Ecuador vs. Costa Rica: Up-and-Coming or Tried and True?
Costa Rica has long been a favorite of expats and international travelers. With its beautiful beaches, friendly locals, and perfect weather it has claimed the top spot on lists of best tropical destinations for decades.
But what about newcomer Ecuador?
Rich in culture, and with a wide variety of climates and settings, Costa Rica’s South American neighbor is giving it a run for its money. Speaking of which, the cost of living in Ecuador is another perk that’s causing it to take top billing in many of those lists that Costa Rica once dominated.
Which is the better travel destination or expat haven?
Well, that depends solely on you and your priorities and expectations. To help you make a more educated decision, we’ve aligned the two countries in a side-by-side comparison so you can see how they stack up in several of the most important categories.
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Round #1 – Lifestyle Hacks
Slight Advantage: Ecuador
One of the most amazing benefits of living in Latin America is the opportunity to outsource a lot of your less desirable tasks. With a wealth of local labor resources that aren’t available in North America, you can hire helpers ranging from gardeners to tutors to drivers to grocery delivery guys.
You can even enlist the full-time services of a maid. (Think cooking, cleaning, grocery shopping, and laundry.) And, in Ecuador, that’ll only run you a mere $10 per day!
The cost in Costa Rica is a little higher, closer to $15 per day, but it can be argued that this is one area where you get what you pay for. With Costa Rica’s heavily customer-oriented service culture, the aid you’ll get there is top-notch.
However, the service in Ecuador is excellent as well so, in terms of value, we have to award this category to them.
Round #2 – Connectivity
Outcome: Ecuador Advances
For a country that excels so well in so many areas, Costa Rica is light years behind the rest in terms of internet speed and availability. Broadband is available in most of the larger cities, but it’s often difficult to find a signal elsewhere.
The country’s connection speed has increased by 43% in the past year. However, at 2.1 megabytes per second, it’s still barely enough to stream a movie in standard definition (and you can forget high def).
Ecuador, on the other hand, is aggressively working to increase its internet coverage. Currently, over 35% of the population is connected, with a goal of access in 50% of households by 2015. In Ecuador there are also free public access centers, called Infocentros, scattered all over the country, even in more remote areas.
Round #3 – Living Options
Winner: Costa Rica for its Tropical Lifestyle
Both Costa Rica and Ecuador, with their varied topography and diverse ecoclimates, offer a wide range of living and travel options. There are mountain towns, beach communities, and bustling cities.
In most of those categories, Ecuador is a worthy competitor. Cities like Cuenca and Loja offer colonial charm plus all the modern conveniences. The Galapagos Islands offer some of the world’s best biodiversity. Ecuador also has major cities, like Quito and Guayaquil, for those who want easy access to services and amenities (arguably better than boring, unattractive San Jose, Costa Rica).
Where Ecuador falls flat is with its tropical lifestyle. In short, beach towns. While it has a handful of established destinations, like Salinas and Montanita, those towns aren’t even in the same ballpark with what Costa Rica has to offer.
Tropical living and ecotourism are exactly what Costa Rica does so well. As a result, it can be a bit overrun with tourists at times and in certain locations. However, with so many options, there are still a number of places off the beaten path where you can find a secluded beach or a remote surfing spot. Costa Rica is the epitome of most expats’ ideal tropical lifestyle.
Round #4 – Green Living
Slight Edge: Costa Rica
In keeping with its commitment to the natural environment and its push towards ecotourism, Costa Rica is about as green as they come. Almost ¼ of the country’s total area is parkland. Over 90% of its electricity comes from renewable energy sources, with 95% projected by year end. It’s also well on its way to becoming the world’s first carbon-free economy.
It also feels greener in Costa Rica, with many businesses and communities promoting green initiatives and healthy living. However, Ecuador is certainly taking strides in this direction as well.
It’s the only country in the world where the rights of the natural environment are protected in the nation’s constitution. Ecuador is also home to Yasuni National Park, the most biodiverse place on earth. Although the region is constantly being threatened due to its 800-million barrel oil reserve, the country has undergone tremendous measures to protect it.
Round #5 – Cost of Living
Clear Winner: Ecuador
Costa Rica is a top tropical destination for tourists and expats alike. However, it isn’t for its low costs. While still a fraction of what you’d pay for the same goods and services in North America, Costa Rica has one of the highest costs of living in Latin America.
By contrast, Ecuador’s reasonable cost of living is often one of its biggest selling points. There a couple could live simply on a mere $1200 per month. This total even includes rent, which runs around $450 on average.
And, by “simply,” we don’t mean completely free of luxuries like once-per-week maid service and high speed internet. While Ecuador’s cost of living is low, the lifestyle it affords is far from meager.
Round #6 – Ease of Access
Advantage: Costa Rica
Because of its long-standing status as a top Latin American destination, Costa Rica is serviced by a whopping 13 large airlines. It’s only 2 ½ hours from Miami and air travel from North America is often quite reasonable.
So not only is Costa Rica easy to access, it’s also a great starting point for travel in and around Central America. The only downside is that it has relatively few airports.
Ecuador has two international, Quito and Guayaquil, as well as a number of regional airports. However, most incoming flights have layovers in Miami, Panama City, Bogota, or the Caribbean, resulting in longer (and more expensive) travel.
Once you arrive in either country, public transportation is available to get you to points throughout the country. However, some trips in Ecuador can grow quite long. And Costa Rica isn’t exactly known for the quality of its roads.
Round #7 – Business Climate
Champion – Costa Rica
We’ll go with some cold hard facts on this one. The International Finance Corporation ranks Costa Rica #102 for ease of doing business. Ecuador comes in at #135. In other words, neither has the ideal business climate, but Costa Rica’s is significantly better.
While far from perfect, Costa Rica’s business environment is one of the most stable in Latin America, with numerous incentives like low tariffs and competitive tax rates. Recent legislation has been aimed at attracting foreign investment and supporting the private sector. Processes like obtaining a visa or starting a business are relatively hassle-free, by developing country standards.
Ecuador’s business climate has been somewhat unpredictable in recent years. Its dollarized government is heavily based on petroleum, resulting in the need for the nation to look for ways to improve its trade balance. However, recent strides in economic policy have led to an estimated 5% growth.
Ecuador also offers a number of visa options. However, a number of stipulations (like losing your visa if you’re gone for more than 6 months) make maintaining residency a challenge at times.
Round #8 – Banking
Lesser Evil: Costa Rica
Due to FATCA and other U.S. tax evasion agreements, both Costa Rica and Ecuador have recently implemented stricter measures that create difficulties for foreigners attempting to bank there. You can no longer open an account with merely a passport, in either location. In fact, the requirements are very much the same for both countries.
Why Costa Rica? Mainly because of Ecuador’s inconsistent regulations and subpar accounting standards. The process of establishing an account can also take a good bit longer there.
One advantage Ecuador has is its use of the U.S. dollar as its official currency. Costa Rica’s colon, while it generally follows the dollar, is thinly traded and could present a problem in the event of a worldwide financial crisis.
Round #9 – Investment Opportunities
Costa Rica’s economy is one of the safest in Latin America, and its policies encourage foreign investment. However, though it excels in stability, it lags behind in opportunity.
Ecuador offers a wealth of real estate and business opportunities at a lower cost and, consequently, with a larger growth potential. The country is investing heavily in infrastructure, which generally results in increased property values. Infrastructure improvements are the #1 catalyst for real estate appreciation, as we discuss extensively in Pay Dirt, our latest ebook.
Tourism investments are also a great option in Ecuador. For its incredible number of natural attractions, Ecuador has a relatively weak tourist infrastructure. There’s a lot of potential for savvy entrepreneurs to profit in this arena as Ecuador continues to gain popularity among expats and international travelers.
Round #10 – Health Care
Slight Edge: Costa Rica
This was a close one. Both countries offer excellent health care with skilled medical professionals and modern facilities, particularly in the larger cities. Costs are often as low as ¼ of the price for the same service in North America. Health insurance is also widely available and extremely affordable.
English is widely spoken among doctors in both countries, and many physicians even trained in the U.S. Hospitals are clean and equipped with the latest technological innovations.
While the care provided is great in both countries, the quality of Costa Rica’s health care system is ranked 36th in the world, ahead of the U.S. at 37th. It’s also physically closer to the United States, which could come in handy in the event that medical evacuation or frequent medical travel were necessary.
Round #11 – Consumer Goods
Both Ecuador and Costa Rica have a few strikes against them when it comes to the availability and affordability of consumer products. Costa Rica taxes consumer goods heavily (its Value Added Tax is 14%), so as a result less of them are imported.
This can make it particularly hard to find the things you’re after. And if you do locate a hard-to-find item, you’re very likely to pay out the wazoo for it.
At 12%, Ecuador’s VAT is only slightly lower than that of Costa Rica. However taxes on imported goods have been steadily increasing. As a result, many Ecuadorians are actually going outside of the country to buy things like electronics.
Round #12 – Foreign Land Ownership
Our Pick: Ecuador
While both countries’ laws protect foreigners who own property, Ecuador’s are much more liberal. Property rights are guaranteed by the constitution, and they apply equally to foreigners and Ecuadorians alike.
What’s more, Ecuador places no restrictions whatsoever on foreigners who wish to purchase land. And there’s an abundance to choose from, often at rock bottom prices.
Compare this with Costa Rica who do not allow foreign residents to purchase land considered restricted or concession areas (which includes 95% of all beachfront property) until they’ve lived in the country for at least 5 years. However, many circumvent this limitation by buying property in the name of a Costa Rican corporation in which they have 49% ownership.
Due diligence is an absolute must before buying land in either country. We recommend the services of a qualified attorney, with experience in land transactions, who can thoroughly research the title and ownership rights.
Costa Rica vs. Ecuador – Who’s the Grand Champion?
Were you keeping score? We weren’t. That’s because it’s so difficult to say for certain exactly which destination is right for an individual.
Our best advice? Come see for yourself.
Is Costa Rica, with its tropical lifestyle and established expat communities, your idea of a dream destination? Or do you prefer to invest in up-and-coming Ecuador, where there’s excellent investment potential and so much left to discover?
There’s only one way to find out.
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