Costa Rica Business

Starting a Business in Costa Rica

Of a total 115 countries, Costa Rica came in first in Latin America and ninth in the world with respect to nations offering greatest commercial freedom and protection for private business, according to “Freedom and Development,” a Chilean research institute.

As a foreigner, you can invest in Costa Rica and even start your own business with only some restrictions. If you plan to go into business here it is very important to be aware of the local consumer market in order to succeed. Most of the country’s purchasing power is located in the Central Valley. A total of 75% of the country’s population reside in the central provinces of San José, Alajuela, Heredia and Cartago. Around 60% of the population is less than 30 years old. Intelligent business people will try to meet the needs of this group. You may also think about targeting tourists and upper-class Costa Ricans. There is a wealth of opportunites available in tourist-related businesses. Upper-class ticos have a large disposable income and the greatest purchasing power. They don’t mind spending a little more on good quality products. Just look at their expensive designer clothing like Tommy Hilfiger, their expensive imported automobiles and many palatial homes.

The majority of the country’s middle-class consumer’s values are now more akin to their U.S. counterparts. You can see this starting to take hold with a number of shopping malls being built around the Central Valley and the popularity of stores like Radio Shack and megawarehouses, like PriceSmart and Hipermás. Middle and upper lower class Costa Ricans seem to want all of the goodies so much that sales of cellular telephones have temporarily exceeded the availability of available phone lines.

One group to target is the lucrative foreign residents market. There are around 50,000 full-time foreigners living in Costa Rica. All you have to do is look for a product to fill their needs. Most yearn for some hard -to-find-products from home and would rather buy them in Costa Rica than go to the U.S. to shop.

Costa Rica is ripe for innovative foreigners willing to take a risk and start businesses that have not previously existed. Start-up costs for small businesses are less than in the U.S. or Canada. Many of the same types of businesses which have been successful in the U.S. and Canada will work if researched correctly. There is definitely a need for these types of businesses. You just have to do your homework and explore the market. Be aware that not everything that works in the U.S. will work here. Also you may have to adapt your idea because of the vagaries of the local market and different purchasing power. Don’t get any grandiose ideas since the country has only around 4 million people. You cannot expect to market products on a large scale as in the States.

Costa Rica’s local artisans make scores of beautiful handcrafted products such as furniture, pottery and cloth. With so many choices a smart person can find something to sell back home.

These are some of the potential business opportunities worth exploring: building and selling of small homes for middle class Costa Ricans or foreigners; an import-export business; desktop publishing; computer services and support; U.S. franchises; importing new foods; specialty bookstores; restaurants and bars; an auto body and paint shop; consulting; or specialty shops catering to North Americans and upper-class Costa Ricans.

Costa Ricans love anything novel from America. There are many stores selling both new and used trendy U.S.-style clothing. Costa Rican teenagers dress like their counterparts in the States and even watch MTV. U.S. fast food restaurants like Taco Bell, Burger King, Pizza Hut and McDonald’s are extremely popular. Real estate speculation can be lucrative if you have the know-how and capital.