This business model was strengthened during the pandemic. In 2021, the country attracted 103 investment projects, which resulted in the creation of 22,461 new jobs.
Costa Rica has the potential to continue growing and positioning itself as an investment attraction destination with a value proposition based on people, planet and prosperity.
Costa Rica. According to Martín Ibarra, Honorary President of the Free Trade Zones Association of the Americas, nearshoring has become an opportunity for Costa Rica to continue to strengthen its position as an ideal destination for Foreign Direct Investment (FDI) with a potential to attract close to US$1.5 billion in investments on a short and medium-term basis.
“These investments will in turn lead to the creation of quality jobs, production chains, exports, transfer of technological know-how and economic dynamism.” Ibarra based his comments on Inter-American Development Bank (IDB) projections.
Regarding nearshoring, Carlos Wong, Managing Director of Coyol Free Zone, Costa Rica’s leading medical device export park, explained that the country offers the right environment as an excellent alternative for companies that are looking to relocate their operations. Annually, 52% of Costa Rica’s medical devices and precision equipment are exported from Coyol Free Zone.
Attracting Foreign Direct Investment
One of the key characteristics of Costa Rica that allows it to attract Foreign Direct Investment is its human talent, which allows it to stand out in a high value-added sector such as Life Sciences, with a focus on advanced medical device manufacturing.
“Geographical location, highly qualified human talent, an excellent business climate, a Free Trade Zone Regime that provides legal security, 14 Free Trade Agreements, including with the United States, China and Europe, and membership in the Organization for Economic Cooperation and Development (OECD) are some of the elements that position the country as an ideal candidate for attracting investment.”, explained Wong.
Nearshoring is a business model in which companies move their operations to a location closer to their headquarters. During 2021, Costa Rica managed to attract 103 investment projects, driven by the trend of being closer to headquarters and in safe locations.
Wong explained that, through multiple trade agreements, in particular the one with the United States, Costa Rica can also benefit from the “friendshoring” trend, which involves relocating operations to nearby countries with whom they share values and visions.
Read more about Costa Rica’s favorable conditions for Nearshoring
Martin Ibarra reiterated that currently, close to 70% of countries have democratic governments, giving way to a tendency to trade with countries that share the same principles and political regimes.
Ibarra further explained that Costa Rica, like many other Latin American countries, has a gigantic competitive advantage: clean energy. “The best argument is clean energy. In Latin America 60% of energy is clean, while in Asia it is 8.5% and in Europe it is 10%. This is an irrefutable argument, a new way of looking at business in the future.”
“Hydrogen is the fuel and raw material of the future, essential for the decontamination of the planet”, said Ibarra.