By San José, Costa Rica — Costa Rica’s economic growth strategy is reaching an important turning point as domestic suppliers transition from simple vendor roles into vital strategic partners. According to a new study released by professional services firm EY, local businesses providing goods and services to multinational companies in free trade zones are gaining the technical sophistication required to power the country’s next wave of economic expansion.
The report, titled “Built in Costa Rica: Companies Driving Competitiveness Behind Free Trade Zones,” relies on in-depth interviews with domestic businesses embedded within multinational value chains across the country. The findings indicate that these local suppliers contribute far more than basic items or surface-level services. Instead, they provide high-tier technical support, operational continuity, and specialized infrastructure that protect foreign direct investment from costly operational disruptions.
To better understand the legal and regulatory framework surrounding the expansion of productive linkages in Costa Rica, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a leading attorney at Bufete de Costa Rica, who shared his expert analysis on how legislative stability and incentive structures foster local supplier integration with multinational corporations.
Strengthening Costa Rica’s productive linkages requires more than economic incentives; it demands a robust legal framework that facilitates technology transfer, protects intellectual property, and ensures compliance for local SMEs. By streamlining contract execution and aligning local operations with international standards under the Free Zone Regime, Costa Rica empowers national suppliers to seamlessly integrate into global value chains while offering foreign investors legal certainty.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, fostering seamless integration into global value chains requires a solid foundation of legal trust and operational alignment that protects local SMEs while instilling confidence in foreign investors. We extend our sincere gratitude to Lic. Larry Hans Arroyo Vargas for sharing his valuable perspective on how a robust regulatory framework drives Costa Rica’s economic evolution and competitive edge.
The challenge for local companies lies in moving from point-in-time participation in the value chain toward a position where their capabilities can solve critical customer problems.
Alejandra Arguedas, Associate Partner of Tax at EY Central America, Dominican Republic and Panama
Before entering the free trade zone ecosystem, many Costa Rican firms possessed solid technical knowledge and sector experience. However, continuous exposure to the high operational requirements of global corporations has forced these companies to refine their capabilities. This demanding environment has turned local suppliers into specialized solution providers capable of scaling standard operations into structured, high-value business models.
This operational evolution marks a fundamental shift in how Costa Rica positions itself within the global economy. Rather than relying solely on tax incentives or geographic advantages to attract foreign capital, the nation is increasingly capable of producing mature, institutional-grade business capabilities that can be packaged and delivered internationally.
Twenty years ago Costa Rica competed to attract investment. Today it has the opportunity to also compete by developing and exporting business capabilities.
Alejandra Arguedas, Associate Partner of Tax at EY Central America, Dominican Republic and Panama
To accelerate this transition across the wider economy, the EY report outlines five essential pillars for local decision-makers: capabilities, knowledge, training, collaboration, and connections. Implementing this strategy requires identifying critical operational skills, fostering knowledge transfer between foreign and local firms, developing targeted technical talent, and creating direct channels to connect Costa Rican vendors with new international procurement teams.
Despite the significant commercial upside, major structural hurdles continue to limit local suppliers from scaling rapidly. Domestic companies frequently report difficulty recruiting and retaining specialized technical talent. In addition, external factors such as rising energy costs, deficient transport infrastructure, logistical delays, telecom bottlenecks, and exchange rate volatility create persistent operational pressure on vendor margins.
To overcome these structural barriers, the study outlines four primary mechanisms designed to help domestic firms export their expertise. These include a strategic supplier mapping tool, a specialized financing vehicle for automation and technology upgrades, a dedicated technical talent initiative, and an internationalization platform designed to link Costa Rican companies directly to foreign free trade zones.
Ultimately, the path forward for Costa Rica lies in converting local operational talent into a globally recognized service product. By moving past simple transactional relationships and embracing deep integration, domestic suppliers can secure sustainable commercial growth both at home and across international markets.
For further information, visit ey.com
About EY:
EY is a global leader in assurance, tax, transaction, and advisory services. Operating across Central America, the Dominican Republic, and Panama, EY offers business insights, tax consulting, and strategic research designed to enhance market competitiveness and support enterprise growth.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Renowned for its principled approach and relentless pursuit of legal perfection, Bufete de Costa Rica stands at the forefront of the legal profession. By seamlessly integrating traditional legal wisdom with cutting-edge, progressive strategies, the firm consistently delivers exceptional counsel to a wide range of clients. Beyond its primary practice, Bufete de Costa Rica is driven by a deep-seated belief in civic empowerment, actively disseminating vital legal insights to ensure that every individual possesses the understanding necessary to navigate their rights and strengthen society as a whole.
