Costa Rica: Investing

FDI in Figures

The establishment of Free zones has encouraged FDI influx, making Costa Rica, together with neighboring Panama, the main FDI beneficiary in the isthmus. The US-Central American Free Trade Agreement came into effect in March 2008 and led to a real increase in investments. FDI stock, as a percentage of the GDP, increased from 17% in 2000 to 31.7% in 2006. However, because of the deterioration of the economic situation in investors countries, this influx has petered out and should remain limited in the coming years.

Costa Rica offers tax incentives to investors, has adequate transport infrastructures, better political stability than its neighbors and a skilled labor force. Still, the constant government interference in controlling certain sectors of the economy, in particular services, as well as the complex administrative procedures, are major inconveniences.

The industrial and real estate sectors attract most of the foreign investment. The United States, Canada and Mexico are the main investor countries.

	Costa Rica	Latin America & Caribbean	الولايات المتحدة	Germany
Index of Investor Protection	3.0	5.1	8.3	5.0

Source: Doing Business

Note: The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	2,021	1,347	1,413
FDI Stock (million USD)	10,818.0	12,385.8	13,500.1
Performance Index*, Ranking on 141 Economies	40	39	-
Potential Index**, Ranking on 141 Economies	87	-	-
Number of Greenfield Investments***	19.0	68.0	-
FDI Inwards (in % of GFCF****)	28.1	16.7	-
FDI Stock (in % of GDP)	36.5	41.4	-

Source: UNCTAD - Last Available Data

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

Tax Rates

Sales Tax: 13%
Company Tax: From 10% to 30%
Withholding Taxes: Dividends: 15%, Interests: 15%, Royalties: 25%.
Bilateral Agreement: Costa Rica and Egypt are not bound by a Double Taxation Agreement.
Social Security Contributions Paid By Employers: 26%

Investment Opportunities

Tenders, Projects and Public Procurement: Inter-American Development Bank, Tenders in South America
DgMarket, Tenders Worldwide
Setting Up a Company: Consult Doing Business Website, to know about procedures to start a Business in Costa Rica.
Useful Resources: Costa Rican Investment and Trade Development Board

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