San Jose, February 24, 2023. This week
Costa Rica took a leap towards boosting its competitiveness with new incentives promoting foreign direct investment throughout the country, specifically in
emerging regions, with the signing of nine government decrees for implementing Law 10234 on Strengthening of Territorial Competitiveness for Attracting Investment Outside the Greater Metropolitan Area (GMA).
The law provides 11 new generation incentives aimed at enhancing territorial competitiveness, speeding up paperwork, and opening up the development possibilities of sectors such as agroindustry, food industry,
light manufacturing,
tourism infrastructure, and
services in the cantons of these emerging regions, where close to 49% of the country’s population resides.
Existing regulations provide legal security for setting up the operations of new domestic and foreign investment projects in cantons outside the GMA under the free trade zone model, thus helping to generate quality, formal jobs in different regions in the country.
CINDE Managing Director Jorge Sequeira noted,
“Law 10234 is the fruit of years of coordinated efforts to shrink gaps between regions within and outside the GMA, bringing job opportunities to regions where they are needed and enabling them to take advantage of the knowledge transfer contributed by multinational companies. With the provision of regulations, Costa Rica has more instruments - tangible and competitive - so that investors who wish to grow their operations in any of these regions now have more options, legal certainty, and the distinguishing features of Costa Rican talent.”The regions currently have the technical inputs of analysis and investment guides for potentiating the characteristics, main opportunities, and attractions they offer to investors. New incentives include this new law, which promotes and enables institutions such as the National Learning Institute (INA), Ministry of Science, Technology, and Telecommunications (MICITT), Public Services Regulatory Authority (ARESEP), and Rural Development Institute (INDER), to mention a few, to work toward strengthening their services in regions outside the GMA.
Incentives will also boost employment, both direct and indirect, for all types of profiles, from persons with little schooling to professionals, and promote reskilling and new skills for talent transformation.
The Law on Strengthening of Territorial Competitiveness for Promoting Investment Outside the GMA also showcases opportunities for bolstering the production linkages of Costa Rican suppliers who to date sell more than $3,500 million to companies set up under the free trade zone regime (FTZR).
“In CINDE we have been working for several years on strategic projects with 20 cantons outside the GMA in the country’s six regions with the goal of coordinating them and creating investment committees. We are confident that the results obtained during this period will now be potentiated. We calculate that to date the multinational companies attracted by CINDE are creating more than 5,300 jobs outside the GMA, with ten new company investments in 2022 in all sectors - life sciences, services, manufacturing, and tourism infrastructure,” added Sequeira.
The
free trade zone regime has proven to be a successful model for driving development through job creation, production recovery, and production linkages, which have been measured and meet the standards of the World Trade Organization and the OECD. For each $1 in tax incentives, for example, the country receives $2.43 in return.
About CINDEThe Costa Rican Investment Promotion Agency (CINDE) has been attracting foreign direct investment to Costa Rica for more than 40 years.
CINDE’s record includes support for helping more than 400 multinational companies set up in Costa Rica in manufacturing, knowledge-intensive services, life sciences, and tourism infrastructure. It has become a strategic partner for achieving sustainable productivity and driving investment with the purpose to contribute to the country’s social and economic development.
A private, non-political agency declared of public interest; the International Trade Centre has ranked CINDE for five consecutive years since 2017 as the world’s top national investment attraction agency.
