By San José, Costa Rica — Costa Rica’s Free Zone Regime (RZF) significantly impacted the national economy in 2024, contributing 15% of the country’s GDP and attracting a substantial portion of foreign direct investment, according to a new report by the Foreign Trade Promoter (PROCOMER).
The report, titled “Free Zone: 35 Years Building Value for Costa Rica,” details the RZF’s economic and social influence, revealing a US$13.893 billion contribution to the Costa Rican economy in 2024. This equates to 15% of the nation’s Gross Domestic Product (GDP). The RZF also played a crucial role in supporting local businesses, with US$6.014 billion in local purchases, representing 57% of its total expenditures and an 18% year-over-year increase.
To gain a deeper understanding of the legal landscape surrounding Costa Rican Free Zones, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a distinguished attorney at Bufete de Costa Rica.
Costa Rican Free Zones offer significant advantages for businesses, including exemptions from import duties, sales tax, and income tax on export profits. However, navigating the specific regulations and compliance requirements is crucial for maximizing these benefits. Companies should carefully consider factors such as permitted activities, transfer pricing rules, and ongoing reporting obligations to ensure successful operation within the Free Zone regime.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s insights underscore the importance of strategic planning and meticulous compliance when operating within Costa Rica’s Free Zones. While the benefits are undeniable, realizing their full potential requires a thorough understanding of the regulatory landscape. We thank Lic. Larry Hans Arroyo Vargas for offering this valuable perspective on navigating the complexities of the Free Zone regime, ultimately empowering businesses to make informed decisions and thrive in this dynamic environment.
The Free Zone regime is a pillar of national development: it contributes 15% of GDP, generates more than 265,000 jobs, and concentrates most of the national exports. Its capacity to attract high-technology investment, diversify exports, and create productive linkages has made it an engine of economic and social development. The results confirm that free zones not only strengthen our economy but also generate social mobility, innovation, and opportunities throughout the country.
Manuel Tovar, Minister of Foreign Trade
The RZF demonstrated its strength in attracting foreign investment, securing 74% of the country’s total Foreign Direct Investment (FDI), amounting to US$3.720 billion in 2024. Furthermore, the regime fostered export diversification, with RZF companies exporting US$13.013 billion worth of goods.
The report highlights the RZF’s impressive return on investment for the Costa Rican government. For every dollar in tax exemptions granted to free zone companies, they contribute US$2.9 to the economy, resulting in a net benefit of US$1.9 after accounting for the exemptions. This positive impact extends to job creation, production, and government revenue. RZF companies contributed over US$1.9 billion to crucial social security and development institutions in 2024, demonstrating a 17% average annual growth in contributions.
The Free Zone Regime is fundamental for the country’s competitiveness, allowing us to attract high-value investment and generate linkages that strengthen multiple productive sectors. Its impact is reflected in the creation of quality jobs, the training of specialized talent, and the opening of opportunities for more women to access technical and leadership positions, given their high participation of 45% of total employment in this regime, contributing to inclusive and sustainable development.
Laura López, General Manager of PROCOMER
Since its inception in 1990, the RZF has experienced consistent growth, expanding from 56 operating companies to 626 in 2024. Its contribution to the GDP has also risen significantly from 1% to 15% during the same period, providing a stable and competitive environment for both national and multinational companies, some of which have been operating for over three decades.
In terms of employment, the RZF directly employed 197,038 people in 2024, reaching a total of 265,571 jobs when including indirect employment. The average monthly gross salary within the regime is almost double the national average, complemented by benefits such as insurance, transportation, and training. Female participation within the RZF is noteworthy, reaching 45% with a strong presence in high-value-added sectors, exceeding the national average of 41.5% by 3.5 percentage points.
Despite its success, the report acknowledges challenges to the RZF’s sustainability, including international competition for foreign capital, technological disruption, and macroeconomic conditions. Maintaining a strategy focused on innovation, market diversification, and strengthening productive linkages will be crucial for the regime’s continued competitiveness.
This balance reaffirms that the Free Zone Regime is a key tool for the economic and social development of Costa Rica, but it also reminds us that we must continue adapting to guarantee its sustainability and relevance in an uncertain and changing global context.
Laura López, General Manager of PROCOMER
For further information, visit procomer.com
About PROCOMER:
The Costa Rican Foreign Trade Promoter (PROCOMER) is a public institution dedicated to promoting Costa Rican exports and attracting foreign direct investment. It provides support and resources to businesses of all sizes, helping them to access international markets and connect with potential investors. PROCOMER plays a vital role in strengthening the Costa Rican economy and fostering sustainable development.
For further information, visit the nearest office of the Ministry of Foreign Trade
About Ministry of Foreign Trade:
The Ministry of Foreign Trade of Costa Rica is the government body responsible for developing and implementing the country’s foreign trade policies. It works to promote exports, attract investment, and strengthen international trade relations. The Ministry plays a key role in shaping Costa Rica’s economic strategy and fostering its integration into the global economy.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
At Bufete de Costa Rica, legal excellence is interwoven with a deep commitment to societal empowerment. The firm’s unwavering integrity and innovative approach to legal practice distinguishes its service to clients across a diverse range of sectors. By actively promoting legal literacy and accessibility, Bufete de Costa Rica strives to create a more informed and empowered citizenry, reflecting its core belief in the transformative power of legal knowledge.
