Explore Why Costa Rica Is a Key Player in the Nearshoring Boom for 2025  

Nearshoring, or the relocation of production operations close to the end market, has become an essential strategy for supply chain resilience.  

Trade tensions, coupled with global logistics risks and the pandemic, have prompted companies to rethink their global supply chains. 

In this context, Costa Rica has emerged as key Nearshoring destinations, taking advantage of its proximity to North America, South America and European countries, as well as its  network of trade agreements. 

This strategy not only allows for a reduction in transportation times, but also provides companies with greater flexibility to adapt to unforeseen changes in demand.  

It also fosters collaboration with local suppliers, which can strengthen the regional economy, and create new opportunities for skills development and employment in Latin America.  

By 2025, Nearshoring is shaping up to be one of the strongest trends in sourcing, in particular in sectors such as high-tech manufacturing, Medical Devices, automotive, and fast-moving consumer products. 

Some countries in Latin America are leading in attracting Foreign Direct Investment (FDI) due to their favorable business conditions: 

Costa Rica 

Costa Rica has emerged as a popular destination for foreign investors looking for a base near the United States. 

Over 70 percent of the direct investment of the country comes from the United States; however, investors from other regions, like Europe, are also relocating to Costa Rica. 

A year ago, PROCOMER, the Foreign Trade & Investment Promotion Agency of Costa Rica, launched a new FDI strategy aiming to create more linkages, employment, and knowledge transfer across the country. 

The main strengths of this country as a destination for investments are its stable economy and democratic government, a highly educated workforce, and an impressive record of sourcing 98% of its electricity from renewable sources, such as hydropower, wind, geothermal, and solar energy over the past five years. 

Costa Rica is also attractive thanks to its strong focus on sustainability and highly skilled human talent, which allows companies to operate and grow.  

The country has a robust Free Zone Regime and world-class Free Zones that offer a stable legal framework and incentives for companies to relocate operations.  

A prime example is Coyol Free Zone, which provides companies with a comprehensive solution for investing, developing infrastructure and buildings, and facilitating exports. 

Brazil 

Brazil is benefiting from the relocation of Chinese automakers such as Great Wall Motors and BYD, as well as five others that have announced their arrival in this country, such as Jaecoo, Omoda and Exeed, as well as Wey and Tank (assembly subsidiaries of Great Wall Motors). 

There is also a growing interest among companies in the energy, agriculture, and information technology sectors to invest in the Brazilian economy.  

Additionally, this country has a population of 215 million and is the ninth largest economy in the world. Private parties are allowed to generate electricity for their industries, utilizing various resources, primarily natural ones. 

There is a clear strategy in which Lula Da Silva, President of Brazil, is attracting foreign capital through bilateral agreements and public incentives, traveling around the world to promote the opportunities that exist in his country. 

Mexico 

The arrival of a new government in Mexico gives hope for an economic reactivation in which foreign trade will play an important role. 

Mexico is closer to the United States than any other Latin American country, and benefits from the USMCA, an agreement to promote trade between the countries of North America. 

The country also enjoys other advantages for multinationals, such as low labor costs, fast and secure supply chains, and a well-performing domestic industry, especially in the automotive sector. 

In a study by Statista on Mexico’s import suppliers in 2019, it was found that over 45% of imports came from the U.S, while nearly 30% were sourced from China, Japan, Germany, and South Korea. 

It is still uncertain how Donald Trump’s return to power in the U.S. will affect the foreign investment policies between the two countries. During his first term in the White House, the president was known for promoting protectionist measures. 

Colombia 

Colombia is one of the emerging markets with the best prospects for Nearshoring or relocation of industrial and service operations in Latin America. In fact, its non-commodity exports are expected to grow by 11% in 2025 thanks to this commercial phenomenon. 

This country stands out for its constantly improving logistics infrastructure and attractive tax incentives in export processing zones, which increase its competitiveness when compared with countries in the region. 

A study titled “Nearshoring: Unlocking Latin America’s Potential,” conducted by JLL Research, highlights Bogota and Medellin as the leading areas for business relocation.  

These cities showcase a robust business ecosystem and attractive real estate infrastructure, making them appealing destinations for foreign investment. 

Panama 

Strengthened by the Panama Canal, this country offers unparalleled Nearshoring opportunities within the industrial sector. This pivotal waterway facilitates global trade, significantly reducing transportation times and costs for manufactured goods. Combined with Panama’s Special Economic Zones, this infrastructure presents a major competitive advantage. 

The economy of Panama also benefits from dollarization, ensuring fiscal stability and negating currency exchange risks for businesses.  

The country’s labor force may not be as well qualified as that of Chile or Costa Rica, but it is increasingly bilingual, highly skilled, and versatile, which further enhances its attractiveness. 

Chile 

A recent report by JLL Research highlights that Chile is an attractive country for Foreign Direct Investment in Latin America due to its economic stability, favorable regulatory framework, and the quality of its workforce. 

The study also underlines this country’s robust business environment and consolidated infrastructure, which facilitates investment and the operation of foreign companies. 

Chile is also well positioned as one of the countries with less corruption rates in Latin America, which makes it a safe and reliable destination for companies seeking to optimize their supply chains and reduce operating costs by being closer to the end market in the United States. 

However, JLL Research observes that the potential growth in Chilean exports due to Nearshoring during 2025 may not be as significant as that of other countries in the region. 

 

Sources: Newmark, Portafolio Colombia, JLL Research, PROCOMER, and Forbes