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Boosting Foreign Investment: Costa Rica’s Strategic Triumph

by rpetersen

In a striking demonstration of economic resilience and strategic foresight, Costa Rica has set a new benchmark in attracting foreign direct investment (FDI), marking a year of unprecedented growth. With a reported FDI influx of $3.921 billion for the year 2023, the nation not only surpassed its annual target by an astonishing 131% but also recorded a 24% increase from the preceding year’s total of $3.163,9 million. This achievement underscores Costa Rica’s emergence as a magnet for international investors, driven by its robust value proposition and strategic initiatives.

Free Trade Zones

The breakdown of investment regimes reveals a predominant inclination towards the free trade zone, which accounted for 61% of the FDI, followed by the definitive regime at 19%, and a notable allocation towards real estate and tourism, each capturing 7% of the total investment. These figures are a testament to the diverse appeal of Costa Rica’s investment landscape.

Central to Costa Rica’s success is its value proposition as a nation. Laura López Salazar, the General Manager of the Costa Rican Foreign Trade Promoter (Procomer), highlighted the country’s democratic stability, skilled human capital, expansive trade platform, and commitment to innovation and sustainable development as key factors in attracting global investors. This achievement not only reflects Costa Rica’s strategic vision but also its commitment to becoming a leading destination for economic investment and growth.

The Turnaround

Remarkably, the definitive regime saw a significant turnaround from a negative investment of $103.5 million in 2022 to a positive inflow of $759.7 million in 2023, signaling a dynamic shift in the country’s economic landscape. By sector, manufacturing led with 55%, followed by services at 25%, and a balanced distribution among tourism, real estate, agriculture, finance, agro-industry, and trade.

The United States remains the principal source of FDI, contributing 71% of the total, showcasing the enduring economic ties and investor confidence between the two countries. Belgium, Switzerland, and Panama also emerged as notable contributors, highlighting Costa Rica’s appeal to a diverse international investor base.

In 2023, Procomer announced 59 new investment projects, marking a 64% increase from the previous year and underscoring a strategic focus on services, manufacturing, agro-industry, and trade. Significantly, 13 of these projects were established outside the Greater Metropolitan Area, indicating a geographical diversification of investment that promises to bring economic benefits to wider regions of Costa Rica.

A Strategy for future growth

Costa Rica’s strategic approach to enhancing its investment climate, from improving its value proposition to diversifying its economic base and fostering international relationships, has positioned it as a leading destination for FDI. The nation’s success story offers invaluable insights into the power of strategic vision, robust policy framework, and the pivotal role of trade promotion agencies in driving economic growth and development.

As Costa Rica continues to build on this momentum, it sets a precedent for other nations on the path to economic resilience and prosperity, proving that strategic planning, coupled with a commitment to sustainable and inclusive growth, can significantly attract global investment and stimulate economic development.

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