Doing business in Costa Rica: Costa Rica trade and export guide
Updated 11 March 2015
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This publication is available at https://www.gov.uk/government/publications/exporting-to-costa-rica/doing-business-in-costa-rica-costa-rica-trade-and-export-guide
Brexit
Learn about changes for UK exporters to Costa Rica if the UK leaves the EU without a deal.
Managing risk
Find out how UK companies can control risks when doing business in Costa Rica.
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1. Costa Rica export overview
Costa Rica is one of the most stable countries in Latin America. It has an open economy focused on industrial production, services, tourism and agriculture. Costa Rica has a population of just under 5 million.
Contact a Department for International Trade (DIT) Costa Rica export adviser for a free consultation if you are interested in exporting to Costa Rica.
Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies. You can also check the current UKEF cover position for Costa Rica.
Foreign Direct Investment (FDI) is an important part of the market’s economy. In 2014, it received around £1.4 billion in FDI. It is the second highest recipient of FDI in Latin America per capita.
Many top UK businesses are established in Costa Rica, including: AstraZeneca, Land Rover, VITEC Group, BAT and Glaxosmithkline.
Strengths of the market include:
- open and well-diversified economy
- English widely spoken
- Gross Domestic Product (GDP) growth since 1991
- highly educated and efficient workforce, with a high literacy rate
- politically stable, with more than 120 years of solid democracy
- safest country in Latin America according to the 2014 Latin America security index
- international standards for Intellectual Property (IP) protection
- an excellent location for business at the heart of the Americas
2. Challenges doing business in Costa Rica
There are some unique challenges for doing business in Costa Rica. These include:
- bureaucracy
- corruption and lack of transparency
- slow judiciary system and decision-making processes
- delays in customs
- long standing fiscal deficit
- some language barriers
- unemployment is one of the highest in the region, at 7.9%
- poor infrastructure
You should ensure you take the necessary steps to comply with the requirements of the UK Bribery Act.
3. Growth potential
The absolute GDP in Costa Rica is £32.2 billion and GDP per capita is approximately £6,612. It has a growth rate of 3.5% and Inflation is at 5.13%, making it one of the most developed economies in Latin America. It is the most stable economy in Central America.
Trade liberalisation has boosted productivity growth, economic diversification and investment. It offers investors excellent conditions and incentives as part of its ‘export and investment promotion strategy’.
Costa Rica is investing over £650 million for major improvements to seaports, airports and highways.
Costa Rica’s main industrial products are:
- microprocessors and electronic components
- medical equipment
- food and coffee
3.1 Free Trade Agreements (FTA)
Costa Rica has agreements with the European Union (EU).
It also has agreements with the rest of Central America and Caribbean countries. Wider afield it has agreements with the United States, Canada, Mexico, China and Singapore.
Costa Rica is in the process of becoming a member of the Organisation for Economic Cooperation and Development (OECD) and the Pacific Alliance.
4. UK and Costa Rica trade
Trade between the UK and Costa Rica has increased in the last few years. Exports of goods from the UK products reached £63 million.
The top exports from the UK are:
- pharmaceuticals
- chemicals
- vehicles and spare parts
- whisky
- machinery
- petroleum products
5. Opportunities for UK businesses in Costa Rica
Department for International Trade (DIT) provides free international export sales leads from its worldwide network. Search for export opportunities.
5.1 Services
There are many opportunities for UK companies in the services sector, including:
- contact centres
- shared and back office services
- digital technologies
- design and engineering
- regional hubs
Contact the Department for International Trade (DIT) team in Costa Rica for more information about the opportunities available in the services sector
5.2 Advanced manufacturing
There are many opportunities for UK companies, including provision of:
- electronics
- automotive and aerospace components
Contact the Department for International Trade (DIT) team in Costa Rica for more information about the opportunities available in the advanced manufacturing sector
5.3 Life sciences
Opportunities for UK companies include:
- medical devices
- biotechnology development
Contact the Department for International Trade (DIT) team in Costa Rica for more information about the opportunities available in the life sciences sector
5.4 Clean technologies
Costa Rica aims to be carbon neutral by 2021, which brings opportunities for green technologies. UK companies can help with development and production of components within the supply chain.
Contact the Department for International Trade (DIT) team in Costa Rica for more information about the opportunities available in the clean technologies sector
6. Start-up considerations
When doing business in Costa Rica, companies need to be patient and flexible. It is recommended to monitor opportunities thoroughly beforehand and be willing to engage with government’s long-term ventures.
Appointing a local representative works well as an initial point of entry into market. Agents will understand local bureaucracy and idiosyncrasies. It is also recommended to have a legal advisor.
Prior to initiating new commercial projects or activities, many companies must go through an environmental impact evaluation process at the National Technical Environmental Agency (SETENA).
The Department for International Trade (DIT) team in Costa Rica can help with market research and contacts.
7. Legal considerations
Contact the Department for International Trade (DIT) team in Costa Rica to help find tax and legal advisers before entering into agreements.
In Costa Rica, you have equal rights and obligations to natives. There are no limits to property handling and you can conduct business activities freely. There is free capital movement without foreign exchange controls.
Multinational companies must comply with the same procedures and regulations as local companies. The typical routes to market include:
- general partnership
- partnership
- Limited Liability Company
- corporation
The ‘Costa Rican Code of Commerce’ regulates most corporations. However, there are other laws that govern financial sectors.
You need to follow these procedures to set up a company in Costa Rica:
- a Public Notary drafts an incorporation deed, containing the company‘s by-laws and the appointment of the administrators
- shares issued in accordance with the shareholder‘s contributions
- registration fees paid and the incorporation deed submitted to the public registry (after which the company is assigned a corporate identification number)
7.1 IP Protection
Trademarks, designs, patents and copyright are the principal forms of IP protection available to companies and individuals.
In order to obtain a patent in Costa Rica, you must apply to the Registry Office. This process usually takes two years. Registering a trademark can take about 8 months.
8. Tax and customs considerations
8.1 Tax
Costa Rica provides the most attractive and cost-effective tax incentives in the region.
The FTZ Regime provides 100% tax exemption, with an option for either a 10-year period or no expiration period.
For manufacturing projects with an investment of £6.5 million or more, you can receive a 100% income tax exemption for 8 years, followed by 4 years at 50%. Companies that apply can set up their operations inside one of the privately-owned Free Trade Zone Industrial Parks. Most of these industrial parks are located within 20 miles from the main international airport.
Other taxes include:
- sales tax – 13%
- selective consumption tax – between 5% and 75%
8.2 Customs
You can find more about import tariffs in the Market Access Database.
Customs procedures in Costa Rica are carried out through an agent responsible for presenting declaration forms to the Customs Office.
8.3 Documentation
The importer must provide all required documentation, such as:
- commercial invoices
- bills of lading
- insurance agreements (if any)
- technical specifications
Documents issued abroad must be authenticated by the corresponding Costa Rican Consular authority.
9. Business behaviour
Businesspeople will generally speak reasonable English, but if not they will let you know.
It is important to establish a solid relationship with Costa Rican counterparts before proceeding to business discussions. Costa Ricans have a strong sense of self-image but dislike arrogance – expecting people with high rank to be humble.
10. Entry requirements
You don’t need a visa to enter Costa Rica for stays of less than 3 months. You should hold a valid passport.
10.1 Travel advice
If you’re travelling to Costa Rica for business, check the Foreign and Commonwealth Office (FCO) travel advice beforehand.
11. Contacts
Contact the Department for International Trade (DIT) team in Costa Rica for more information and advice on opportunities for doing business in Costa Rica.