Costa Rica, celebrated for its biodiverse rainforests, distinctive sandy beaches, and reputation as a year-round surfing destination, is also a vibrant center for global manufacturing, life sciences, and technology enterprises. The nation is renowned for its renewable energy inventions and is currently drawing billions of dollars in foreign investment, with these industries expanding at an unprecedented rate.
Costa Rica: A Strategic Center for Global Expansion
Costa Rica, characterized by a stable economy and democracy, a highly educated workforce, and an average of 98% of its electricity derived from renewable sources such as hydropower, wind, geothermal, and solar energy over the past five years, has emerged as a favored location for foreign investors seeking proximity to the United States.
Although more than 70 percent of Costa Rica’s direct investment originates from the United States, investors from other regions, such as Europe, are also migrating to Costa Rica.
Laura López, CEO of the Trade & Investment Promotion Agency of Costa Rica (PROCOMER), states, “Costa Rica has made substantial decisions over the years, including a commitment to sustainability several decades ago.”López asserts that this has been a pivotal factor in the nation’s capacity to draw foreign investors.
Over the past year, Costa Rica has witnessed the initiation of 59 multinational projects in the industrial and technology sectors, among others, propelled by foreign investment. According to López, the nation’s foreign direct investment (FDI) experienced an unprecedented surge of 24% in 2023, encompassing medical devices, services, and silicon chips.
Sustainability constitutes a competitive advantage for Costa Rica, as demonstrated in tourism, exports, and foreign direct investment. Adriana Acosta, Director of the country brand crucial COSTA RICA, states that it is becoming increasingly prevalent for enterprises to adopt sustainable practices in their site selection.
Acosta stated that the majority of advanced manufacturing and semiconductor firms greatly appreciate Costa Rica’s reliance on renewable energy for its electricity grid. These companies frequently establish short-term and medium-term sustainability objectives for their operations, rendering the capacity to connect to a green electric grid a considerable incentive for achieving their aims.
PROCOMER, the Foreign Trade and Investment Promotion Agency of Costa Rica, functions as a comprehensive resource for foreign direct investors exploring the various growth potential in Costa Rica.PROCOMER provides comprehensive tools and assistance for investment, export-focused enterprises, and those seeking new prospects.
López states, “For PROCOMER, prioritizing employment generation and economic development across all regions of the country is essential.” López asserts, “A year ago, we initiated a novel foreign direct investment strategy designed to enhance linkages, employment, and knowledge transfer nationwide.” “To accomplish this, we concentrate on drawing investment in established sectors, such as life sciences and services, while amplifying efforts to engage emerging sectors, including agrifood, the film industry, and semiconductors.” López stated, “The diversification of sectors is essential for attaining the development we desire.”
This proactive strategy for attracting investors and facilitating corporate growth has garnered the country’s trust. New firms or investors migrating to Costa Rica will integrate into a comprehensive network of flourishing enterprises. Essential Costa Rica reports that the nation is home to over 450 multinational corporations and several global leaders, such as Intel, Boston Scientific, Equifax, Johnson & Johnson, and Hewlett Packard Enterprise.
A Supportive Ecosystem for Foreign Investors
The Central American nation of 5.2 million, sometimes dubbed the “Silicon Valley” of its region, has drawn numerous prominent multinationals and digital nomads.
Alongside sustainability, our value package encompasses other essential pillars: specialized human expertise that enables enterprises to function and expand in Costa Rica, and the free zone regime, which guarantees a solid legal framework and offers incentives for investment. Mónica Umaña, General Manager of Foreign Investment at PROCOMER, states that those factors, together with other elements of our value proposition, have facilitated the positioning of our country and fostered an optimal business environment for enterprises to prosper.
The country features a system of incentives aimed at attracting and expanding foreign direct investment via its Free Trade Zones (FTZs) program.
Free Trade Zones (FTZs) in Costa Rica, which include manufacturing and service parks and enterprises, enable multinationals to function with tax and customs advantages aimed at fostering foreign direct investment and export-oriented operations. Enterprises in Free Trade Zones benefit from exemptions on import and export tariffs, reduced income taxes, and favorable customs procedures.
Costa Rica and the United States: Addressing Manufacturers’ Microchip Challenges
The worldwide microprocessor shortage affects nearly all facets of manufacturing and technology across several industries. Recent strategic partnerships, including Costa Rica’s designation as a principal ally of the United States under the CHIPS and Science Act enacted by the U.S. Congress, have rendered Costa Rica appealing to multinational corporations aiming to produce high-demand microchips and the medical devices reliant on them.
In July 2023, the United States declared a collaboration with Costa Rica to investigate and enhance potential for the development of the global semiconductor ecosystem and to establish a more robust and secure global semiconductor value chain. The CHIPS and Science Act allocated around $53 billion in financing for this objective. Costa Rica can now utilize the International Technology Security and Innovation (ITSI) Fund to bolster and advance its semiconductor industry and solve infrastructure requirements.
Last year, Intel declared a $1.2 billion investment in its domestic operations by 2025, following prior expenditures nearing $1 billion. Intel now employs 3,300 individuals in the country.
Innovation: Sustainability and Capital Allocation
Costa Rica is cultivating a resilient investment ecosystem bolstered by its renewable energy infrastructure to promote company expansion. Acosta says that this dedication to innovation is a substantial attraction for enterprises seeking novel methods to execute decarbonization initiatives. In 2019, the nation received the Champions of the Earth award from the United Nations Environment Programme for its initiatives in promoting decarbonization.
López states that this holistic strategy for efficiency renders Costa Rica an appealing locale for enterprises seeking to implement novel energy efficiency measures, all while enjoying the advantages of a stable nation with robust renewable energy practices.
López asserts that several of the country’s top multinationals, along with entrepreneurs and immigrants to Costa Rica, depend on PROCOMER’s assistance for expansion. The agency provides long-term support, including the facilitation of strategic alliances and direct consulting services, as the country attracts investment from established corporations operating locally and abroad.
