Costa Rica is renowned globally for its natural beauty, a place where thousands of visitors each year explore incredible rainforests, and bask in the warm, welcoming culture. But what you might not know is that Costa Rica also boasts a world-class R&D landscape, comprising IT software development, electronics manufacturing for the smart tech industry, superfood development, and tier III to R&D for the MedTech industry. The country has been transformed in a matter of decades from a reliance on agriculture, to a diverse, thriving, modern economy, where the leading industrial export is medical devices. In total, Costa Rica exports 4,355 products and services to more than 151 countries, with preferential trade access to two-thirds of world GDP made possible by a strong network of Free Trade Agreements with, among others, the USA, Canada, the EU, China and Singapore.
Costa Rica’s commitment to peace made history, and has allowed it to build a safe, healthy and democratic country. It abolished its army voluntarily in 1948, becoming the first nation in the world to do so. This was one in a series of key decisions that shaped its history and laid down a marker for future development: nearly 80 years before, in 1869, it established free, universal public education, and in 1940, it created a public healthcare system. By eliminating military spending, it took development to the next level, allocating today 9.9% of GDP to health and over 7% to education.
Today, nearly 300 high-tech companies, 24% of which are Fortune 100, have established successful operations in Costa Rica and are still growing. In 2016 alone, nearly two-thirds of the companies currently investing expanded operations in the country. This dynamism reflects in FDI inflows, which are growing at an average 7.5% every year since 2005, and a GDP per capita PPP which is the highest in LATAM, at $16,142.
Costa Rica’s human capital is highly skilled, productive and motivated. The World Economic Forum ranks it No.1 for innovation in Latin America, and also recognises it for having the best educational system in the region.
Steadily forming in high-demand areas, Costa Rica enjoys a constant flow of STEM (science, technology, engineering and maths) university graduates at +7% every year and IT graduates at +4% annually. CINDE, the Costa Rican Investment Promotion Agency, works closely with companies investing the county to match their needs with academic initiatives. As a result, it has developed 23 technical or specialised programmes within the last decade, tailored to these specific requirements.
The nation has been recognised as Latin America’s leader in productivity. CINDE’s measurement has identified an average output per employee growth of 57% within the last decade, going from $35,000 to $55,000 per employee in the services sector; while the Medtech sector has experienced an average output growth of 45% since 1999, going from $76,000 to $110,000 per employee in 2015. A robust incentives package for investing companies which meets WTO standards, offers as low as 0% income tax, providing a full loop to achieve ROI on operations.
Costa Rica ranks second among Latin American countries in the ‘Enabling Trade Index’, and made an impressive leap of 25 positions in the ‘Ease of Doing Business Index’ between 2015 and 2016, positioning at No.58 – among the top third of countries. Multinationals also have their own customs code to complete their export processes on-site, and leverage a one-stop shop for exports procedures – whereby all export related documents (including health permits, etc.) are processed in a single location.
Achieving the triple bottom line: people, profit and the planet
Costa Rica has created a model where state-of-the-art technology goes hand in hand with sustainability. It’s ranked eleventh in the world in the ‘Global Green Economy Index’ performance. Almost 100% of electricity in Costa Rica is generated from renewable sources, a mix of hydroelectric, geothermal, biomass, solar and wind, which provides 99.43% of coverage in the nation’s territory. The focus is not only on clean energy but also in its performance where the country ranks third in Latin America, and thirteenth in the world on Energy Architecture Performance.
Industrial real estate and corporate office developers have also adopted ‘green’ initiatives for the construction sector. Costa Rica hosts the first LEED certified company in Latin America and has, to date, over 120 LEED certified projects under the Green Building Counsel. This includes the first LEED Gold Certified Business Center in Latin America which operates under the Free Trade Zone.
CINDE stands for ‘Coalición de Iniciativas para el Desarrollo’, or Coalition for Development Initiatives. It’s a name that’s true to its mission: to contribute to the country’s development by attracting foreign direct investment and promoting superior investment climate conditions. This private, non-profit, non-political organisation was established in 1984, and is the official agency responsible for Costa Rica’s FDI. To date, it has helped hundreds of companies set up and grow, and in the process has provided major benefits to the economy.
CINDE is committed to providing the best service and assistance to companies looking to invest, at no cost. An achievement that was recently recognised by The European for its ‘Best Investment Promotion Agency in Latin America’ award.
The agency is also one of the few, if not the only organisation of its kind, to have its operations certified as Carbon Neutral. An effort consistent with Costa Rica’s leading role and commitment to sustainable development, including safeguarding the environment and efficient use of resources. All of which contributes to the UN’s Sustainable Development Goals. It was also recently recognised by the Great Place To Work institute.
Some of the key areas where CINDE provides support to investors are: Assistance in site selection; meeting investor needs; as a mediator between public and private sector with companies leveraging CINDE’s services; and specialised support once the company is established in Costa Rica by providing help with strategic aspects geared towards expansion projects or promoting product diversification. The strong working relationships CINDE has with multinationals, global organisations, government bodies, universities and academia mean these services can be delivered at the very highest level.