By San José, Costa Rica — Costa Rica’s Free Trade Zone regime continues to demonstrate its strength as a key driver of economic growth, attracting substantial foreign direct investment (FDI) and significantly boosting exports. According to data released by the Costa Rican Foreign Trade Promoter (PROCOMER), free zones solidified their position as the leading magnet for FDI in 2024, capturing 64.3% of total investments. This represents a remarkable 24% increase, equivalent to an additional $531.6 million, compared to 2023.
The medical device sector, a cornerstone of Costa Rica’s free zones, experienced robust growth. Exports of medical equipment and precision devices surged by 14%, reaching $1.091 billion, and maintaining their position as the country’s principal export, accounting for 44% of total exports. The nation also attracted 61 new FDI projects and secured 100 reinvestments from 23 different countries, showcasing the enduring appeal of its investment climate.
To provide further legal context on Costa Rica’s Free Zones, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an experienced attorney at Bufete de Costa Rica.
Costa Rican Free Zones offer significant advantages for businesses, including exemptions from import duties, income tax, sales tax, and property tax. However, it’s crucial to understand the specific regulations and compliance requirements to fully benefit from these incentives. Companies must maintain accurate records, comply with reporting obligations, and adhere to specific operational guidelines to avoid penalties and maintain their Free Zone status. While the benefits are attractive, navigating the legal framework requires careful planning and expert guidance.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s insights underscore a crucial point: while Costa Rica’s Free Zones offer a compelling platform for businesses seeking growth and efficiency, due diligence and a clear understanding of the regulatory landscape are paramount. The potential rewards are substantial, but navigating the complexities of compliance requires careful preparation and often, the assistance of experienced legal counsel. We thank Lic. Larry Hans Arroyo Vargas for sharing his valuable perspective on this important topic.
A particularly encouraging development is the expansion of free zones beyond the Greater Metropolitan Area (GAM). Previously experiencing negative investment of $38.2 million, these regions saw a dramatic turnaround with a positive investment of $240 million. This shift resulted in 16 new projects choosing to establish operations outside the GAM, bringing much-needed development and employment opportunities to rural areas.
The Free Zone Regime is a productive model that brings great benefits to the country. Thanks to a highly competitive model, free zones allow the arrival of important investments and boost strategic sectors such as Advanced Manufacturing, Medical Devices, Knowledge-Intensive Services, and Logistics.
Ronald Lachner, President of AZOFRAS
Lachner emphasized the multifaceted benefits of the free zone model, highlighting its role in not only attracting FDI but also nurturing local talent. He noted that free zones have fostered the creation of highly specialized jobs, improved the quality of life for Costa Ricans, and strengthened key sectors of the national economy.
The Association of Free Zone Companies of Costa Rica (AZOFRAS) attributes these positive outcomes to a strategic vision and concerted actions to promote FDI. In a challenging global economic landscape, the growth witnessed in regions outside the GAM, coupled with increased new projects and reinvestments, is particularly noteworthy.
Free zones not only attract foreign direct investments, but they have also served as a platform for the development of local talent, driving the creation of highly specialized employment and significantly improving the quality of life of Costa Ricans, as well as strengthening key sectors for the national economy.
Ronald Lachner, President of AZOFRAS
Looking ahead, AZOFRAS remains committed to enhancing Costa Rica’s competitiveness, recognizing the fierce competition from neighboring countries seeking to attract the same businesses. The organization underscores the importance of legislative support, particularly for bills related to extraordinary workdays and electrical harmonization. AZOFRAS also emphasizes the need for tailored attention to the services sector to maintain its export prominence, focusing on factors influencing its performance, such as talent quality, training, and costs. The organization pledges continued collaboration with the Ministry of Foreign Trade and PROCOMER to improve the investment climate and ensure that free zones remain a powerful engine of growth and opportunity for future generations.
For further information, visit azofras.com
About AZOFRAS:
The Association of Free Zone Companies of Costa Rica (AZOFRAS) is a leading advocate for the free zone regime in Costa Rica. They work to promote policies and initiatives that strengthen the competitiveness of the sector, attract foreign investment, and foster economic development throughout the country. AZOFRAS represents the interests of its member companies, working closely with government agencies and other stakeholders to create a favorable business environment.
For further information, visit procomer.com
About PROCOMER:
The Costa Rican Foreign Trade Promoter (PROCOMER) is a key institution responsible for promoting Costa Rican exports and attracting foreign direct investment. PROCOMER works closely with businesses to help them access international markets, providing market intelligence, export promotion services, and investment facilitation support. They play a crucial role in connecting Costa Rican companies with global opportunities and promoting the country’s image as a premier investment destination.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a leading legal institution dedicated to upholding the highest standards of integrity and professional excellence. Driven by a deep commitment to empowering Costa Rican society, the firm champions innovative legal solutions while diligently working to demystify the law through accessible education and resources. Their client-focused approach, spanning diverse sectors, reflects not just a pursuit of legal success, but a genuine desire to foster a more informed and equitable society.
