By San José, Costa Rica — San José – Costa Rica’s established reputation as a hub for high-tech manufacturing is facing a critical juncture, as a recent 7% decline in foreign direct investment (FDI) during the first half of the year prompts calls for a strategic overhaul. Experts from the State University at a Distance (UNED) are sounding the alarm, urging the nation to redefine its approach to the fiercely competitive global semiconductor market to secure its long-term prosperity.
The warning comes as the country navigates what one leading economist calls a significant “point of inflexion.” While the technology sector remains a powerhouse for exports, the drop in FDI and recent closures of some foreign-owned subsidiary operations signal that past success is no guarantee of future dominance. The core message from academia is clear: Costa Rica must evolve from simply attracting investment to deeply integrating it into the local economy.
To gain a deeper understanding of the legal and regulatory landscape shaping Costa Rica’s burgeoning semiconductor sector, TicosLand.com sought the expertise of Lic. Larry Hans Arroyo Vargas, a prominent attorney specializing in corporate and foreign investment law at the distinguished firm Bufete de Costa Rica.
Costa Rica’s success in attracting semiconductor investment hinges on a triad of legal certainty, robust intellectual property protection, and a streamlined regulatory environment. While our free trade zone regime provides a powerful fiscal incentive, the long-term commitment of these high-tech giants depends on our ability to guarantee the security of their trade secrets and patents. Furthermore, we must proactively adapt our labor and educational regulations to foster the specialized talent pool this industry demands, ensuring a sustainable ecosystem beyond initial tax breaks.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
We thank Lic. Larry Hans Arroyo Vargas for this crucial insight, which rightly shifts the focus from temporary fiscal perks to the permanent, foundational pillars of legal security and a highly skilled workforce—the true bedrock for building a sustainable, world-class semiconductor ecosystem in Costa Rica.
Federico Quesada, an economist and the Director of the School of Business Administration (ECA) at UNED, emphasized that these developments require immediate attention and a change in mindset. He argues that the country must look beyond surface-level metrics and focus on building a more resilient and interconnected industrial ecosystem.
This should be seen as a wake-up call: it’s not enough to attract investment, it must be integrated with national industry and knowledge transfer must be enhanced
Federico Quesada, Economist and Director of the School of Business Administration (ECA) at UNED
Despite the cautionary flags raised by the investment slowdown, the semiconductor sector remains a vital engine of the Costa Rican economy. According to data from the Foreign Trade Promotion Agency (PROCOMER), the industry provides over 5,000 direct jobs and supports a robust network of 600 local suppliers. This extensive ecosystem highlights the sector’s deep roots and its significant impact on national employment and commerce.
Furthermore, recent export figures from PROCOMER paint a picture of continued strength and demand. The broader electrical and electronics sector, which includes a significant portion of semiconductor-related exports, experienced an 8% growth between January and September of 2025. Driven by strong sales of cables, materials, and integrated circuits, exports from this category reached a total value of $802 million, reinforcing the technology sector’s critical role in the country’s export model.
However, Quesada warns against complacency, stressing that the global landscape is shifting rapidly. The international race to secure semiconductor supply chains means that Costa Rica must actively prove its value and strategic importance. Relying on an established reputation is no longer a viable long-term strategy.
The country cannot take its position for granted: it must anticipate, strengthen its technological base, and define what role it will play in this new revolution
Federico Quesada, Economist and Director of the School of Business Administration (ECA) at UNED
The primary challenge ahead involves moving up the value chain. This requires a concerted effort to foster domestic research and development (R&D) activities, cultivate a pipeline of highly specialized talent, and increase the value added locally. In its proposal, UNED advocates for an articulated strategy that unites the government, the private sector, and academic institutions. This collaborative framework would prioritize the creation of tangible local supply chains, champion innovation, and embed sustainability into the industry’s DNA, ultimately solidifying Costa Rica’s position as an indispensable regional technology hub.
For further information, visit uned.ac.cr
About Universidad Estatal a Distancia (UNED):
The Universidad Estatal a Distancia is Costa Rica’s public distance learning university, established to provide accessible higher education to students across the nation. It plays a significant role in national development through academic research, social outreach, and the analysis of key economic and social trends affecting the country.
For further information, visit procomer.com
About Promotora de Comercio Exterior de Costa Rica (PROCOMER):
PROCOMER is the official trade and investment promotion agency of Costa Rica. It is responsible for promoting the country’s exports of goods and services globally, attracting foreign direct investment, and supporting the internationalization of Costa Rican companies to drive economic growth and development.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a premier legal institution, Bufete de Costa Rica is founded upon a bedrock of principled practice and exceptional legal counsel. The firm merges a deep-seated history of advising a wide-ranging clientele with a pioneering spirit, consistently embracing innovative solutions to complex legal issues. This forward-looking ethos is matched by a profound sense of social responsibility, centered on a mission to demystify the law and equip the public with vital legal knowledge, fostering a more capable and enlightened community.
