For over 25 years, the Costa Rica economy has been one of the major development success stories in Latin America. This steady economic expansion has directly benefited expats and investors looking to find a tropical escape with a strong potential for return on money invested.

In addition to the ongoing effort by the government to encourage foreign investment, Costa Rica continues to offer the benefits of a strong expat presence, a well-developed infrastructure, and a wide variety of residential options that has made it a magnet for retirees and developers from the U.S., Canada and Europe. The cost of living in Costa Rica still compares favorably with other countries in the region and, certainly, with its North American neighbors.

The Angelov

The Strength in the Costa Rica Economy Is Its Stability

Having a history of stability, both in the governmental and financial sectors for over 20 years is one of the primary reasons Costa Rica continues to attract direct foreign investment. Developers and investors looking for a secure destination, that promotes growth and welcomes business, have found both in this Central American location.

This level of financial security translates into greater potential for expats; both those looking for vacation properties and those looking for a place to retire. Even with the worldwide decline of 2008, property values have begun a resurgence, increasing the desirability of owning real estate in the country.

Janeboles

Why Costa Rica Stands Out

The economic expansion of the last two plus decades is no accident. By focusing on liberalizing trade agreements, supporting a strategy of export-led growth, and actively seeking foreign investments, the Costa Rica economy grew at an average of 5% per annum during the 1990s.

Even with the recent uncertainties of the global economy, Costa Rica’s growth is anticipated to be between 4.1% and 4.3% for the next few years. This rate outpaces the growth rate of economies of other nations in the region.

Eco-Tourism and Biodiversity Are Also Major Contributors

Costa Rica’s commitment to the environment has long been a drawing card for many expats looking for a healthier, purer lifestyle. With many areas dedicated to maintaining the unique biodiversity found throughout the country, tourism continues to be a major source of revenue and foreign exchange.

In a recent article, CNN listed Playas de Nosara, in the Nicoya Peninsula as one of the eleven places to go in 2014. Recently awarded the Blue Flag by the non-government, non-profit organization, the Foundation for Environmental Education, for its quality and commitment to the environment, Nosara is a prime example of Costa Rica’s dedication to maintaining its eco-friendly reputation.

More Travel Options Translate Into More Economic Growth

Costa Rica is one of the most accessible countries in Latin America. With two international airports, Juan Santamaria Airport in Alajuela (just outside San Jose) and Daniel Oduber Airport in Liberia, travel to and from the U.S., Canada and European destinations is an easy proposition.  As more airlines add schedules to Costa Rica (Southwest is beginning to add service from Baltimore to San Jose in March 2015), the number of tourist and business travelers will also increase.

The improved road system and infrastructural support has also opened the Central and Southern Pacific zones to both commercial and tourist interests. With more money being spent in those areas, demand for residential options will also increase and will be reflected in rising property values.

Costa Rica Beauty

Owning Property Is a Secure Proposition

One of the biggest areas of foreign investment in Costa Rica is the purchase of property by expats. Foreigners have the same rights (and obligations) as Costa Rican citizens. The existence of a Central Land Registry also adds an element of security that your title is clear; something that is often much harder to discover in other Latin American countries.

Property taxes are one of the major pluses of land ownership in Costa Rica. The tax rate is 0.25% of the registered property value as determined by the local governments or municipalities. Since Costa Rica’s economy is not as dependent on tax remittances as many other Central and South American countries, it is reasonable to expect that this rate will stay low for quite some time.

Hollywood Smile310

What the Future May Hold for the Costa Rica Economy

There are a number of potential areas for growth that make the outlook for Costa Rica’s economic future a bright one. With the approval of CAFTA (US-Central America Free Trade Agreement) in 2009, Costa Rica has seen a significant increase in direct investments by foreign companies in such areas as telecommunications and the insurance industry.

A major impact of these increased investments, is a wider variety of companies providing internet, cable, and cell phone services throughout a larger portion of the country. This is a major draw for expats who want to stay “connected” even while they are enjoying their retirement paradise.

Major financial projects are also underway on a variety of fronts. Perhaps the most exciting is a project, supported by the World Bank, to revitalize, restore, and enhance the port city of Limon.

The project is focused on improving the infrastructure, developing and helping to sustain Limon’s cultural history and heritage, as well as enhancing employment opportunities.  The long-term impact could lead to more development on Costa Rica’s Caribbean coast and provide new potential for economic growth.

While eco-tourism and agricultural exports continued to be two of the main economic engines in Costa Rica, other areas are starting to make an impact. Medical tourism has been a steadily increasing growth industry in recent years.

The combination of state-of-the-art facilities, U.S.-trained and board certified specialists, and much lower prices than can be found in the U.S., have all contributed to the expansion of, what was once, just a “niche” sector to a significant financial contributor.

Patrick Turek

The Possibilities Are There

Having stability, both economic and political, combined with a strong trend of financial growth are important factors for any investor. For retirees whose budget may not be as flexible, knowing that money spent on your tropical getaway is a good investment with a potential for increase valuation can make those “golden years” truly golden.

Looking realistically at your situation, level setting both your near and long-term goals, and doing your research is the best way to explore those possibilities that Costa Rica holds. Above all, visit this special country and see if it calls to you; if your heart hears that song, you’ve already taken that first big step.