Recently, the Costa Rican government has introduced a controversial tax proposal which would impose a 15% tax on the revenue generated from all companies that operate in Costa Rica under the Free Trade Zone Law starting in 2015. Needless to say that many of the companies that invested in Costa Rica based upon the tax exemption are upset with the new tax proposal. Many argue that this new tax will reduce the attractiveness of operating in Costa Rica in the future.
If you track the foreign investment inflows into Costa Rica you see a steady increase over the past 25 years and then a sharp decline in 2008 which coincides with the US financial crisis.
The curve is starting to head up again in 2010 so it seems risky to alter a strategy which has been working well for many years by imposing a tax on companies that are vital for job creation in Costa Rica.
I hope the government gets this one right since the stakes are pretty high.
According to the World Bank Doing Business report for 2012 Costa Rica ranks below the Latin American and Caribbean index for Ease of Doing Business.
The most common complaints are excessive bureaucracy and lack of infrastructure. Other rankings. Obtaining construction permits 141/183. Getting credit 98/183. Protecting investors 166/183. Enforcing contract 129/183.