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Costa Rica: Quality without borders

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Title: Costa Rica: Quality without borders


1
Costa Rica Quality without borders
April 2008
2
Contents
  1. General Information
  2. Laws Incentives
  3. Performing Sectors
  4. Public Infrastructure Projects

3
  1. General Information

4
Strategic Location
  • Middle of the Americas
  • 5 hrs flying to NYC
  • Preferential access to US via CBI
    CAFTA
  • Multiple FTAs

5
Human Resources
  • 2007 Population
  • 4.4 million
  • 34.2 of population between 15 and 35
  • Universal and Common Education and Social
    Security System
  • Foundation of social stability
  • 6.5 of GDP invested in education
  • 2007 HDI Position 48 (5th in LATAM)
  • Global Competitiveness Index 2007 63 (6th place
    in LATAM)

Age Structure by Gender
6
Infrastructure
  • Free Trade Industrial-Business Parks
  • 8 in metro area 3 in construction
  • Expanding to rural areas
  • All privately owned
  • Electricity Telecom
  • 95 from renewable sources
  • National Grid coverage 97
  • Redundant fiber optic cabling
  • Internet access via Maya y Arcos cables (Global
    Crossing in 2008)

7
Infrastructure
  • Logistics
  • Ports on Caribbean and Pacific
  • 24 shipping lines
  • San Jose Intl. (SJO) 9 Mi from downtown
  • 3rd best airport worldwide (gt5MM Pax/Año)
  • Second Intl airport at Liberia (LIB)
  • Competitive marine freight to Asia, US and
    Europe

8
Economy
Variable 2003 2004 2005 2006 2007
GDP (Millions US) 17,487 18,495 20,017 22,197 25,750
GDP Real Growth 6.5 4.2 5.9 7.9 6.3
GDP per capita (US) 4,242 4,445 4,749 5,229 5,776
Source Banco Central de Costa Rica
2008 GDP Growth Rate gt5
9
GDP 2007
Source Banco Central de Costa Rica
10
Inflation and Devaluation
Source BCCR Year 2007 Final
11
Foreign Trade Policy
  • Strengthening of the export sector
  • Increasing integration with global economy
  • Penetrating new markets
  • Membership in intl. organizations and forums
  • Attracting Foreign Direct Investment
  • Free Trade Agreements

12
Free Trade Agreements
  • FTA with Mexico, Dominican Republic, Canada,
    Chile, CARICOM Panama
  • CAFTA ? Ratified October 2007
  • Beneficiary to the Caribbean Basin Initiative and
    the Generalized System of Preferences PLUS
    (European Union)

13
Tomorrow
  • Negotiating an Association Agreement with the
    European Union (FTA Plus)
  • Membership in APEC
  • FTA with Peoples Republic of China

14
Exports in US
2010 Goal 18 Billion US
14,0 Annual Variation 2006 / 2007
Source PROCOMER
15
Export Products
Cantidad de productos exportados 1986 - 2006
Source PROCOMER
16
Exports
Source PROCOMER
17
Main Export Products - 2007
18
FDI Exports
Source PROCOMER y BCCR
19
FDI in Costa Rica
Source BCCR (2007 Estimate)
20
FDI per capita 2006
Source CEPAL
21
FDI in Costa Rica by Sector
Source BCCR
22
FDI in Costa Rica by Source
Source BCCR
23
II. Investment Incentives
24
Foreign Investment in CR
  • Foreign investors as well as local ones enjoy the
    same level of protection in relation to their
    investments

25
Legal Guarantee
  • Foreigners have no limitation on landholding and
    can conduct business freely.
  • Foreigners have guaranteed equal treatment in
    terms of constitutional rights and duties
  • Free movement of capital
  • Intellectual Property Rights in line with WTO
    regulations

26
Laws providing incentives
  • Law 7210 of the Free Trade Zone regime
  • Inward Processing (Law 7557)
  • Law 6990 for Incentives to the Tourism Industry
  • Law 7575 of the Forestry Regime
  • Law 7169 to Promote Scientific Development
  • Law 8542 for the Promotion of Organic Agriculture

27
Free Trade Zone Regime
  • Eligible companies
  • Export processing industries
  • Trading companies
  • Service companies
  • Scientific research organizations
  • Vessel construction, repair and maintenance
    industries
  • Management firms that administer industrial parks

28
Free Trade Zone Regime
  • 100 exemption on
  • Import duties, tariffs and taxes on all supplies,
    raw materials, equipment and components.
  • Export taxes, local sales tax, excise taxes, etc
  • Profits and repatriation taxes.
  • WTO incentives dependent on the exporters
    performance must finish in 2015 for
    manufacturing but not services.

29
Free Trade Zone Regime
  • Minimum Investment
  • US 150,000 inside free trade industrial parks
  • US 2,000,000 outside free trade industrial
    parks
  • With possibility of local sales 25 for
    manufacturing industry and 50 for the services
    industry

Applies for manufacturing companies only
30
Inward Processing Regime
  • Duty Suspension terms
  • Raw materials, components, packaging material
    1 year (cant be renewed)
  • Machinery and equipment 5 years, (automatically
    renewed for equal terms).
  • No minimum investment requirement
  • Sales 100 re-export or mixed (re-export
    local)
  • Proportional payment of sales taxes and duties
    for local sales

31
In Good Company
32
III. Performing Sectors
33
Main Investment Sectors
  • Tourism
  • Agribusiness
  • High Technology
  • Business Services Call Centers
  • Software Development
  • Medical Devices
  • Infrastructure

34
Real Estate Boom
  • North and Central Pacific Areas are growing very
    fast, attracting people from USA, Canada and
    Europe
  • Private residencies and beach condominiums,
    shopping centers, major luxury resorts
  • Construction boom
  • US1.05 billion of FDI in 2007 (Tourism and
    non-industrial real estate)

35
(No Transcript)
36
Agribusiness
  • Forestry furniture, components, etc..
  • Organic farming mini vegetables, fruits
  • Aquaculture Tilapia, Tuna

37
Multisector
  • Software Development
  • Back Office
  • Applied RD
  • Design and Engineering
  • Electronic component assemly and testing
  • Medical devices
  • Biotechnology
  • Bioprospection

38
IV. Infrastructure Projects
39
Infrastructure
  • San José Metro Light Rail
  • Highway improvement San José Cartago
  • Port of Limón expansion
  • Liberia Airport (LIB) new terminal
  • Private Initiative Public Works Concession

40
A Country with Excellent Potential!
  • Central American Countries of the Future
  • FDI Magazine, 2007/2008
  • 2nd Most Competitive Country in Latin America
  • World Economic Forum, 2006/2007
  • 5th Worldwide Technology Exporter
  • 2005 UN Human Development Report
  • 35th Place in the Development Trade Index
  • UNCTAD, 2005

41
"...Costa Rica continues to be a strategic site
for us and now our best products are manufactured
here. I believe this speaks for itself... Paul
Otellini, President and CEO, Intel Corporation
42
  • Categories
  • Business friendly
  • Quality of Life
  • Human Resources
  • Economic Potential
  • Best Investment Development Strategy

Source FDI Magazine Financial Times
43
Thank You !
44
Contact
  • Emmanuel Hess
  • Executive Director
  • Tel (506) 299-4703
  • ehess_at_procomer.com
  • Edgar Sánchez
  • Domestic Foreign Investment
  • Tel (506) 299-4715
  • esanchez_at_procomer.com

45
Resourceful Websites
  • Procomer (www.procomer.com)
  • Ministry of Foreign Trade (www.comex.go.cr)
  • National Concessions Council (www.mopt.go.cr/cnc
    )
  • Investors Manual (www.tramites.go.cr/manual )
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