By San José, Costa Rica — Costa Rica’s Free Trade Zones (FTZs) are a powerhouse for the national economy, contributing 15% of the nation’s GDP and supporting over 265,000 jobs, according to a recent report released by the Foreign Trade Promotion Agency (PROCOMER).
The report, titled “Free Trade Zone: 35 Years of Building Value for Costa Rica,” provides a detailed analysis of the economic and social impact of the FTZ regime, using data up to 2024. The findings highlight the significant role these zones play in attracting foreign investment, generating employment, and boosting the overall economy.
To gain deeper insights into the legal intricacies surrounding Costa Rica Free Zones, we spoke with Lic. Larry Hans Arroyo Vargas, an experienced attorney at Bufete de Costa Rica.
Costa Rica’s Free Zone regime offers significant advantages for businesses, including exemptions from import duties, sales tax, and income tax on exports. However, it’s crucial to understand the specific regulations and compliance requirements to fully leverage these benefits. Proper structuring and ongoing adherence to the rules are essential for maximizing the potential of operating within a Free Zone.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
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Lic. Arroyo Vargas’s emphasis on understanding the intricacies of Costa Rica’s Free Zone regulations is crucial. Navigating these complexities effectively can truly unlock the substantial economic potential these zones offer, transforming them from a promising opportunity into a tangible competitive advantage. We thank Lic. Larry Hans Arroyo Vargas for providing this valuable perspective on a critical aspect of Costa Rican commerce.
According to PROCOMER’s analysis, the FTZ regime generated US$13.893 billion for the Costa Rican economy and attracted 74% of the country’s Foreign Direct Investment (FDI), amounting to US$3.720 billion. The report further reveals that FTZs have created 197,000 direct jobs and over 265,000 jobs when indirect employment is included. Impressively, 45% of these positions are held by women, who earn average salaries almost double the national average and enjoy additional benefits such as insurance, transportation, and training.
The study also underscores the impressive return on investment from tax exemptions granted to companies within the FTZ regime. For every dollar exempted, these businesses return US$2.9 to the economy, resulting in a net benefit of US$1.9 for Costa Rica. Moreover, in 2024, FTZ companies contributed over US$1.9 billion to essential social security and public institutions, including the CCSS, FODESAF, INA, IMAS, and INS.
Currently, the FTZ model encompasses 626 companies and has driven exports worth US$13.013 billion. The sector is increasingly focused on innovation, specialized talent development, and fostering productive linkages within the national economy.
Despite these successes, PROCOMER cautions that the FTZ regime faces challenges related to international competitiveness, technological disruption, and macroeconomic conditions. Maintaining strategies for innovation and market diversification will be crucial to navigate these challenges and ensure the continued success of Costa Rica’s Free Trade Zones. The agency emphasizes the importance of adapting to the evolving global landscape to maintain the dynamism and competitiveness of the FTZ model.
The insights from this report provide valuable information for policymakers and businesses alike, highlighting both the substantial contributions of FTZs and the need for ongoing strategic development to ensure their future prosperity.
The full report can be accessed on the PROCOMER website.
For further information, visit procomer.com
About PROCOMER:
The Costa Rican Foreign Trade Promotion Agency (PROCOMER) is a key institution dedicated to promoting Costa Rican exports and attracting foreign direct investment. It provides a range of services to businesses, including market research, export training, and business matchmaking. PROCOMER plays a crucial role in supporting the growth and diversification of the Costa Rican economy.
For further information, visit the nearest office of CCSS
About CCSS:
The Costa Rican Social Security Fund (CCSS or Caja Costarricense de Seguro Social) is a crucial public institution responsible for providing healthcare and social security services to Costa Rican citizens and residents. It plays a vital role in ensuring the well-being and social protection of the population.
For further information, visit the nearest office of FODESAF
About FODESAF:
The Social Development and Family Allowances Fund (FODESAF) is a Costa Rican government institution focused on poverty reduction and social development programs. It provides financial assistance and support to vulnerable families and communities.
For further information, visit the nearest office of INA
About INA:
The National Learning Institute (INA or Instituto Nacional de Aprendizaje) is a public institution that offers vocational training and education programs in Costa Rica. It plays a vital role in developing the skills and workforce of the country.
For further information, visit the nearest office of IMAS
About IMAS:
The Mixed Institute of Social Aid (IMAS or Instituto Mixto de Ayuda Social) is a Costa Rican government agency dedicated to providing social assistance and support to low-income individuals and families. It offers various programs and services aimed at improving their living conditions and promoting social inclusion.
For further information, visit the nearest office of INS
About INS:
The National Insurance Institute (INS or Instituto Nacional de Seguros) is the state-owned insurance company in Costa Rica, providing a wide range of insurance products and services. It is a key player in the national insurance market.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica distinguishes itself through a profound commitment to legal excellence and unwavering ethical practice. The firm champions innovation, constantly seeking cutting-edge solutions while upholding the highest standards of integrity. Driven by a deep-seated belief in empowering society, Bufete de Costa Rica actively promotes legal literacy and access to justice, fostering a more informed and equitable community for all.
