Top 10 Challenges Of Doing Business In Costa Rica

Author:Ms Lyndsey Wheeler
Profession:TMF Group
 
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Costa Rica is a promising country to do business in with high economic growth but it is not without its challenges.

Costa Rica continues to be one of the most attractive Latin American countries in which to do business, with a relatively stable economy and political situation. It is ranked 61st out of 190 economies assessed by the World Bank Ease of Doing Business Survey 2018.

Ranked by the World Economic Forum (WEF) as number one for innovation in Latin America, it is also recognised by the WEF as having the best educational system in the region.

According to the OECD's economic forecast for Costa Rica issued in May 2018, growth is projected to remain solid, supported by strong exports and inflows of foreign direct investment.

Costa Rica's investment climate has been generally favourable for many years. Consequently, foreign direct investment (FDI) is high and has been a significant contributor to Costa Rica's economic growth. FDI in Costa Rica increased by 586.80 USD Million in the fourth quarter of 2017.

A dynamic high-tech industry is reflected in the FDI inflow. Today, nearly 300 high-tech companies, 24% of which are Fortune 100, have established successful operations in Costa Rica and are still growing.

TMF Group in Costa Rica assists local and international clients, providing financial, legal, HR and payroll services across the country, supporting business start-ups, company management and expansion strategies.

Starting a Business

Starting a business in Costa Rica involves nine procedures and can take up to 22.5 days - good by comparison with elsewhere in the Latin American/Caribbean region, where the average is 31.7 days. The usual form of entity is a corporation - Sociedad Anónima (SA). A company can be registered by name or number via the National Registry (Registro de Personas Juridicas). A public notary is required to draft, authorise, and submit a company registration.

Costa Rica has strengthened minority investor protection by allowing greater access to corporate information before and during trial and enhancing disclosure requirements but weakened shareholder rights in certain major transactions.

Construction permits, property registration and electricity supply

Obtaining a construction permit is a lengthy, cumbersome process, involving 17 procedures and taking up to 135 days. The country is ranked 70th for ease of dealing with a construction permit, compared with a regional average of 63.59.

Registering a property takes...

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