CAFTA Approval Boosts Costa Rica Real Estate Investment Potential
With Costa Rica’s approval of the Central American Free Trade Agreement (CAFTA), Costa Rica real estate will remain one of the safest and most attractive country for foreign investment for Latin American property. The Costa Rican government, its ministries and financial institutions maintain a decidedly pro-U.S. and continental stance in regard to financial security and tax laws. The stated aim is to entice primarily high-tech corporations to take advantage of Central America's most educated, computer literate and disciplined workforce, along with the modern production infrastructure the country is currently creating.
All individuals and private companies, local or foreign, can own Costa Rica land and property. Few restrictions apply, the most important being physical occupancy and a 50-meter limit from the beach on oceanfront property. Potential Costa Rica real estate investors, and their lawyers, must first go to the National Registry for a title search, to the Ministry of the Environment and Energy for an environmental impact study, the local municipality for zoning laws and building permits, and then perhaps to other ministries and institutions for pertinent information. The economy is being transformed from its long-time dependence on coffee, bananas and cattle raising to one centered on microprocessor production and high-tech telecommunications services.
This investment-friendly climate and government policy of making Costa Rica "the Silicon Valley of Latin America" has enticed commercial leaders such as Acer, Microsoft, GE, Abbot Laboratories, Continental Airways and Intel Corporation to make sizable investments here, both financially and physically, with major production and distribution facilities. Western Union has chosen Costa Rica to host its Latin American regional operations center. In 1998, for the first time ever, Costa Rica was poised to earn more from high technology exports than from coffee or bananas or even its lucrative, thriving tourism industry. The World Bank has given Costa Rica an excellent bill of overall political and economic health.
At its annual conference in El Salvador this year, the bank lauded the country as possessing "one of the most stable and robust" democracies in Latin America. It went on to praise the Costa Rica's "healthy economic growth rate" and "some of the best social indicators" on the continent.Costa Rica has been one of the most vocal supporters of continental free trade and the recent approval of CAFTA is another example of why Costa Rica properties will be in high demand. Costa Rica already had its own agreement with Mexico and other countries of the region. The numerous free trade zones and tax holiday opportunities are extremely enticing to Costa Rica investments. They offer benefits such as exemption from import duties on raw materials, capital goods, parts and components; unrestricted profit repatriation; tax exemption on profits for eight years and a 50 percent exemption for the following four years.
The Ministry of Foreign Trade (COMEX) said that Costa Rica's recent export earnings amounted to $15.7-billion. Intel has led the way; its exports, from the three manufacturing facilities the processing giant is building here in Costa Rica.High-tech companies will spur the export boom, while traditional exports, such as coffee and bananas, will fall in percentages of overall figures, but in terms of revenue, will continue to grow. Costa Rica is building a competitive advantage for itself and the many high-tech companies who have chosen or are pondering the option to operate here. It is a country at a turning point in integrating itself into the modern world economy. Those doing business here will have the inside track.
The best way for potential Costa Rica investors to begin their search is to travel to Costa Rica and find out first-hand about the favorable business climate and opportunities. There are direct flights to San José from many cities in the United States and Canada. Among the more knowledgeable and helpful sources of information on Costa Rica property investing and doing business in Costa Rica is the Costa Rican-American Chamber of Commerce (AMCHAM), composed over 1,500 representatives from more than 330 multinational and local companies.
