Working in Costa Rica

The establishment of a peaceful democracy decades ago has allowed Costa Rica to concentrate on education and commerce.

While agriculture is still the mainstay of its economy, the country has become a regional leader in technology and tourism. Bananas, beef, coffee, and sugar are still the country’s top exports, but Costa Rica now exports many high-value products, including microchips and medical supplies. At the same time, its biodiversity has made it a major destination for eco-tourists.

Investors from the U.S. and elsewhere are understandably impressed with Costa Rica’s political stability and high education levels. Among the hundreds of American companies in Costa Rica are big names such as Cisco Systems, Coca-Cola, Colgate-Palmolive, IBM, Intel, Johnson & Johnson, Microsoft, Amazon, Oracle, Pfizer, 3M, and Walmart.

Doing Business

One big advantage of doing business in Costa Rica is the ease of language. The standard of English among Costa Ricans is very high and is constantly improving.

It has other advantages, too. Both personal and business accounts are relatively easy to set up. Access to capital to start or operate a business will depend on the type of business and the collateral that will be provided. For example, Costa Rica wants to promote exports, so it is easier to obtain capital for businesses that export products out of Costa Rica. However, as long as an expat has legal residence in Costa Rica, access to financing would be similar to that of a Costa Rican.

In order to work in Costa Rica, you must either be a citizen of the country or have legal permanent residence. With other residence options (rentista, pensionado, etc.), you can own a business, but you cannot work in that business. Your responsibilities must be limited to the management of the business.

If you want to invest at least $150,000 in Costa Rica, you can become a resident under the Inversionista Program.

If you are highly skilled in an area where a Costa Rican cannot fill that job, your employer can apply for a work permit for one year, but this can be very difficult to get. These laws are designed to protect workers here from foreigners who would take jobs that a Costa Rican would otherwise fill.

Starting Your Own Business

To start a business in Costa Rica, you must register with the Tax Department to get your taxpayer identification. You also need a Municipal Business License from the local government where the business is located.

Also, as long as you abide by the Costa Rican labor code, there are no restrictions as to the number or nationality of the people you employ, and you can open up any type of legal business you like.

One of Costa Rica’s main sources of revenue is tourism, with the bulk of visitors coming from the U.S. Because of this, businesses targeting these visitors have proved very attractive to overseas entrepreneurs.

One downside is that rents on commercial premises are quite expensive in comparison with other countries in the region. Because high-quality premises are often in demand, it can be difficult to negotiate good terms. If you are outside the most hotly contested city districts, you can negotiate more business-friendly terms.

Another cost worth remembering is that electricity is charged at a higher rate for commercial premises. Expats should also be aware that some locals will attempt to boost prices when dealing with foreigners. However, if you are well-informed, you should be able to pay the same prices as locals for the goods and services your business needs.

Costa Rica's business outlook is good. Many medium—to large-sized businesses have relocated from the U.S. to Costa Rica to cut costs, and this trend seems to be growing in the post-pandemic recovery. However, depending on the type of business, small businesses may face an increase in bureaucracy, regulations, and taxes.

For more information on doing business in Costa Rica, contact the U.S. Chamber of Commerce, Costa Rica: website; www.amcham.cr or the Costa Rica Embassy: website; www.costarica-embassy.org/index.php?q=node/18.