CORPORATE RELOCATION | Where CoRelo? COSTA RICA .....NOWHERE IS THE LUCRATIVE LURE OF LATIN AMERICA FOR CORPORATE RELOCATION MORE MANIFEST THAN IN THE HIGHLY COMPETITIVE FIELD OF CALL CENTERS
The economic, political and social stability of Costa Rica is a major contributor to its enormous success in attracting foreign investors.
So many foreign corporations have established plants and regional operations in Costa Rica since 1995 thats its impossible to list them all in this small space. But some of the better known include Intel, Panasonic, Glaxco Smith Kline, Pfizer, Alcatel, Roche Pharmaceutical, Wal-Mart, Syngenta, L 3 Communications, Intertec, APL Logistics, Exactus, Alterra Partners, Align Technology, Cypress Creek Technologies, ArthroCare, Abbott Labs, Wrangler, Seton Corporation, ALCOA, Conair, Kimberly Clark, Levi Strauss, Hanes, PPC Industries, Weststar Medical, Medex Medical, AMACAI Information Corporation, Hoffman La Roche, Panasonic, Bourns Trimpot, ITT Canon, Micro Technologies, Baxter Health Care, Boston Scientific, Merck Sharpe and Dome, along with financial giants CitiBank, HSBC, and ScotiaBank.
COSTA RICA'S FREE TRADE ZONES
Costa Rica's Free Trade Zones have been designated by the government for companies to locate, utilizing the countries labor force and resources to produce goods and services. Free zones are considered extraterritorial for customs and fiscal purposes.
These special installations are used for economic operations based on the use of imported raw materials and inputs for the manufacture, assembly or marketing of products and services which will subsequently be exported.
They offer a series of tax incentives, rapid and simplified customs procedures, unrestricted handling of foreign currency, and a wide range of support services, including post offices, banks, couriers, messengers, daycare centers, employment, medical and other services.
TAX BENEFITS OF THE FREE ZONE REGIME
 100% tax exemption on raw materials, components and intermediate products.
100% tax exemption on machinery, equipment, parts and tools.
100% tax exemption on exports.
100% tax exemption on work vehicles.
100% tax exemption on capital repatriation and profits.
100% tax exemption on local sales and consumption taxes.
100% tax exemption on capital, assets, real estate transfer and municipal taxes and patents during the first 10 years of operation.
Customs on-site
Up to 25% of production can be sold on the local market as an import substitution.
Other Free Trade Zone Incentives
The Free Trade Zone law is comprised of an incentive and benefit package granted by the Costa Rica government for those companies that perform new investments in the country and comply with certain requisites.
Among these basic requisites are to perform an initial capital investment of at least $150,000 if installation occurs in an industrial park, or $2,000,000 for those companies wishing to install outside the parks (manufacturing plants only).
CORPORATE REAL ESTATE
There are numerous options for installing company operations in Costa Rica. There is an excellent distribution of basic public services, road network, productive infrastructure of services, import and export facilities, which are always found nearby.
Companies can choose to establish themselves in an industrial park, which have been authorized as Free Trade Zones, or outside these zones (in national customs territory).
If a company decides to install outside the parks, they can also be designated to operate under this free trade zone regimen, and receive the corresponding incentives, with flexible localization.
FREE TRADE ZONE PARKS
Free Trade Zone Parks have land and buildings managed by a private company, which are especially designed to provide companies with services such as customs, health, security, maintenance, childcare, garbage collection, and other benefits, including the presence of similar companies, suppliers and others who can provide required services.
The main Free Trade Zone Parks are located near the country's main airport (Juan Santamaria International Airport), at a mere average distance of 7 km. Companies that can benefit from these options include:
Companies that manufacture, process and assemble goods to be exported or re-exported.
Companies that only deliver, re-pack or re-distribute non-traditional goods to be exported or re-exported.
Companies that export services to companies or individuals established abroad or under the Free Trade Zone Scheme.
Companies that manage parks dedicated to company installation under the Free Trade Zone scheme.
Research organizations. Companies dedicated to research and technology improvement.
Companies dedicated to the operation of piers, dry or floating docks construction, and ship repair and service.
Benefits that Companies Receive: Raw material import tax exemption, including fuel 100% Machinery and Equipment import tax exemption 100%
Income tax exemption 100% for 8 years, 50% following 4 years (terms extended to 12 & 6 years in less developed zones)
Repatriated Profit exoneration. 100%
Sales or Added Value Tax exemption 100%
Asset tax exemption 100% for 10 years
Municipal tax exemption and other fees. 100% for 10 years
Local sales limitation (corresponding tax payment) Up to 25% in manufacturing; and 50% for services
Foreign currency management restriction -none
Local purchase requirements - none
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CLICK HERE | | | | COUNTRY PROFILE
Costa Rica, officially the Republic of Costa Rica is a Republic in Central America, bordered by Nicaragua to the north, Panama to the south-southeast, the Pacific Ocean to the west and south, and the Caribbean Sea to the east.
Geography - Area: 51,100 sq. km (19,730 sq. mi.) about the size of the states of Vermont and New Hampshire combined
- Cities: Capital--San Jose - greater metropolitan area pop. 2.1 million Other major cities outside the San Jose capital area--Puntarenas, Limon, and Liberia.
- Terrain: A rugged, central range separates the eastern and western coastal plains.
- Climate: Mild in the central highlands, tropical and subtropical in coastal areas.
COSTA RICA PROTECTS 23% OF ITS NATIONAL TERRITORY WITHIN A PROTECTED AREAS SYSTEM. IT ALSO POSSESSES THE GREATEST DENSITY OF SPECIES IN THE WORLD. GOVERNMENT AND POLITICAL CONDITIONS
Historically, Costa Rica has enjoyed greater peace and political stability than most other Latin American nations. Costa Rica is a democratic republic with a very strong system of constitutional checks and balances. Costa Rica has no military and maintains only domestic police and security forces. A professional Coast Guard was established in 2000.
Costa Rican church
Costa Rica has long emphasized the development of democracy and respect for human rights. Costa Rica is an active member of the United Nations and the Organization of American States. Costa Rica holds a seat on the Inter-American Court of Human Rights and on the United Nations University of Peace and many other international organizations related to human rights and democracy.
ECONOMY Compared with its Central American neighbors, Costa Rica has achieved a high standard of living, with a per capita income of about U.S. $5,100, and an unemployment rate of 6.6%. During 2006 the annual inflation rate dropped into the single digits (9.43%) for only the third time in the last 28 years; proof that the Costa Rican Government is seriously trying to reduce its large fiscal deficit. For the fiscal year 2005, the country showed a government deficit of 2.1%, internal revenue increased an 18%, exports increased a 12.8% and the number of visiting tourists increased a 19%, reaching 1.5 million people.
For 2006 the economy is expected to grow 6.8%. In recent years, Costa Rica has successfully attracted important investments by several global high tech corporations that have already started developing in the area exporting goods including chip manufacturer Intel, pharmaceutical company GlaxoSmithKline, and consumer products company Procter & Gamble. Trade with South East Asia and Russia has boomed during 2004 and 2005, and the country is expected to obtain full Asia-Pacific Economic Cooperation Forum (APEC) membership by 2007.
Two-way trade between the U.S. and Costa Rica exceeded $7.9 billion in 2006.
Costa Rica has oil deposits off its Atlantic Coast, which have not been developed due to environmental reasons. Mild climate and trade winds make neither heating nor cooling necessary, particularly in the highland cities and towns where some 90% of the population lives.
People
Unlike many of their Central American neighbors, present-day Costa Ricans are largely of European rather than mestizo descent; Spain was the primary country of origin. - Nationality: Costa Rican(s)
- Population (2007 est.): 4.13 million
- Annual growth rate (2007 est.): 1.41%
- Ethnic groups: European and some mestizo 94%, African origin 3%, Chinese 1%, Amerindian 1%, other 1%
- Religion: Roman Catholic 76.3%, Evangelical 13.7%, Jehovah's Witnesses 1.3%, other Protestant 0.7%, other 4.8%, none 3.2%
- Languages: Spanish
- Education: Years compulsory--9. Attendance--99% Literacy--96%
- Health: Life expectancy--men 74.61 yrs., women 79.94 yrs
- Work force (2006 est., 1.866 million; this official estimate excludes Nicaraguans living in Costa Rica legally and illegally): Agriculture--13%; industry--22%; services--64%
- Expatriate community: consists of people of all ages from the United States, Canada, Germany, Netherlands, Britain, and other countries
Government -
 Type: Democratic republic - Independence: September 15, 182
- Constitution: November 7, 1949
- Branches: Executive--president (head of government and chief of state) elected for one 4-year term, two vice presidents, Cabinet (15 ministers, two of whom are also vice presidents).
- Political parties: National Liberation Party (PLN), Citizen's Action Party (PAC), Libertarian Movement Party (PML), Social Christian Unity Party (PUSC), and other smaller parties
- Suffrage: Universal and compulsory at age 18
Economy - GDP (2006): $20.77 billion
- GDP PPP (2006 est.): $48.77 billion
- Inflation (2006 est.): 9.43%
- Real growth rate (2006 est.): 4.7%
- Per capita income (2006): $5,100. (PPP $12,000, 2006 est.)
- Unemployment (2006 est.): 6.6%
- Currency: Costa Rica Colon (CRC)
- Natural resources: Hydroelectric power, forest products, fisheries products.
- Agriculture (8.6% of GDP): Products--bananas, pineapples, coffee, beef, sugar, rice, dairy products, vegetables, fruits and ornamental plants
- Industry (31% of GDP): Types--electronic components, food processing, textiles and apparel, construction materials, fertilizer, medical equipment.
- Commerce, tourism, and services (60.4% of GDP): Hotels, restaurants, tourist services, banks, and insurance
- Trade (2006 est.): Exports--$7.931 billion: bananas, pineapples, coffee, melons, ornamental plants, sugar, textiles, electronic components, medical equipment. Major markets--U.S. 42.6%, Hong Kong 6.9%, Netherlands 6.4%, Guatemala 4.2%. Imports--$10.88 billion: raw materials, consumer goods, capital equipment, petroleum. Major suppliers--U.S. 41.3%, Japan 5.6%, Venezuela 4.8%, Mexico 4.8%, Ireland 4.3%, Brazil 4.2%, China 4.2%.
In recent times electronics, pharmaceuticals, financial outsourcing, software development, and ecotourism have become the prime industries in Costa Rica's economy. High levels of education among its residents make the country an attractive investing location.
Costa Rica's location provides easy access to American markets as it has the same time zone as the central part of the United States and direct ocean access to Europe and Asia. A country wide referendum has approved a free trade agreement with the United States
.
With a $1.7-billion-a-year tourism industry, Costa Rica stands as the most visited nation in the region. Eco-tourism is extremely popular with many tourists visiting the many protected areas around the country.
The unit of currency is the colón (CRC), which trades around 518 [2] to the U.S. dollar; currently about 675 to the euro.
UTILITIES
A modern system of hydroelectric generating plants provides abundant electricity.
In 1994 the first geothermal generating station came on line providing an additional 22 megawatts of low cost energy. Electrical service is the same as in the US: 120V, 60Hz and use the same type of wall plug.
Water supplies are chlorinated and the quality is controlled by the State. Water is safe to drink in all cities.
COMMUNICATIONS International air carriers include American, United, Continental and Delta Airlines. LACSA is the official Costa Rican carrier. LTU, MartinAir, Mexicana, Taca, Iberia that have Costa Rica as a destination. Major U.S. cities with direct flights to Costa Rica include Miami, Los Angeles, Houston, New York, Orlando, New Orleans, Atlanta and others. Flights are generally 2.5 to 3 hours.
The modern telephone system provides direct-dial service to most countries, via satellite; it ranks among the best in Central and South America and 80% of the population having easy access to telephone services.
There are seven daily newspapers (one belonging to the State), four weekly news magazines (one belonging to the State).
Of 119 radio stations, 102 are commercial and 17 belong to public service institutions.
Twelve color TV broadcasting stations. Various cable and subscription TV services provide programming from satellite feeds.
The efficient postal system includes the central office in San José and branches in all population areas. The current cost to mail a letter to North America is 50 colones.
HEALTH SERVICES
The social security system was established in 1941 and provides services to over 80% of the population. Approximately 10% of the national budget is used for public health matters
There are 30 hospitals and 116 clinics (providing a total of over 7,000 beds) in a network of public and private institutions
Life expectancy is between 72 and 77 years
The public water system provides good quality water around all major
Although most medications are available here, as a security measure you should pack sufficient quantities of any prescription drugs that you may be taking. Costa Rica has created one of the most attractive investment environments in Latin America. Along with its benign climate, mountainous rainforest regions, and straddling of Central America with a Pacific and a Caribbean coastline, its also a wonderful place to live. | | | COSTA RICA'S CORPORATE RESOURCES An Educated Workforce
Between 1993 and 2002, over 10,100 university degrees in the field of engineering were granted, reflecting the demand for qualified workers by both foreign and local companies. Costa Rica enjoys a high literacy rate of 94.9% that compares favorably to other developing nations.
COSTA RICA NOW HAS ONE OF THE HIGHEST HUMAN DEVELOPMENT INDEXES AMOUNG DEVELOPING NATIONS AND ONE OF THE HIGHEST LITERACY RATES IN THE AMERICAS.
Higher Education
The Costa Rican workforce is considered perhaps the most important attraction for foreign investors, as the population is highly literate and well educated. The government has long placed a high priority in investing in public education, which includes the university system as well as the technical and vocational training scheme.
The abolishment of the armed forces in 1949 freed resources that have mostly been invested in free education and health services for the population, while a generous education expenditure ratio of more than 5% over GDP is currently maintained by law.
As a reflection of these efforts, Costa Rica now has one of the highest Human Development Indexes among developing nations (0.834), and one of the highest literacy rates of the Americas (94.9%); in addition, the expected number of years of schooling has been calculated at 10, according to World Bank's World Development Indicators in 2004. A nation that long ago realized the importance of education which currently allocates more than 6% of its GDP to educational programs.
Costa Rican investment in higher education is yielding substantial benefits.
Universities produce not only highly trained individuals, who are very well appreciated by the multinational companies, but also entrepreneurs with the ability to develop their own companies, specially in high-tech areas.
Currently, Costa Rica has fifty-four universities, four of which are public and the rest are privately owned and managed.
High School Education
In Costa Rica, the academic schools focus on science and humanities, while the technical schools prepare students in areas such as accounting, microelectronics, electro mechanics, industrial electronics, precision mechanics, computer programming and network administration.
High school education, which is a 5-year program, is divided in two cycles and upon completion of each cycle, students are required to pass tests on all subjects studied during those years. At the culmination of a high school education, all students and are required to pass the "Bachelors Tests" in order to receive a high school diploma, which is required for admission to Universities.
Schools are allowed to change the curriculum to satisfy the needs of a changing society, but are also monitored to ensure excellence and quality. As a result of this organizational axiom, Costa Rica has developed a diverse and sophisticated educational framework that adequately fulfills the needs of the private sector through enhancing the abilities and knowledge of the students.
Amid the private schools, there are excellent institutions with a cultural emphasis on the United States, the United Kingdom, France, Germany and Israel, which further complements the range of cultural diversity of the school system.
Because of the advances in elementary schooling, Costa Rican High School Graduates are educated; enjoy a working knowledge of English, an increasing ability to use computers and proven aptitude for developing new skills and tasks.
English Skills
Costa Rica's educational system places a strong emphasis on computer and English skills beginning in the early grades. To this respect, an official nationwide survey showed that more than 258,000 Costa Ricans could speak English well. In fact, 82.5% of all Secondary Education students, and 50% of all elementary students have computer-based education.
English as a second language is nearly universal in secondary education.
The Government has put special interest in providing increased resources to enhance existing English programs and create additional interest nationwide. As a result, a unique, free and widespread education system allows firms to find a wide array of human resources at various levels, from technical schools to university degrees.
Political Stability
The economic, political and social stability of Costa Rica has enabled it to achieve a high level of success in alluring foreign investors.
A RECENT WORLD BANK SURVEY FOR GLOBAL GOVERNANCE INDICATORS PLACED COSTA RICA FIRST WITHIN LATIN AMERICA FOR POLITICAL STABILITY AND FOR ABSENCE OF VIOLENCE.
This measure includes several indicators, such as the likelihood of the government in power being destabilized or overthrown by unconstitutional and/or violent means, as well as measures that assess the threat of domestic violence and terrorism.
Costa Rica enjoys worldwide recognition as a stable democracy during its 115 years history.
Its respect for political and peace processes have been further enhanced by the abolition of the military in 1949. International acknowledgment was received in 1987 when then President Oscar Arias Sanchez was awarded the Nobel Peace Prize. He is once again president of the nation and the countries main proponent of the new CAFTA trade treaty with the USA.
Economic Development
Trade liberalisation allowed exports to increase as a percentage of GDP from 30% in 1980 to the current 50% rate.
It has been accompanied by structural changes that have led to productivity growth, diversification of the economy, and higher levels of foreign investment. Costa Rica is one of the most stable economies in Latin America.
After the last economic crisis 25 years ago caused by external debt, it has maintained a yearly current average growth rate above 7.9%, resulting in a per-capita income level of $5,031 for 2006. Costa Rica has since benefited from excellent access to global capital markets, which is reflected in recent sovereign debt qualifications:
Ratings; 1. Moody's Ba1
2. FITCH Ratings BB
3. Standard & Poor's BB
Source: Risk Qualifiers January, 2006
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