency
in Costa Rica.
is a clause in the law which gives the Director of Immigration
the right to grant exceptions. This seems to happen on a regular
basis, especially for doctors and nurses who come to Costa
Rica for humanitarian service. Also, exceptions are granted
to some bilingual professors, and specialists in a variety
of areas where no such specialist is available here. These
exceptions, when granted, are time or task limited and nonrenewable.
case of employees of transnational corporations, many are
granted temporary residency (giving them working privileges),
rather than work permits, for a period of two years. In a
limited number of cases, if a business (either Costa Rican
or transnational) is interested in hiring a nonresident, application
can be made to the Immigration Office. According to Licenciada
Alfaro, this is very unusual and almost always rejected.
in Costa Rica, whether national or transnational, can, by
law, have no more than ten percent of their payroll nonresidents.
However, for the agro-industrial sector, this ten percent
does not include immigrant or refugee labor.
Refugees, you ask? Yes, Refugees
American refugees, specifically, have a special status in
Costa Rica. Because of the political and military problems
of many of our Central American neighbors, Costa Rica has
created a refugee status for those fleeing their own country.
This is neither a residential nor nonresidential status so
typical work permit issues do not pertain. After three years
in Costa Rica, a refugee may apply for a work permit. When
granted, this permit is for an unlimited time or until the
refugee is able to return to his or her own country.
a humanitarian gesture, Costa Rica has made allowances for
the Nicaraguan worker. Nicaragua's current unemployment level
is around 60%. With so little work to be found in that country,
many "Nicas" cross the Nicaraguan-Costa Rican border looking
for something they can do to earn a living. Nicaraguans are
allowed to work in Costa Rica under a special program which
gives them a six-month permit to work during specified fruit
and vegetable harvests.
also pointed out that, with the exception of refugees and
the numerous Nicaraguans, all people wishing to work in Costa
Rica under the existing laws should apply for their permits,
or work visas, before entering the country.
you are coming to Costa Rica as a tourist, enjoy yourself.
This really is a wonderful and full- of-wonder country. If
you decide you want to work here, do it right and abide by
the laws. It will make your stay in Paradise even more enjoyable.