4:24 PM, February 1, 2023

Costa Rica: LATAM’s global business centre

Foreign Direct Investment
| The European | 9 January 2023

An interview with Jorge Sequeira, Managing Director of CINDE

Since its creation in 1982, the Costa Rican Investment Promotion Agency (CINDE) has promoted the nation’s FDI in strategic sectors such as smart manufacturing, knowledge-intensive services, medtech and agribusiness. The agency has successfully generated employment and greater opportunities for the people of Costa Rica with the goal of contributing to the country’s social and economic development. For the last five consecutive years, CINDE was ranked as the world’s top institution in attracting foreign direct investment by the International Trade Center of the United Nations.

The European went into more detail about CINDE’s work with Managing Director, Jorge Sequeira.

The European: CINDE has helped over 400 technology companies establish operations in Costa Rica. Tell us about how the agency works, and the sectors you work with.

Jorge Sequeira: CINDE is the Investment Promotion Agency of Costa Rica. We’re a private, non-political and non-profit organisation. I think that’s what really sets us apart from other investment promotion agencies around the globe. We work very closely with the ministry of foreign trade and the Exports Promotion Agency, in a public-private partnership. For over 40 years our role has been to attract companies and help diversify Costa Rica’s economy. Costa Rica has transformed over this period from an agricultural economy relying on four basic products: sugar, meat, coffee and bananas, to a fully diversified economy. We now export over 4,000 different products to 160 countries around the world. In fact, the number one export today is not a product, it’s services – Knowledge- Intensive Services, of which we exported $7bn dollars in 2021. And the number one export product is medical devices, of which we will export $6bn dollars in 2021.

TE: Take us through the process. How do you support companies looking to invest in Costa Rica?

JS: At CINDE, we help companies in the site selection process. Once they decide on Costa Rica, that’s when our true job starts – to help facilitate the whole installation process of those companies in Costa Rica. We sort of hold their hand throughout the whole process to make it quick and easy for them to establish operations in Costa Rica. Once the company is operating and happy in our country, we go onto the after-care process. We help them understand opportunities of diversifying, sophisticating and growing their current operation. We work with our clients through the whole life-cycle and continue supporting them and providing our services, which, all of them are 100% free.

TE: CINDE promotes the idea of Sustainable Productivity. Please expand on this concept, and how it underpins your work.

JS: Sustainable Productivity has to do with a value proposition. We basically talk about the “3 Ps” – People, Planet, and Prosperity. “People” has to do with the fact that Costa Rica was the first country in the world to abolish its army 70 years ago. We took that money and invested it in health and education. So, today we have developed a talent pool, which is what multinationals are looking for. “Planet” stands for the fact that it’s one of the most sustainable, environmentally friendly countries in the world. 99% of our electric grid is clean and renewable. This means that a company that comes to operate in Costa Rica just connects to our matrix, and will be automatically carbon neutral – at least from the point of view of electric consumption. “Prosperity” has to do with the collaborative ecosystem of these 400 companies. Even though they might be competitors, globally speaking, in Costa Rica they collaborate to create a more productive and more competitive ecosystem. Working with academia, with local governments, and with the communities. All of that combined is what we call Sustainable Productivity.

TE: How has Sustainable Productivity become a driver for companies expanding their operations in Costa Rica?

JS: Companies are looking at the sustainability factor when making decisions. Their consumers want to make sure they’re buying products and services from companies committed to sustainability, to the UN’s Sustainable Development Goals. The fact that Costa Rica is a global leader in sustainability, the first country awarded by the United Nations for its efforts in sustainability, that we have this clean and sustainable energy matrix, and so on, allows us to offer companies the possibility to come and operate in a sustainable way. More and more companies tell us that it’s not just about cost. It is more important to find the right talent, a sustainable location, including the environment, gender equality, diversity and inclusion.

TE: Please expand on the type of companies investing in Costa Rica. What are the primary sectors?

JS: The main sectors that we work with are services, divided into digital technologies which include companies such as Microsoft, Amazon etc. And then, corporate services, which are companies of any industry that serve global markets, whether it’s internal services as a back office, or to serve their customers globally from Costa Rica in multiple languages. The second sector is medical devices, where we have 100 global leading companies. It has become the No.1 goods export sector in Costa Rica, and we have a robust group of local suppliers. Then we have advanced manufacturing – for example Intel, which has a very large footprint in Costa Rica in R&D – has a final testing and assembly plant. We have companies such as Zollner, Samtec and many others. Then we have the food industry and the agribusiness sectors that are becoming more and more important, as we try to bring more investment into regions outside the greater metropolitan area.

TE: Why do technology enterprises see Costa Rica as a good base from which to scale-up regional operations?

JS: It’s really all about talent. Globally, these companies will go searching for the talent wherever they can find it, and because Costa Rica has invested in its population, making it is a perfect place for companies to come and do business, to deliver services.

“Sustainable Productivity has to do with a value proposition”
—————————-
Jorge Sequeira, Managing Director of CINDE

TE: Costa Rica’s Free Trade Zone Regime is one of the main reasons for companies’ re-investment. Explain what the Free Trade Zone Regime is.

JS: Costa Rica offers an OECD and WTO compliant free trade zone. This allows up to 0% income tax, 0% import tariffs, 0% repatriation tax – almost indefinitely, because you can get those benefits for 8 years, but then you can reset the clock if you reinvest again before those 8 years are up.

TE: As mentioned earlier, you’ve helped over 400 technology companies establish themselves in Costa Rica, including Intel, Pfizer, Amazon, Microsoft, Coca- Cola, Bayer. What is your message to other companies looking to expand to your country?

JS: Well, I would say, don’t even think about it, come, we have the track record, you will be in good company. It’s a place that has almost everything. First of all, the talent, and a great geographic location with access to both the Atlantic and Pacific. We’re very small geographically and in the same timezone as the central United States – there are dozens of daily flights to all the major cities in the U.S. We have a great free trade agreements with 2/3 of the world’s GDP and populations, including all of the Americas – Canada, the U.S. and Mexico – and with China, and the EU. So, overall, it’s a great place to do business.

Further information

www.cinde.org

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