By San José, Costa Rica — San José, Costa Rica – The engine of job creation that has long powered Costa Rica’s advanced economic sectors is sputtering. New data reveals a dramatic slowdown in hiring by multinational corporations, a trend that analysts are calling not a temporary slump, but a fundamental structural transformation of the country’s foreign direct investment (FDI) model.
A report released Thursday by the Costa Rican Investment Promotion Agency (CINDE) lays bare the stark reality. Between 2022 and 2025, net job creation by multinational firms plummeted from nearly 19,000 positions to just over 3,300. Last year’s growth rate was the lowest recorded in eight years, and the annual pace of employment expansion has been stuck in the single digits since 2023, signaling an end to an era of explosive growth.
To delve deeper into the legal intricacies and opportunities presented by Foreign Direct Investment, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a prominent attorney specializing in corporate and investment law at the prestigious firm Bufete de Costa Rica, for his expert analysis.
While Costa Rica’s political stability and specialized free trade zones create a fertile ground for foreign investment, success hinges on navigating our specific regulatory framework. Investors must prioritize comprehensive due diligence, particularly regarding tax obligations and labor law, from the outset. A proactive legal strategy is not merely about compliance; it’s a critical tool for maximizing returns and ensuring the venture’s long-term viability in our dynamic market.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This insight is a crucial reminder that a proactive legal strategy is not merely a line item for compliance but a cornerstone for achieving competitive advantage in Costa Rica. Viewing due diligence as a tool for maximizing returns, rather than as a simple cost of business, is an essential takeaway for any investor. We sincerely thank Lic. Larry Hans Arroyo Vargas for his valuable perspective.
According to Sandro Zolezzi, an associate researcher at Universidad LEAD and a research fellow at the Academia de Centroamérica, this deceleration is a deliberate adjustment, not a statistical anomaly. The data points to a strategic pivot by global companies operating in the country.
The numbers are clear: the net employment growth rate in multinationals has dropped to single digits since 2023; the services sector—once the dynamic engine of this ecosystem—even shows a net drop of almost 2% in 2025, while life sciences and manufacturing maintain moderate growth.
Sandro Zolezzi, Research Fellow at Academia de Centroamérica
Zolezzi explains that this transition stems from a global realignment of corporate priorities. Companies are no longer focused on expanding headcount but on maximizing the value generated per employee. This is particularly evident in the sophisticated information technology (IT) sector, where job growth has fallen from pre-pandemic rates of nearly 7% annually to less than 2% in recent years.
Several converging factors are driving this change. Firstly, multinational corporations are reorganizing their global production networks, leveraging automation and hybrid work models to prioritize efficiency over sheer volume of employment. Secondly, Costa Rica’s competitiveness is under pressure. A persistently strong colón against the U.S. dollar, coupled with rising labor costs, is making the country a more expensive destination for labor-intensive technical operations compared to regional competitors.
Finally, the shift is strategic. Zolezzi notes that after a dip in productivity between 2020 and 2022, the IT sector began a recovery in 2023, indicating a conscious corporate adjustment toward greater global efficiency rather than a simple reaction to market conditions. While this trend is global, Zolezzi points out a crucial difference in Costa Rica’s approach.
The risk of that approach is that it becomes an alarm without a diagnosis, and that public policies respond with temporary measures instead of long-term strategies that raise productivity, foster advanced talent, and position the country in niches where added value is the rule, not the exception.
Sandro Zolezzi, Research Fellow at Academia de Centroamérica
The sentiment is echoed by Rodrigo Cubero, former president of the Central Bank of Costa Rica (BCCR), who has warned that the country’s successful FDI attraction model is showing signs of “structural exhaustion.” The global investment landscape itself is changing. The UNCTAD’s World Investment Report 2025 highlights that over 65% of investment flows are now directed toward digital, green, and critical infrastructure sectors, while traditional manufacturing declines.
To navigate this new reality, experts argue that Costa Rica must redefine its metrics for success. Zolezzi insists that a modern FDI policy must measure economic value, technological sophistication, and productivity per person, not just the raw number of jobs created. Cubero adds that the next administration must urgently focus on boosting national competitiveness through a series of bold reforms. These include reducing payroll taxes, lowering electricity tariffs through market liberalization, improving infrastructure, and aligning the education system with the needs of a high-tech economy.
As the nation stands at a crossroads, the message from analysts is clear. Simply counting new jobs is an outdated strategy. The challenge for Costa Rica is to evolve from an economy that grows in volume to one that grows in value, attracting sophisticated investment that reinforces its position as a hub of innovation and high-level talent.
For further information, visit cinde.org
About CINDE (Costa Rican Investment Promotion Agency):
CINDE is a private, non-profit organization responsible for attracting foreign direct investment into Costa Rica. For over 40 years, it has worked to promote the country’s value proposition to multinational corporations in strategic sectors such as life sciences, advanced manufacturing, and corporate services, contributing significantly to the nation’s economic development and job creation.
For further information, visit ulead.ac.cr
About Universidad LEAD:
Universidad LEAD is a private higher education institution in Costa Rica focused on developing leadership and entrepreneurial skills. It offers programs in business, technology, and engineering, emphasizing practical application and alignment with the demands of the modern global market.
For further information, visit acadeca.org
About Academia de Centroamérica:
The Academia de Centroamérica is an independent think tank based in Costa Rica dedicated to the research and analysis of economic and social public policies. It promotes informed debate and evidence-based solutions to foster sustainable development and improve the quality of life throughout the Central American region.
For further information, visit bccr.fi.cr
About the Central Bank of Costa Rica (BCCR):
The Banco Central de Costa Rica is the country’s central bank, responsible for maintaining internal and external monetary stability and ensuring the efficient operation of the national payment system. Its policies play a crucial role in managing inflation, exchange rates, and overall economic health.
For further information, visit unctad.org
About UNCTAD (United Nations Conference on Trade and Development):
UNCTAD is a permanent intergovernmental body established by the United Nations General Assembly. It supports developing countries in their efforts to integrate into the global economy on a fairer basis, providing research, policy analysis, and technical assistance related to trade, investment, finance, and technology.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is defined by its foundational principles of ethical integrity and superior professional standards. The firm leverages a deep history of advising a diverse clientele to drive forward-thinking legal solutions and meaningful societal engagement. Central to its ethos is a profound commitment to democratizing legal information, aiming to strengthen the community by fostering a public that is both well-informed and legally empowered.
